diff --git a/sky/cli.py b/sky/cli.py
index d8b9b23d74d..287a16b995e 100644
--- a/sky/cli.py
+++ b/sky/cli.py
@@ -77,6 +77,7 @@
 from sky.utils.cli_utils import status_utils
 
 if typing.TYPE_CHECKING:
+    from sky import serve as serve_lib
     from sky.backends import backend as backend_lib
 
 logger = sky_logging.init_logger(__name__)
@@ -4154,9 +4155,16 @@ def serve_status(all: bool, service_names: List[str]):
                f'Replicas{colorama.Style.RESET_ALL}')
     replica_infos = []
     for service_record in service_records:
+        handle: 'serve_lib.ServiceHandle' = service_record['handle']
         for replica_record in service_record['replica_info']:
-            replica_record['service_name'] = service_record['name']
-            replica_infos.append(replica_record)
+            # Only print FAILED replicas if:
+            # 1. --all is specified;
+            # 2. auto_restart is not enabled (in which FAILED replica count
+            #    as one replica).
+            if (all or not handle.auto_restart or replica_record['status'] !=
+                    status_lib.ReplicaStatus.FAILED):
+                replica_record['service_name'] = service_record['name']
+                replica_infos.append(replica_record)
     status_utils.show_replica_table(replica_infos, all)
 
     failed_controllers = [
diff --git a/sky/execution.py b/sky/execution.py
index c81d74e6373..3673e77964e 100644
--- a/sky/execution.py
+++ b/sky/execution.py
@@ -1024,7 +1024,8 @@ def serve_up(
         service_name=service_name,
         policy=task.service.policy_str(),
         requested_resources=requested_resources,
-        requested_controller_resources=controller_resources)
+        requested_controller_resources=controller_resources,
+        auto_restart=task.service.auto_restart)
     # Use filelock here to make sure only one process can write to database
     # at the same time. Then we generate available controller name again to
     # make sure even in race condition, we can still get the correct controller
diff --git a/sky/serve/serve_utils.py b/sky/serve/serve_utils.py
index 8f05b81c364..1058ffb7f34 100644
--- a/sky/serve/serve_utils.py
+++ b/sky/serve/serve_utils.py
@@ -299,6 +299,7 @@ class ServiceHandle(object):
     - (required) Service autoscaling policy description str.
     - (required) Service requested resources.
     - (required) Service requested controller resources.
+    - (required) Whether the service have auto restart enabled.
     - (optional) Service uptime.
     - (optional) Service endpoint IP.
     - (optional) Controller port.
@@ -317,6 +318,7 @@ def __init__(
         policy: str,
         requested_resources: 'sky.Resources',
         requested_controller_resources: 'sky.Resources',
+        auto_restart: bool,
         uptime: Optional[int] = None,
         endpoint_ip: Optional[str] = None,
         controller_port: Optional[int] = None,
@@ -331,6 +333,7 @@ def __init__(
         self.policy = policy
         self.requested_resources = requested_resources
         self.requested_controller_resources = requested_controller_resources
+        self.auto_restart = auto_restart
         self.controller_port = controller_port
         self.load_balancer_port = load_balancer_port
         self.job_id = job_id
@@ -345,6 +348,7 @@ def __repr__(self):
                 f'\n\trequested_resources={self.requested_resources},'
                 '\n\trequested_controller_resources='
                 f'{self.requested_controller_resources},'
+                f'\n\tauto_restart={self.auto_restart},'
                 f'\n\tcontroller_port={self.controller_port},'
                 f'\n\tload_balancer_port={self.load_balancer_port},'
                 f'\n\tjob_id={self.job_id},'
diff --git a/sky/utils/cli_utils/status_utils.py b/sky/utils/cli_utils/status_utils.py
index 8df9f28b5e3..5b78609850a 100644
--- a/sky/utils/cli_utils/status_utils.py
+++ b/sky/utils/cli_utils/status_utils.py
@@ -421,11 +421,15 @@ def _get_uptime(service_record: _ServiceRecord) -> str:
 
 
 def _get_replicas(service_record: _ServiceRecord) -> str:
-    ready_replica_num = 0
+    ready_replica_num, total_replica_num = 0, 0
+    auto_restart = _get_service_handle(service_record).auto_restart
     for info in service_record['replica_info']:
         if _get_status(info) == status_lib.ReplicaStatus.READY:
             ready_replica_num += 1
-    total_replica_num = len(service_record['replica_info'])
+        # If auto restart enabled, not count FAILED replicas here.
+        if (not auto_restart or
+                _get_status(info) != status_lib.ReplicaStatus.FAILED):
+            total_replica_num += 1
     return f'{ready_replica_num}/{total_replica_num}'