diff --git a/staging/src/k8s.io/legacy-cloud-providers/gce/gce_instances.go b/staging/src/k8s.io/legacy-cloud-providers/gce/gce_instances.go
index 14859e68fcd..b0286f1fc58 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/gce/gce_instances.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/gce/gce_instances.go
@@ -561,7 +561,11 @@ func (g *Cloud) getInstancesByNames(names []string) ([]*gceInstance, error) {
 		return nil, err
 	}
 	if len(foundInstances) != len(names) {
-		return nil, cloudprovider.InstanceNotFound
+		if len(foundInstances) == 0 {
+			// return error so the TargetPool nodecount does not drop to 0 unexpectedly.
+			return nil, cloudprovider.InstanceNotFound
+		}
+		klog.Warningf("getFoundInstanceByNames - input instances %d, found %d. Continuing LoadBalancer Update", len(names), len(foundInstances))
 	}
 	return foundInstances, nil
 }
diff --git a/staging/src/k8s.io/legacy-cloud-providers/gce/gce_loadbalancer_external_test.go b/staging/src/k8s.io/legacy-cloud-providers/gce/gce_loadbalancer_external_test.go
index 18f604c62fd..18cf3dc66a8 100644
--- a/staging/src/k8s.io/legacy-cloud-providers/gce/gce_loadbalancer_external_test.go
+++ b/staging/src/k8s.io/legacy-cloud-providers/gce/gce_loadbalancer_external_test.go
@@ -372,6 +372,24 @@ func TestUpdateExternalLoadBalancer(t *testing.T) {
 		[]string{fmt.Sprintf("/zones/%s/instances/%s", vals.ZoneName, nodeName)},
 		pool.Instances,
 	)
+
+	anotherNewNodeName := "test-node-3"
+	newNodes, err = createAndInsertNodes(gce, []string{nodeName, newNodeName, anotherNewNodeName}, vals.ZoneName)
+	assert.NoError(t, err)
+
+	// delete one of the existing nodes, but include it in the list
+	err = gce.DeleteInstance(gce.ProjectID(), vals.ZoneName, nodeName)
+	require.NoError(t, err)
+
+	// The update should ignore the reference to non-existent node "test-node-1", but update target pool with rest of the valid nodes.
+	err = gce.updateExternalLoadBalancer(vals.ClusterName, svc, newNodes)
+	assert.NoError(t, err)
+
+	pool, err = gce.GetTargetPool(lbName, gce.region)
+	require.NoError(t, err)
+
+	namePrefix := fmt.Sprintf("/zones/%s/instances/", vals.ZoneName)
+	assert.ElementsMatch(t, pool.Instances, []string{namePrefix + newNodeName, namePrefix + anotherNewNodeName})
 }
 
 func TestEnsureExternalLoadBalancerDeleted(t *testing.T) {