diff --git a/python/ray/serve/_private/http_state.py b/python/ray/serve/_private/http_state.py
index 2771786d07a3..9e63f232e81c 100644
--- a/python/ray/serve/_private/http_state.py
+++ b/python/ray/serve/_private/http_state.py
@@ -128,6 +128,7 @@ def _health_check(self):
                 self._health_check_obj_ref = None
                 try:
                     ray.get(finished[0])
+                    self.try_update_status(HTTPProxyStatus.HEALTHY)
                 except ray.exceptions.RayActorError:
                     # The proxy actor dies.
                     self.set_status(HTTPProxyStatus.UNHEALTHY)
diff --git a/python/ray/serve/tests/test_http_state.py b/python/ray/serve/tests/test_http_state.py
index 92e119e62469..57b00fef5ccf 100644
--- a/python/ray/serve/tests/test_http_state.py
+++ b/python/ray/serve/tests/test_http_state.py
@@ -13,7 +13,11 @@
 from ray.serve._private.common import HTTPProxyStatus
 from ray.serve._private.http_state import HTTPProxyStateManager, HTTPProxyState
 from ray.serve._private.http_proxy import HTTPProxyActor
-from ray.serve._private.constants import SERVE_CONTROLLER_NAME, SERVE_NAMESPACE
+from ray.serve._private.constants import (
+    SERVE_CONTROLLER_NAME,
+    SERVE_NAMESPACE,
+    PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD,
+)
 from ray.serve.controller import ServeController
 from ray.serve._private.utils import get_head_node_id
 from ray.serve._private.default_impl import (
@@ -521,6 +525,118 @@ async def check_health(self):
     assert proxy_state._consecutive_health_check_failures == 3
 
 
+@patch("ray.serve._private.http_state.PROXY_HEALTH_CHECK_PERIOD_S", 0.1)
+def test_http_proxy_state_update_healthy_check_health_sometimes_fails():
+    """Test that the proxy is UNHEALTHY after consecutive health-check failures.
+
+    The proxy state starts with STARTING. Then the proxy fails a few times
+    (less than the threshold needed to set it UNHEALTHY). Then it succeeds, so
+    it becomes HEALTHY. Then it fails a few times again but stays HEALTHY
+    because the failures weren't consecutive with the previous ones. And then
+    it finally fails enough times to become UNHEALTHY.
+    """
+
+    @ray.remote(num_cpus=0)
+    class NewMockHTTPProxyActor:
+        def __init__(self):
+            self._should_succeed = True
+            self.num_health_checks = 0
+
+        def get_num_health_checks(self) -> int:
+            return self.num_health_checks
+
+        def should_succeed(self, value: bool = True):
+            self._should_succeed = value
+
+        async def ready(self):
+            return json.dumps(["mock_worker_id", "mock_log_file_path"])
+
+        async def check_health(self):
+            self.num_health_checks += 1
+            if self._should_succeed:
+                return "Success!"
+            else:
+                raise RuntimeError("self._should_succeed is disabled!")
+
+    proxy_state = _create_http_proxy_state(proxy_actor_class=NewMockHTTPProxyActor)
+
+    # Wait for the proxy to become ready.
+    wait_for_condition(
+        condition_predictor=_update_and_check_proxy_status,
+        state=proxy_state,
+        status=HTTPProxyStatus.HEALTHY,
+    )
+
+    def _update_until_num_health_checks_received(
+        state: HTTPProxyState, num_health_checks: int
+    ):
+        state.update()
+        assert (
+            ray.get(state.actor_handle.get_num_health_checks.remote())
+        ) == num_health_checks
+        return True
+
+    def incur_health_checks(
+        pass_checks: bool, num_checks: int, expected_final_status: HTTPProxyStatus
+    ):
+        """Waits for num_checks health checks to occur.
+
+        Args:
+            pass_checks: whether the health checks should pass.
+            num_checks: number of checks to wait for.
+            expected_final_status: the final status that should be asserted.
+        """
+        ray.get(proxy_state.actor_handle.should_succeed.remote(pass_checks))
+
+        cur_num_health_checks = ray.get(
+            proxy_state.actor_handle.get_num_health_checks.remote()
+        )
+
+        wait_for_condition(
+            condition_predictor=_update_until_num_health_checks_received,
+            state=proxy_state,
+            num_health_checks=cur_num_health_checks + num_checks,
+        )
+        assert (
+            ray.get(proxy_state.actor_handle.get_num_health_checks.remote())
+            == cur_num_health_checks + num_checks
+        )
+
+        if expected_final_status:
+            assert proxy_state.status == expected_final_status
+
+    # Make sure that the proxy_state's status remains HEALTHY as long as
+    # PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD failures don't occur consecutively.
+    for _ in range(3):
+        incur_health_checks(
+            pass_checks=True,
+            num_checks=1,
+            expected_final_status=HTTPProxyStatus.HEALTHY,
+        )
+        incur_health_checks(
+            pass_checks=False,
+            num_checks=PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD - 1,
+            expected_final_status=HTTPProxyStatus.HEALTHY,
+        )
+
+    # Have health check succeed one more time.
+    incur_health_checks(
+        pass_checks=True, num_checks=1, expected_final_status=HTTPProxyStatus.HEALTHY
+    )
+
+    # Check failing the health check PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD + 1
+    # times makes the proxy UNHEALTHY again. We do the `+ 1` to ensure that
+    # at least PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD checks have run and been
+    # processed by the HTTPProxyState. Otherwise, incur_health_checks could
+    # return after the health check failed but before the HTTPProxyState had
+    # time to ray.get() it and update its state.
+    incur_health_checks(
+        pass_checks=False,
+        num_checks=PROXY_HEALTH_CHECK_UNHEALTHY_THRESHOLD + 1,
+        expected_final_status=HTTPProxyStatus.UNHEALTHY,
+    )
+
+
 @patch("ray.serve._private.http_state.PROXY_HEALTH_CHECK_TIMEOUT_S", 0.1)
 @patch("ray.serve._private.http_state.PROXY_HEALTH_CHECK_PERIOD_S", 0.1)
 def test_http_proxy_state_check_health_always_timeout_timeout_eq_period():