diff --git a/pkg/reconciler/managed/reconciler.go b/pkg/reconciler/managed/reconciler.go
index 0a9daddfa..3a6a447b5 100644
--- a/pkg/reconciler/managed/reconciler.go
+++ b/pkg/reconciler/managed/reconciler.go
@@ -616,7 +616,7 @@ func NewReconciler(m manager.Manager, of resource.ManagedKind, o ...ReconcilerOp
 }
 
 // Reconcile a managed resource with an external resource.
-func (r *Reconciler) Reconcile(_ context.Context, req reconcile.Request) (result reconcile.Result, err error) { // nolint:gocyclo
+func (r *Reconciler) Reconcile(_ context.Context, req reconcile.Request) (reconcile.Result, error) { // nolint:gocyclo
 	// NOTE(negz): This method is a well over our cyclomatic complexity goal.
 	// Be wary of adding additional complexity.
 
@@ -745,13 +745,7 @@ func (r *Reconciler) Reconcile(_ context.Context, req reconcile.Request) (result
 		if disconnectErr := r.external.Disconnect(ctx); disconnectErr != nil {
 			log.Debug("Cannot disconnect from provider", "error", disconnectErr)
 			record.Event(managed, event.Warning(reasonCannotDisconnect, disconnectErr))
-			disconnectErr = errors.Wrap(disconnectErr, errReconcileDisconnect)
-			managed.SetConditions(xpv1.ReconcileError(disconnectErr))
-			if err != nil {
-				err = errors.Wrap(err, disconnectErr.Error())
-			} else {
-				err = disconnectErr
-			}
+			managed.SetConditions(xpv1.ReconcileError(errors.Wrap(disconnectErr, errReconcileDisconnect)))
 		}
 	}()
 
diff --git a/pkg/reconciler/managed/reconciler_test.go b/pkg/reconciler/managed/reconciler_test.go
index ba16d3d11..525cfe52b 100644
--- a/pkg/reconciler/managed/reconciler_test.go
+++ b/pkg/reconciler/managed/reconciler_test.go
@@ -287,7 +287,7 @@ func TestReconciler(t *testing.T) {
 			want: want{result: reconcile.Result{Requeue: true}},
 		},
 		"ExternalDisconnectError": {
-			reason: "Errors disconnecting from the provider should return error.",
+			reason: "Error disconnecting from the provider should not trigger requeue.",
 			args: args{
 				m: &fake.Manager{
 					Client: &test.MockClient{
@@ -324,10 +324,7 @@ func TestReconciler(t *testing.T) {
 					WithFinalizer(resource.FinalizerFns{AddFinalizerFn: func(_ context.Context, _ resource.Object) error { return nil }}),
 				},
 			},
-			want: want{
-				result: reconcile.Result{RequeueAfter: defaultpollInterval},
-				err:    errors.Wrap(errors.New("boom"), "disconnect failed"),
-			},
+			want: want{result: reconcile.Result{RequeueAfter: defaultpollInterval}},
 		},
 		"ExternalObserveErrorDisconnectError": {
 			reason: "Errors disconnecting from the provider after error observing the external resource should trigger a requeue after a short wait and return error.",
@@ -364,10 +361,7 @@ func TestReconciler(t *testing.T) {
 					),
 				},
 			},
-			want: want{
-				result: reconcile.Result{Requeue: true},
-				err:    errors.Wrap(errors.New("boom"), "disconnect failed"),
-			},
+			want: want{result: reconcile.Result{Requeue: true}},
 		},
 		"ExternalObserveError": {
 			reason: "Errors observing the external resource should trigger a requeue after a short wait.",