diff --git a/hermes_cli/main.py b/hermes_cli/main.py
index b98d30bf8d..062cf5bf19 100644
--- a/hermes_cli/main.py
+++ b/hermes_cli/main.py
@@ -7735,6 +7735,23 @@ def _cmd_update_impl(args, gateway_mode: bool):
                             # when the graceful path failed (unit missing
                             # SIGUSR1 wiring, drain exceeded the budget,
                             # restart-policy mismatch).
+                            #
+                            # Always `reset-failed` first.  If systemd's own
+                            # auto-restart attempts already parked the unit
+                            # in a failed state (transient CHDIR / OOM /
+                            # filesystem race after our drain + exit-75),
+                            # a plain `systemctl restart` can wedge against
+                            # the RestartSec backoff and leave the unit
+                            # dead.  Clearing the failed state first makes
+                            # the restart idempotent.  Mirrors the recovery
+                            # path in `hermes gateway restart`
+                            # (`systemd_restart()`) as of PR #20949.
+                            subprocess.run(
+                                scope_cmd + ["reset-failed", svc_name],
+                                capture_output=True,
+                                text=True,
+                                timeout=10,
+                            )
                             restart = subprocess.run(
                                 scope_cmd + ["restart", svc_name],
                                 capture_output=True,
@@ -7754,10 +7771,19 @@ def _cmd_update_impl(args, gateway_mode: bool):
                                 else:
                                     # Retry once — transient startup failures
                                     # (stale module cache, import race) often
-                                    # resolve on the second attempt.
+                                    # resolve on the second attempt.  Again
+                                    # clear any failed state first so the
+                                    # retry isn't blocked by the previous
+                                    # crash.
                                     print(
                                         f"  ⚠ {svc_name} died after restart, retrying..."
                                     )
+                                    subprocess.run(
+                                        scope_cmd + ["reset-failed", svc_name],
+                                        capture_output=True,
+                                        text=True,
+                                        timeout=10,
+                                    )
                                     subprocess.run(
                                         scope_cmd + ["restart", svc_name],
                                         capture_output=True,
@@ -7772,10 +7798,13 @@ def _cmd_update_impl(args, gateway_mode: bool):
                                         restarted_services.append(svc_name)
                                         print(f"  ✓ {svc_name} recovered on retry")
                                     else:
+                                        _scope_flag = "--user " if scope == "user" else ""
                                         print(
                                             f"  ✗ {svc_name} failed to stay running after restart.\n"
-                                            f"    Check logs: journalctl --user -u {svc_name} --since '2 min ago'\n"
-                                            f"    Restart manually: systemctl {'--user ' if scope == 'user' else ''}restart {svc_name}"
+                                            f"    Check logs: journalctl {_scope_flag}-u {svc_name} --since '2 min ago'\n"
+                                            f"    Recover manually:\n"
+                                            f"      systemctl {_scope_flag}reset-failed {svc_name}\n"
+                                            f"      systemctl {_scope_flag}restart {svc_name}"
                                         )
                             else:
                                 print(
diff --git a/tests/hermes_cli/test_update_gateway_restart.py b/tests/hermes_cli/test_update_gateway_restart.py
index aa43acd9e1..dca69abe3f 100644
--- a/tests/hermes_cli/test_update_gateway_restart.py
+++ b/tests/hermes_cli/test_update_gateway_restart.py
@@ -1356,3 +1356,232 @@ class TestCmdUpdateLegacyGatewayWarning:
         assert "Legacy Hermes gateway" in captured
         assert "(system scope)" in captured
         assert "sudo" in captured
+
+
+# ---------------------------------------------------------------------------
+# cmd_update — reset-failed precedes systemctl restart on fallback path
+# ---------------------------------------------------------------------------
+
+
+def _systemctl_calls(mock_run, subcommand):
+    """Return every subprocess.run call that was `systemctl [--user] <subcommand>`."""
+    out = []
+    for call in mock_run.call_args_list:
+        argv = call.args[0]
+        joined = " ".join(str(c) for c in argv)
+        if "systemctl" in joined and subcommand in joined:
+            out.append(argv)
+    return out
+
+
+class TestCmdUpdateResetFailedBeforeRestart:
+    """`hermes update` must call `systemctl reset-failed` before every
+    fallback `systemctl restart` so a systemd-parked `failed` state from
+    earlier auto-restart crashes (CHDIR, OOM, filesystem race) doesn't
+    permanently strand the unit.
+
+    Mirrors the recovery pattern `hermes gateway restart` (systemd_restart)
+    adopted in PR #20949.  Without this, users hit "gateway never comes
+    back after update" until they manually run `systemctl reset-failed`.
+    """
+
+    @patch("shutil.which", return_value=None)
+    @patch("subprocess.run")
+    def test_reset_failed_runs_before_fallback_restart(
+        self, mock_run, _mock_which, mock_args, monkeypatch,
+    ):
+        """When SIGUSR1 drain times out, the fallback systemctl restart
+        MUST be preceded by a `reset-failed` call against the same unit."""
+        monkeypatch.setattr(gateway_cli, "is_macos", lambda: False)
+        monkeypatch.setattr(gateway_cli, "supports_systemd_services", lambda: True)
+        monkeypatch.setattr(gateway_cli, "is_termux", lambda: False)
+
+        mock_run.side_effect = _make_run_side_effect(
+            commit_count="3",
+            systemd_active=True,
+        )
+
+        # Force the graceful SIGUSR1 path to report failure so cmd_update
+        # falls back to systemctl restart.
+        orig = mock_run.side_effect
+        def wrapped(cmd, **kwargs):
+            joined = " ".join(str(c) for c in cmd)
+            if "systemctl" in joined and "show" in joined and "MainPID" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="4242\n", stderr="")
+            return orig(cmd, **kwargs)
+        mock_run.side_effect = wrapped
+        monkeypatch.setattr(
+            "hermes_cli.gateway._graceful_restart_via_sigusr1",
+            lambda pid, drain_timeout: False,
+        )
+
+        with patch.object(gateway_cli, "find_gateway_pids", return_value=[]):
+            cmd_update(mock_args)
+
+        reset_calls = _systemctl_calls(mock_run, "reset-failed")
+        restart_calls = _systemctl_calls(mock_run, "restart")
+
+        assert any(
+            "hermes-gateway" in " ".join(str(c) for c in call)
+            for call in reset_calls
+        ), (
+            "Expected `systemctl reset-failed hermes-gateway` before the "
+            "fallback `systemctl restart`, got reset_calls=%r" % (reset_calls,)
+        )
+        assert restart_calls, "Fallback systemctl restart should still run"
+
+        # Order check: the first reset-failed must come before the first restart.
+        first_reset_idx = None
+        first_restart_idx = None
+        for idx, call in enumerate(mock_run.call_args_list):
+            joined = " ".join(str(c) for c in call.args[0])
+            if "systemctl" in joined and "reset-failed" in joined and first_reset_idx is None:
+                first_reset_idx = idx
+            if "systemctl" in joined and "restart" in joined and "hermes-gateway" in joined:
+                if first_restart_idx is None:
+                    first_restart_idx = idx
+        assert first_reset_idx is not None and first_restart_idx is not None
+        assert first_reset_idx < first_restart_idx, (
+            f"reset-failed (call #{first_reset_idx}) must precede "
+            f"restart (call #{first_restart_idx}) so the unit isn't "
+            "blocked by systemd's failed-state backoff."
+        )
+
+    @patch("shutil.which", return_value=None)
+    @patch("subprocess.run")
+    def test_reset_failed_also_runs_before_retry_restart(
+        self, mock_run, _mock_which, mock_args, monkeypatch,
+    ):
+        """If the first fallback restart spawns a process that dies
+        immediately (is-active stays inactive), the retry restart must
+        ALSO be preceded by a reset-failed — otherwise the retry races
+        the unit's own failed-state transition."""
+        monkeypatch.setattr(gateway_cli, "is_macos", lambda: False)
+        monkeypatch.setattr(gateway_cli, "supports_systemd_services", lambda: True)
+        monkeypatch.setattr(gateway_cli, "is_termux", lambda: False)
+
+        # is-active toggles:
+        #   first call (discovery / check active)  -> "active"
+        #   later calls (post-restart verify)      -> "inactive"
+        # Using a state counter so both the initial check and the verify
+        # loops behave realistically.
+        is_active_calls = {"n": 0}
+
+        def side_effect(cmd, **kwargs):
+            joined = " ".join(str(c) for c in cmd)
+            if "rev-parse" in joined and "--abbrev-ref" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="main\n", stderr="")
+            if "rev-parse" in joined and "--verify" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+            if "rev-list" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="3\n", stderr="")
+            if "systemctl" in joined and "list-units" in joined:
+                if "--user" in joined:
+                    return subprocess.CompletedProcess(
+                        cmd, 0,
+                        stdout="hermes-gateway.service loaded active running\n",
+                        stderr="",
+                    )
+                return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+            if "systemctl" in joined and "is-active" in joined:
+                is_active_calls["n"] += 1
+                # First check: the unit is active (so we enter the restart path).
+                # Subsequent polling: inactive, which drives the retry branch.
+                if is_active_calls["n"] == 1:
+                    return subprocess.CompletedProcess(cmd, 0, stdout="active\n", stderr="")
+                return subprocess.CompletedProcess(cmd, 3, stdout="inactive\n", stderr="")
+            if "systemctl" in joined and "show" in joined and "MainPID" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="4242\n", stderr="")
+            return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+
+        mock_run.side_effect = side_effect
+
+        # Force graceful SIGUSR1 to fail → fallback restart path.
+        monkeypatch.setattr(
+            "hermes_cli.gateway._graceful_restart_via_sigusr1",
+            lambda pid, drain_timeout: False,
+        )
+
+        with patch.object(gateway_cli, "find_gateway_pids", return_value=[]):
+            cmd_update(mock_args)
+
+        reset_calls = _systemctl_calls(mock_run, "reset-failed")
+        restart_calls = _systemctl_calls(mock_run, "restart")
+
+        # Two restart attempts (initial + retry), two reset-failed calls.
+        gateway_restarts = [
+            c for c in restart_calls
+            if "hermes-gateway" in " ".join(str(a) for a in c)
+        ]
+        gateway_resets = [
+            c for c in reset_calls
+            if "hermes-gateway" in " ".join(str(a) for a in c)
+        ]
+        assert len(gateway_restarts) >= 2, (
+            f"Expected both initial + retry restart calls, got {len(gateway_restarts)}"
+        )
+        assert len(gateway_resets) >= 2, (
+            f"Expected reset-failed before BOTH restart attempts, "
+            f"got {len(gateway_resets)} reset-failed call(s)"
+        )
+
+    @patch("shutil.which", return_value=None)
+    @patch("subprocess.run")
+    def test_final_failure_message_tells_user_to_reset_failed(
+        self, mock_run, _mock_which, mock_args, capsys, monkeypatch,
+    ):
+        """When both fallback restart attempts fail, the final error
+        message must include `systemctl reset-failed` as part of the
+        manual recovery hint — not just `systemctl restart` on its own,
+        which is the step that just failed twice."""
+        monkeypatch.setattr(gateway_cli, "is_macos", lambda: False)
+        monkeypatch.setattr(gateway_cli, "supports_systemd_services", lambda: True)
+        monkeypatch.setattr(gateway_cli, "is_termux", lambda: False)
+
+        is_active_calls = {"n": 0}
+
+        def side_effect(cmd, **kwargs):
+            joined = " ".join(str(c) for c in cmd)
+            if "rev-parse" in joined and "--abbrev-ref" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="main\n", stderr="")
+            if "rev-parse" in joined and "--verify" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+            if "rev-list" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="3\n", stderr="")
+            if "systemctl" in joined and "list-units" in joined:
+                if "--user" in joined:
+                    return subprocess.CompletedProcess(
+                        cmd, 0,
+                        stdout="hermes-gateway.service loaded active running\n",
+                        stderr="",
+                    )
+                return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+            if "systemctl" in joined and "is-active" in joined:
+                is_active_calls["n"] += 1
+                if is_active_calls["n"] == 1:
+                    return subprocess.CompletedProcess(cmd, 0, stdout="active\n", stderr="")
+                return subprocess.CompletedProcess(cmd, 3, stdout="inactive\n", stderr="")
+            if "systemctl" in joined and "show" in joined and "MainPID" in joined:
+                return subprocess.CompletedProcess(cmd, 0, stdout="4242\n", stderr="")
+            return subprocess.CompletedProcess(cmd, 0, stdout="", stderr="")
+
+        mock_run.side_effect = side_effect
+        monkeypatch.setattr(
+            "hermes_cli.gateway._graceful_restart_via_sigusr1",
+            lambda pid, drain_timeout: False,
+        )
+
+        with patch.object(gateway_cli, "find_gateway_pids", return_value=[]):
+            cmd_update(mock_args)
+
+        captured = capsys.readouterr().out
+        assert "failed to stay running" in captured, (
+            "Expected the terminal failure message to fire when both "
+            f"restart attempts don't survive.  Got:\n{captured}"
+        )
+        assert "reset-failed" in captured, (
+            "Final recovery hint must include `reset-failed` so users "
+            "know how to escape systemd's parked failed state.  Got:\n"
+            f"{captured}"
+        )
+        assert "hermes-gateway" in captured