diff --git a/CHANGELOG.md b/CHANGELOG.md
index 87a9e60b4d01..12b9e20663c8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -264,7 +264,8 @@ extension interfaces. `module.Manager.Modules` is now of type `map[string]interf
 * (x/staking) [#14590](https://github.com/cosmos/cosmos-sdk/pull/14590) `MsgUndelegateResponse` now includes undelegated amount. `x/staking` module's `keeper.Undelegate` now returns 3 values (completionTime,undelegateAmount,error)  instead of 2.
 * (x/feegrant) [14649](https://github.com/cosmos/cosmos-sdk/pull/14649) Extract Feegrant in its own go.mod and rename the package to `cosmossdk.io/x/feegrant`.
 * (x/bank) [#14894](https://github.com/cosmos/cosmos-sdk/pull/14894) Return a human readable denomination for IBC vouchers when querying bank balances. Added a `ResolveDenom` parameter to `types.QueryAllBalancesRequest`.
-* (crypto) [#15070](https://github.com/cosmos/cosmos-sdk/pull/15070) `GenerateFromPassword` and `Cost` from `bcrypt.go` now take a `uint32` instead of a `int` type.  
+* (crypto) [#15070](https://github.com/cosmos/cosmos-sdk/pull/15070) `GenerateFromPassword` and `Cost` from `bcrypt.go` now take a `uint32` instead of a `int` type.
+* (client) [#15123](https://github.com/cosmos/cosmos-sdk/pull/15123) `NewFactoryCLI` now returns an error, in addition to the `Factory`.
 
 ### Client Breaking Changes
 
@@ -315,6 +316,7 @@ extension interfaces. `module.Manager.Modules` is now of type `map[string]interf
 * (server) [#13778](https://github.com/cosmos/cosmos-sdk/pull/13778) Set Cosmos SDK default endpoints to localhost to avoid unknown exposure of endpoints.
 * (x/auth) [#13877](https://github.com/cosmos/cosmos-sdk/pull/13877) Handle missing account numbers during `InitGenesis`.
 * (cli) [#14509](https://github.com/cosmos/cosmos-sdk/pull/#14509) Added missing options to keyring-backend flag usage
+* (cli) [#15123](https://github.com/cosmos/cosmos-sdk/pull/15123) Change the offline mode behavior that does not match the written in the description to behave as written
 
 ### Deprecated
 
diff --git a/client/tx/factory.go b/client/tx/factory.go
index cb2a7b0e271e..d642991a4426 100644
--- a/client/tx/factory.go
+++ b/client/tx/factory.go
@@ -47,7 +47,7 @@ type Factory struct {
 }
 
 // NewFactoryCLI creates a new Factory.
-func NewFactoryCLI(clientCtx client.Context, flagSet *pflag.FlagSet) Factory {
+func NewFactoryCLI(clientCtx client.Context, flagSet *pflag.FlagSet) (Factory, error) {
 	signModeStr := clientCtx.SignModeStr
 
 	signMode := signing.SignMode_SIGN_MODE_UNSPECIFIED
@@ -64,8 +64,16 @@ func NewFactoryCLI(clientCtx client.Context, flagSet *pflag.FlagSet) Factory {
 		signMode = signing.SignMode_SIGN_MODE_EIP_191
 	}
 
-	accNum, _ := flagSet.GetUint64(flags.FlagAccountNumber)
-	accSeq, _ := flagSet.GetUint64(flags.FlagSequence)
+	var accNum, accSeq uint64
+	if clientCtx.Offline {
+		if flagSet.Changed(flags.FlagAccountNumber) && flagSet.Changed(flags.FlagSequence) {
+			accNum, _ = flagSet.GetUint64(flags.FlagAccountNumber)
+			accSeq, _ = flagSet.GetUint64(flags.FlagSequence)
+		} else {
+			return Factory{}, errors.New("account-number and sequence must be set in offline mode")
+		}
+	}
+
 	gasAdj, _ := flagSet.GetFloat64(flags.FlagGasAdjustment)
 	memo, _ := flagSet.GetString(flags.FlagNote)
 	timeoutHeight, _ := flagSet.GetUint64(flags.FlagTimeoutHeight)
@@ -105,7 +113,7 @@ func NewFactoryCLI(clientCtx client.Context, flagSet *pflag.FlagSet) Factory {
 
 	f = f.WithPreprocessTxHook(clientCtx.PreprocessTxHook)
 
-	return f
+	return f, nil
 }
 
 func (f Factory) AccountNumber() uint64                     { return f.accountNumber }
@@ -435,19 +443,14 @@ func (f Factory) Prepare(clientCtx client.Context) (Factory, error) {
 	}
 
 	initNum, initSeq := fc.accountNumber, fc.sequence
-	if initNum == 0 || initSeq == 0 {
+	if initNum == 0 && initSeq == 0 {
 		num, seq, err := fc.accountRetriever.GetAccountNumberSequence(clientCtx, from)
 		if err != nil {
 			return fc, err
 		}
 
-		if initNum == 0 {
-			fc = fc.WithAccountNumber(num)
-		}
-
-		if initSeq == 0 {
-			fc = fc.WithSequence(seq)
-		}
+		fc = fc.WithAccountNumber(num)
+		fc = fc.WithSequence(seq)
 	}
 
 	return fc, nil
diff --git a/client/tx/tx.go b/client/tx/tx.go
index 9311bbd2908f..0e4e9ac96609 100644
--- a/client/tx/tx.go
+++ b/client/tx/tx.go
@@ -24,7 +24,10 @@ import (
 // GenerateOrBroadcastTxCLI will either generate and print and unsigned transaction
 // or sign it and broadcast it returning an error upon failure.
 func GenerateOrBroadcastTxCLI(clientCtx client.Context, flagSet *pflag.FlagSet, msgs ...sdk.Msg) error {
-	txf := NewFactoryCLI(clientCtx, flagSet)
+	txf, err := NewFactoryCLI(clientCtx, flagSet)
+	if err != nil {
+		return err
+	}
 
 	return GenerateOrBroadcastTxWithFactory(clientCtx, txf, msgs...)
 }
@@ -69,6 +72,10 @@ func BroadcastTx(clientCtx client.Context, txf Factory, msgs ...sdk.Msg) error {
 	}
 
 	if txf.SimulateAndExecute() || clientCtx.Simulate {
+		if clientCtx.Offline {
+			return errors.New("cannot estimate gas in offline mode")
+		}
+
 		_, adjusted, err := CalculateGas(clientCtx, txf, msgs...)
 		if err != nil {
 			return err
diff --git a/tests/e2e/auth/suite.go b/tests/e2e/auth/suite.go
index 68fa6ff59a8f..ddd3f4741564 100644
--- a/tests/e2e/auth/suite.go
+++ b/tests/e2e/auth/suite.go
@@ -1213,9 +1213,20 @@ func (s *E2ETestSuite) TestCLIMultisign() {
 	sign2File := testutil.WriteToNewTempFile(s.T(), account2Signature.String())
 	defer sign2File.Close()
 
-	// Does not work in offline mode.
-	_, err = authclitestutil.TxMultiSignExec(val1.ClientCtx, multisigRecord.Name, multiGeneratedTxFile.Name(), "--offline", sign1File.Name(), sign2File.Name())
-	s.Require().EqualError(err, fmt.Sprintf("couldn't verify signature for address %s", addr1))
+	// Work in offline mode.
+	multisigAccNum, multisigSeq, err := val1.ClientCtx.AccountRetriever.GetAccountNumberSequence(val1.ClientCtx, addr)
+	s.Require().NoError(err)
+	_, err = authclitestutil.TxMultiSignExec(
+		val1.ClientCtx,
+		multisigRecord.Name,
+		multiGeneratedTxFile.Name(),
+		fmt.Sprintf("--%s", flags.FlagOffline),
+		fmt.Sprintf("--%s=%d", flags.FlagAccountNumber, multisigAccNum),
+		fmt.Sprintf("--%s=%d", flags.FlagSequence, multisigSeq),
+		sign1File.Name(),
+		sign2File.Name(),
+	)
+	s.Require().NoError(err)
 
 	val1.ClientCtx.Offline = false
 	multiSigWith2Signatures, err := authclitestutil.TxMultiSignExec(val1.ClientCtx, multisigRecord.Name, multiGeneratedTxFile.Name(), sign1File.Name(), sign2File.Name())
diff --git a/tests/e2e/tx/service_test.go b/tests/e2e/tx/service_test.go
index c7767ac089a9..533fedbd8075 100644
--- a/tests/e2e/tx/service_test.go
+++ b/tests/e2e/tx/service_test.go
@@ -11,6 +11,7 @@ import (
 	"github.com/stretchr/testify/suite"
 
 	errorsmod "cosmossdk.io/errors"
+
 	"cosmossdk.io/simapp"
 	"github.com/cosmos/cosmos-sdk/client"
 	"github.com/cosmos/cosmos-sdk/client/flags"
@@ -90,6 +91,8 @@ func (s *E2ETestSuite) SetupSuite() {
 			sdk.NewCoin(s.cfg.BondDenom, sdk.NewInt(1)),
 		),
 		fmt.Sprintf("--%s=true", flags.FlagSkipConfirmation),
+		fmt.Sprintf("--%s", flags.FlagOffline),
+		fmt.Sprintf("--%s=0", flags.FlagAccountNumber),
 		fmt.Sprintf("--%s=2", flags.FlagSequence),
 		fmt.Sprintf("--%s=%s", flags.FlagBroadcastMode, flags.BroadcastSync),
 		fmt.Sprintf("--%s=%s", flags.FlagFees, sdk.NewCoins(sdk.NewCoin(s.cfg.BondDenom, sdk.NewInt(10))).String()),
diff --git a/x/auth/client/cli/tips.go b/x/auth/client/cli/tips.go
index ab4f8937f91c..82904c6ab064 100644
--- a/x/auth/client/cli/tips.go
+++ b/x/auth/client/cli/tips.go
@@ -35,7 +35,10 @@ func GetAuxToFeeCommand() *cobra.Command {
 				return fmt.Errorf("expected chain-id %s, got %s in aux signer data", clientCtx.ChainID, auxSignerData.SignDoc.ChainId)
 			}
 
-			f := clienttx.NewFactoryCLI(clientCtx, cmd.Flags())
+			f, err := clienttx.NewFactoryCLI(clientCtx, cmd.Flags())
+			if err != nil {
+				return err
+			}
 
 			txBuilder := clientCtx.TxConfig.NewTxBuilder()
 			err = txBuilder.AddAuxSignerData(auxSignerData)
diff --git a/x/auth/client/cli/tx_multisign.go b/x/auth/client/cli/tx_multisign.go
index d5f271b3bdb6..58d9e5265989 100644
--- a/x/auth/client/cli/tx_multisign.go
+++ b/x/auth/client/cli/tx_multisign.go
@@ -82,7 +82,10 @@ func makeMultiSignCmd() func(cmd *cobra.Command, args []string) (err error) {
 			return
 		}
 
-		txFactory := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		txFactory, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		if err != nil {
+			return err
+		}
 		if txFactory.SignMode() == signingtypes.SignMode_SIGN_MODE_UNSPECIFIED {
 			txFactory = txFactory.WithSignMode(signingtypes.SignMode_SIGN_MODE_LEGACY_AMINO_JSON)
 		}
@@ -257,7 +260,10 @@ func makeBatchMultisignCmd() func(cmd *cobra.Command, args []string) error {
 		}
 
 		txCfg := clientCtx.TxConfig
-		txFactory := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		txFactory, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		if err != nil {
+			return err
+		}
 		if txFactory.SignMode() == signingtypes.SignMode_SIGN_MODE_UNSPECIFIED {
 			txFactory = txFactory.WithSignMode(signingtypes.SignMode_SIGN_MODE_LEGACY_AMINO_JSON)
 		}
diff --git a/x/auth/client/cli/tx_sign.go b/x/auth/client/cli/tx_sign.go
index 30132ec14fd3..9b37937dc634 100644
--- a/x/auth/client/cli/tx_sign.go
+++ b/x/auth/client/cli/tx_sign.go
@@ -71,7 +71,10 @@ func makeSignBatchCmd() func(cmd *cobra.Command, args []string) error {
 		if err != nil {
 			return err
 		}
-		txFactory := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		txFactory, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+		if err != nil {
+			return err
+		}
 		txCfg := clientCtx.TxConfig
 		printSignatureOnly, _ := cmd.Flags().GetBool(flagSigOnly)
 
diff --git a/x/auth/client/cli/validate_sigs.go b/x/auth/client/cli/validate_sigs.go
index 784cac89d912..54bfaa0406fb 100644
--- a/x/auth/client/cli/validate_sigs.go
+++ b/x/auth/client/cli/validate_sigs.go
@@ -133,7 +133,10 @@ func readTxAndInitContexts(clientCtx client.Context, cmd *cobra.Command, filenam
 		return clientCtx, tx.Factory{}, nil, err
 	}
 
-	txFactory := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+	txFactory, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+	if err != nil {
+		return clientCtx, tx.Factory{}, nil, err
+	}
 
 	return clientCtx, txFactory, stdTx, nil
 }
diff --git a/x/genutil/client/cli/gentx.go b/x/genutil/client/cli/gentx.go
index c5809cd10268..e73fce8a125d 100644
--- a/x/genutil/client/cli/gentx.go
+++ b/x/genutil/client/cli/gentx.go
@@ -127,7 +127,10 @@ $ %s gentx my-key-name 1000000stake --home=/path/to/home/dir --keyring-backend=o
 				return errors.Wrap(err, "failed to validate account in genesis")
 			}
 
-			txFactory := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+			txFactory, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+			if err != nil {
+				return err
+			}
 
 			pub, err := key.GetAddress()
 			if err != nil {
diff --git a/x/staking/client/cli/tx.go b/x/staking/client/cli/tx.go
index a88abb735080..9453c10aef1a 100644
--- a/x/staking/client/cli/tx.go
+++ b/x/staking/client/cli/tx.go
@@ -90,13 +90,16 @@ where we can get the pubkey using "%s tendermint show-validator"
 				return err
 			}
 
+			txf, err := tx.NewFactoryCLI(clientCtx, cmd.Flags())
+			if err != nil {
+				return err
+			}
+
 			validator, err := parseAndValidateValidatorJSON(clientCtx.Codec, args[0])
 			if err != nil {
 				return err
 			}
 
-			txf := tx.NewFactoryCLI(clientCtx, cmd.Flags()).
-				WithTxConfig(clientCtx.TxConfig).WithAccountRetriever(clientCtx.AccountRetriever)
 			txf, msg, err := newBuildCreateValidatorMsg(clientCtx, txf, cmd.Flags(), validator)
 			if err != nil {
 				return err