diff --git a/baseapp/abci_test.go b/baseapp/abci_test.go
index 4a3693094353..c8d9433c39b5 100644
--- a/baseapp/abci_test.go
+++ b/baseapp/abci_test.go
@@ -2398,3 +2398,104 @@ func TestOptimisticExecution(t *testing.T) {
 
 	require.Equal(t, int64(50), suite.baseApp.LastBlockHeight())
 }
+
+func TestABCI_Proposal_FailReCheckTx(t *testing.T) {
+	pool := mempool.NewPriorityMempool[int64](mempool.PriorityNonceMempoolConfig[int64]{
+		TxPriority:      mempool.NewDefaultTxPriority(),
+		MaxTx:           0,
+		SignerExtractor: mempool.NewDefaultSignerExtractionAdapter(),
+	})
+
+	anteOpt := func(bapp *baseapp.BaseApp) {
+		bapp.SetAnteHandler(func(ctx sdk.Context, tx sdk.Tx, simulate bool) (sdk.Context, error) {
+			// always fail on recheck, just to test the recheck logic
+			if ctx.IsReCheckTx() {
+				return ctx, errors.New("recheck failed in ante handler")
+			}
+
+			return ctx, nil
+		})
+	}
+
+	suite := NewBaseAppSuite(t, anteOpt, baseapp.SetMempool(pool))
+	baseapptestutil.RegisterKeyValueServer(suite.baseApp.MsgServiceRouter(), MsgKeyValueImpl{})
+	baseapptestutil.RegisterCounterServer(suite.baseApp.MsgServiceRouter(), NoopCounterServerImpl{})
+
+	_, err := suite.baseApp.InitChain(&abci.RequestInitChain{
+		ConsensusParams: &cmtproto.ConsensusParams{},
+	})
+	require.NoError(t, err)
+
+	tx := newTxCounter(t, suite.txConfig, 0, 1)
+	txBytes, err := suite.txConfig.TxEncoder()(tx)
+	require.NoError(t, err)
+
+	reqCheckTx := abci.RequestCheckTx{
+		Tx:   txBytes,
+		Type: abci.CheckTxType_New,
+	}
+	_, err = suite.baseApp.CheckTx(&reqCheckTx)
+	require.NoError(t, err)
+
+	tx2 := newTxCounter(t, suite.txConfig, 1, 1)
+
+	tx2Bytes, err := suite.txConfig.TxEncoder()(tx2)
+	require.NoError(t, err)
+
+	err = pool.Insert(sdk.Context{}, tx2)
+	require.NoError(t, err)
+
+	require.Equal(t, 2, pool.CountTx())
+
+	// call prepareProposal before calling recheck tx, just as a sanity check
+	reqPrepareProposal := abci.RequestPrepareProposal{
+		MaxTxBytes: 1000,
+		Height:     1,
+	}
+	resPrepareProposal, err := suite.baseApp.PrepareProposal(&reqPrepareProposal)
+	require.NoError(t, err)
+	require.Equal(t, 2, len(resPrepareProposal.Txs))
+
+	// call recheck on the first tx, it MUST return an error
+	reqReCheckTx := abci.RequestCheckTx{
+		Tx:   txBytes,
+		Type: abci.CheckTxType_Recheck,
+	}
+	resp, err := suite.baseApp.CheckTx(&reqReCheckTx)
+	require.NoError(t, err)
+	require.True(t, resp.IsErr())
+	require.Equal(t, "recheck failed in ante handler", resp.Log)
+
+	// call prepareProposal again, should return only the second tx
+	resPrepareProposal, err = suite.baseApp.PrepareProposal(&reqPrepareProposal)
+	require.NoError(t, err)
+	require.Equal(t, 1, len(resPrepareProposal.Txs))
+	require.Equal(t, tx2Bytes, resPrepareProposal.Txs[0])
+
+	// check the mempool, it should have only the second tx
+	require.Equal(t, 1, pool.CountTx())
+
+	reqProposalTxBytes := [][]byte{
+		tx2Bytes,
+	}
+	reqProcessProposal := abci.RequestProcessProposal{
+		Txs:    reqProposalTxBytes,
+		Height: reqPrepareProposal.Height,
+	}
+
+	resProcessProposal, err := suite.baseApp.ProcessProposal(&reqProcessProposal)
+	require.NoError(t, err)
+	require.Equal(t, abci.ResponseProcessProposal_ACCEPT, resProcessProposal.Status)
+
+	// the same txs as in PrepareProposal
+	res, err := suite.baseApp.FinalizeBlock(&abci.RequestFinalizeBlock{
+		Height: suite.baseApp.LastBlockHeight() + 1,
+		Txs:    reqProposalTxBytes,
+	})
+	require.NoError(t, err)
+
+	require.Equal(t, 0, pool.CountTx())
+
+	require.NotEmpty(t, res.TxResults[0].Events)
+	require.True(t, res.TxResults[0].IsOK(), fmt.Sprintf("%v", res))
+}
diff --git a/baseapp/baseapp.go b/baseapp/baseapp.go
index 82f47d81b1c5..74ff44d7c547 100644
--- a/baseapp/baseapp.go
+++ b/baseapp/baseapp.go
@@ -911,6 +911,12 @@ func (app *BaseApp) runTx(mode execMode, txBytes []byte) (gInfo sdk.GasInfo, res
 		gasWanted = ctx.GasMeter().Limit()
 
 		if err != nil {
+			if mode == execModeReCheck {
+				// if the ante handler fails on recheck, we want to remove the tx from the mempool
+				if mempoolErr := app.mempool.Remove(tx); mempoolErr != nil {
+					return gInfo, nil, anteEvents, errors.Join(err, mempoolErr)
+				}
+			}
 			return gInfo, nil, nil, err
 		}