diff --git a/nomad/core_sched.go b/nomad/core_sched.go
index 7275af61d..0df6f499e 100644
--- a/nomad/core_sched.go
+++ b/nomad/core_sched.go
@@ -471,6 +471,8 @@ func (c *CoreScheduler) deploymentGC(eval *structs.Evaluation) error {
 
 	// Collect the deployments to GC
 	var gcDeployment []string
+
+OUTER:
 	for {
 		raw := iter.Next()
 		if raw == nil {
@@ -483,6 +485,21 @@ func (c *CoreScheduler) deploymentGC(eval *structs.Evaluation) error {
 			continue
 		}
 
+		// Ensure there are no allocs referencing this deployment.
+		allocs, err := c.snap.AllocsByDeployment(ws, deploy.ID)
+		if err != nil {
+			c.srv.logger.Printf("[ERR] sched.core: failed to get allocs for deployment %s: %v",
+				deploy.ID, err)
+			continue
+		}
+
+		// Ensure there is no allocation referencing the deployment.
+		for _, alloc := range allocs {
+			if !alloc.TerminalStatus() {
+				continue OUTER
+			}
+		}
+
 		// Deployment is eligible for garbage collection
 		gcDeployment = append(gcDeployment, deploy.ID)
 	}
diff --git a/nomad/core_sched_test.go b/nomad/core_sched_test.go
index 76da207dd..c6e0beabb 100644
--- a/nomad/core_sched_test.go
+++ b/nomad/core_sched_test.go
@@ -1325,12 +1325,19 @@ func TestCoreScheduler_DeploymentGC(t *testing.T) {
 	// COMPAT Remove in 0.6: Reset the FSM time table since we reconcile which sets index 0
 	s1.fsm.timetable.table = make([]TimeTableEntry, 1, 10)
 
-	// Insert terminal and active deployment
+	// Insert an active, terminal, and terminal with allocations edeployment
 	state := s1.fsm.State()
-	d1, d2 := mock.Deployment(), mock.Deployment()
+	d1, d2, d3 := mock.Deployment(), mock.Deployment(), mock.Deployment()
 	d1.Status = structs.DeploymentStatusFailed
+	d3.Status = structs.DeploymentStatusSuccessful
 	assert.Nil(state.UpsertDeployment(1000, d1), "UpsertDeployment")
 	assert.Nil(state.UpsertDeployment(1001, d2), "UpsertDeployment")
+	assert.Nil(state.UpsertDeployment(1002, d3), "UpsertDeployment")
+
+	a := mock.Alloc()
+	a.JobID = d3.JobID
+	a.DeploymentID = d3.ID
+	assert.Nil(state.UpsertAllocs(1003, []*structs.Allocation{a}), "UpsertAllocs")
 
 	// Update the time tables to make this work
 	tt := s1.fsm.TimeTable()
@@ -1353,6 +1360,9 @@ func TestCoreScheduler_DeploymentGC(t *testing.T) {
 	out2, err := state.DeploymentByID(ws, d2.ID)
 	assert.Nil(err, "DeploymentByID")
 	assert.NotNil(out2, "Active Deployment")
+	out3, err := state.DeploymentByID(ws, d3.ID)
+	assert.Nil(err, "DeploymentByID")
+	assert.NotNil(out3, "Terminal Deployment With Allocs")
 }
 
 func TestCoreScheduler_DeploymentGC_Force(t *testing.T) {
diff --git a/nomad/state/state_store.go b/nomad/state/state_store.go
index cd7ee3f0b..601999352 100644
--- a/nomad/state/state_store.go
+++ b/nomad/state/state_store.go
@@ -2543,7 +2543,7 @@ func (s *StateStore) updateDeploymentWithAlloc(index uint64, alloc, existing *st
 		return err
 	}
 	if deployment == nil {
-		return fmt.Errorf("allocation %q references unknown deployment %q", alloc.ID, alloc.DeploymentID)
+		return nil
 	}
 
 	// Retrieve the deployment state object