diff --git a/.changelog/16905.txt b/.changelog/16905.txt
new file mode 100644
index 000000000..ab540c271
--- /dev/null
+++ b/.changelog/16905.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+services: Fixed a bug preventing group service deregistrations after alloc restarts
+```
diff --git a/client/allocrunner/group_service_hook.go b/client/allocrunner/group_service_hook.go
index 30a698ecd..a63f6f607 100644
--- a/client/allocrunner/group_service_hook.go
+++ b/client/allocrunner/group_service_hook.go
@@ -119,12 +119,14 @@ func (h *groupServiceHook) Prerun() error {
 	defer func() {
 		// Mark prerun as true to unblock Updates
 		h.prerun = true
+		// Mark deregistered as false to allow de-registration
+		h.deregistered = false
 		h.mu.Unlock()
 	}()
 	return h.preRunLocked()
 }
 
-// caller must hold h.lock
+// caller must hold h.mu
 func (h *groupServiceHook) preRunLocked() error {
 	if len(h.services) == 0 {
 		return nil
@@ -188,6 +190,8 @@ func (h *groupServiceHook) PreTaskRestart() error {
 	defer func() {
 		// Mark prerun as true to unblock Updates
 		h.prerun = true
+		// Mark deregistered as false to allow de-registration
+		h.deregistered = false
 		h.mu.Unlock()
 	}()
 
@@ -201,7 +205,7 @@ func (h *groupServiceHook) PreKill() {
 
 // implements the PreKill hook
 //
-// caller must hold h.lock
+// caller must hold h.mu
 func (h *groupServiceHook) preKillLocked() {
 	// If we have a shutdown delay deregister group services and then wait
 	// before continuing to kill tasks.
diff --git a/e2e/consul/alloc_restart_test.go b/e2e/consul/alloc_restart_test.go
new file mode 100644
index 000000000..270bd5d07
--- /dev/null
+++ b/e2e/consul/alloc_restart_test.go
@@ -0,0 +1,74 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: MPL-2.0
+
+package consul
+
+import (
+	"context"
+	"errors"
+	"testing"
+	"time"
+
+	"github.com/hashicorp/nomad/e2e/e2eutil"
+	"github.com/hashicorp/nomad/helper/uuid"
+	"github.com/shoenig/test/must"
+	"github.com/shoenig/test/wait"
+)
+
+func testAllocRestart(t *testing.T) {
+	nc := e2eutil.NomadClient(t)
+	cc := e2eutil.ConsulClient(t).Catalog()
+
+	const jobFile = "./input/alloc_restart.hcl"
+	jobID := "alloc-restart-" + uuid.Short()
+	jobIDs := []string{jobID}
+
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+	defer e2eutil.CleanupJobsAndGCWithContext(t, ctx, &jobIDs)
+
+	// register our job
+	err := e2eutil.Register(jobID, jobFile)
+	must.NoError(t, err)
+
+	// wait for our allocation to be running
+	allocID := e2eutil.SingleAllocID(t, jobID, "", 0)
+	e2eutil.WaitForAllocRunning(t, nc, allocID)
+
+	// make sure our service is registered
+	services, _, err := cc.Service("alloc-restart-http", "", nil)
+	must.NoError(t, err)
+	must.Len(t, 1, services)
+
+	// restart the alloc
+	stderr, err := e2eutil.Command("nomad", "alloc", "restart", allocID)
+	must.NoError(t, err, must.Sprintf("stderr: %s", stderr))
+
+	// wait for alloc running again
+	e2eutil.WaitForAllocRunning(t, nc, allocID)
+
+	// make sure our service is still registered
+	services, _, err = cc.Service("alloc-restart-http", "", nil)
+	must.NoError(t, err)
+	must.Len(t, 1, services)
+
+	err = e2eutil.StopJob(jobID)
+	must.NoError(t, err)
+
+	// make sure our service is no longer registered
+	f := func() error {
+		services, _, err = cc.Service("alloc-restart-http", "", nil)
+		if err != nil {
+			return err
+		}
+		if len(services) != 0 {
+			return errors.New("expected empty services")
+		}
+		return nil
+	}
+	must.Wait(t, wait.InitialSuccess(
+		wait.ErrorFunc(f),
+		wait.Timeout(10*time.Second),
+		wait.Gap(1*time.Second),
+	))
+}
diff --git a/e2e/consul/consul_test.go b/e2e/consul/consul_test.go
new file mode 100644
index 000000000..6be7dc286
--- /dev/null
+++ b/e2e/consul/consul_test.go
@@ -0,0 +1,19 @@
+package consul
+
+import (
+	"testing"
+
+	"github.com/hashicorp/nomad/e2e/e2eutil"
+)
+
+func TestConsul(t *testing.T) {
+	// todo: migrate the remaining consul tests
+
+	nomad := e2eutil.NomadClient(t)
+
+	e2eutil.WaitForLeader(t, nomad)
+	e2eutil.WaitForNodesReady(t, nomad, 1)
+
+	t.Run("testServiceReversion", testServiceReversion)
+	t.Run("testAllocRestart", testAllocRestart)
+}
diff --git a/e2e/consul/input/alloc_restart.hcl b/e2e/consul/input/alloc_restart.hcl
new file mode 100644
index 000000000..d2937ab0e
--- /dev/null
+++ b/e2e/consul/input/alloc_restart.hcl
@@ -0,0 +1,33 @@
+job "alloc-restart" {
+  constraint {
+    attribute = "${attr.kernel.name}"
+    value     = "linux"
+  }
+
+  group "group" {
+    network {
+      port "http" {
+        to = 8080
+      }
+    }
+
+    service {
+      name = "alloc-restart-http"
+      port = "http"
+    }
+
+    task "python" {
+      driver = "raw_exec"
+
+      config {
+        command = "python3"
+        args    = ["-m", "http.server", "8080", "--directory", "/tmp"]
+      }
+
+      resources {
+        cpu    = 16
+        memory = 32
+      }
+    }
+  }
+}
diff --git a/e2e/consul/service_revert_test.go b/e2e/consul/service_revert_test.go
index b6ea7f9a3..11c5b6af4 100644
--- a/e2e/consul/service_revert_test.go
+++ b/e2e/consul/service_revert_test.go
@@ -13,17 +13,6 @@ import (
 	"github.com/shoenig/test/must"
 )
 
-func TestConsul(t *testing.T) {
-	// todo: migrate the remaining consul tests
-
-	nomad := e2eutil.NomadClient(t)
-
-	e2eutil.WaitForLeader(t, nomad)
-	e2eutil.WaitForNodesReady(t, nomad, 1)
-
-	t.Run("testServiceReversion", testServiceReversion)
-}
-
 // testServiceReversion asserts we can
 // - submit a job with a service
 // - update that job and modify service