diff --git a/pkg/kubelet/kubelet_pods.go b/pkg/kubelet/kubelet_pods.go
index 4b5e59f48f7..115161003cf 100644
--- a/pkg/kubelet/kubelet_pods.go
+++ b/pkg/kubelet/kubelet_pods.go
@@ -1447,6 +1447,20 @@ func (kl *Kubelet) generateAPIPodStatus(pod *v1.Pod, podStatus *kubecontainer.Po
 	allStatus := append(append([]v1.ContainerStatus{}, s.ContainerStatuses...), s.InitContainerStatuses...)
 	s.Phase = getPhase(&pod.Spec, allStatus)
 	klog.V(4).InfoS("Got phase for pod", "pod", klog.KObj(pod), "oldPhase", oldPodStatus.Phase, "phase", s.Phase)
+
+	// Perform a three-way merge between the statuses from the status manager,
+	// runtime, and generated status to ensure terminal status is correctly set.
+	if s.Phase != v1.PodFailed && s.Phase != v1.PodSucceeded {
+		switch {
+		case oldPodStatus.Phase == v1.PodFailed || oldPodStatus.Phase == v1.PodSucceeded:
+			klog.V(4).InfoS("Status manager phase was terminal, updating phase to match", "pod", klog.KObj(pod), "phase", oldPodStatus.Phase)
+			s.Phase = oldPodStatus.Phase
+		case pod.Status.Phase == v1.PodFailed || pod.Status.Phase == v1.PodSucceeded:
+			klog.V(4).InfoS("API phase was terminal, updating phase to match", "pod", klog.KObj(pod), "phase", pod.Status.Phase)
+			s.Phase = pod.Status.Phase
+		}
+	}
+
 	if s.Phase == oldPodStatus.Phase {
 		// preserve the reason and message which is associated with the phase
 		s.Reason = oldPodStatus.Reason
diff --git a/pkg/kubelet/kubelet_pods_test.go b/pkg/kubelet/kubelet_pods_test.go
index 655cb04d115..491a0a284b9 100644
--- a/pkg/kubelet/kubelet_pods_test.go
+++ b/pkg/kubelet/kubelet_pods_test.go
@@ -2595,6 +2595,95 @@ func Test_generateAPIPodStatus(t *testing.T) {
 				},
 			},
 		},
+		{
+			name: "terminal phase from previous status must remain terminal, restartAlways",
+			pod: &v1.Pod{
+				Spec: desiredState,
+				Status: v1.PodStatus{
+					Phase: v1.PodRunning,
+					ContainerStatuses: []v1.ContainerStatus{
+						runningState("containerA"),
+						runningState("containerB"),
+					},
+				},
+			},
+			currentStatus: &kubecontainer.PodStatus{},
+			previousStatus: v1.PodStatus{
+				Phase: v1.PodSucceeded,
+				ContainerStatuses: []v1.ContainerStatus{
+					runningState("containerA"),
+					runningState("containerB"),
+				},
+				// Reason and message should be preserved
+				Reason:  "Test",
+				Message: "test",
+			},
+			expected: v1.PodStatus{
+				Phase:    v1.PodSucceeded,
+				HostIP:   "127.0.0.1",
+				QOSClass: v1.PodQOSBestEffort,
+				Conditions: []v1.PodCondition{
+					{Type: v1.PodInitialized, Status: v1.ConditionTrue, Reason: "PodCompleted"},
+					{Type: v1.PodReady, Status: v1.ConditionFalse, Reason: "PodCompleted"},
+					{Type: v1.ContainersReady, Status: v1.ConditionFalse, Reason: "PodCompleted"},
+					{Type: v1.PodScheduled, Status: v1.ConditionTrue},
+				},
+				ContainerStatuses: []v1.ContainerStatus{
+					ready(waitingWithLastTerminationUnknown("containerA", 1)),
+					ready(waitingWithLastTerminationUnknown("containerB", 1)),
+				},
+				Reason:  "Test",
+				Message: "test",
+			},
+		},
+		{
+			name: "terminal phase from previous status must remain terminal, restartNever",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					NodeName: "machine",
+					Containers: []v1.Container{
+						{Name: "containerA"},
+						{Name: "containerB"},
+					},
+					RestartPolicy: v1.RestartPolicyNever,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodRunning,
+					ContainerStatuses: []v1.ContainerStatus{
+						runningState("containerA"),
+						runningState("containerB"),
+					},
+				},
+			},
+			currentStatus: &kubecontainer.PodStatus{},
+			previousStatus: v1.PodStatus{
+				Phase: v1.PodSucceeded,
+				ContainerStatuses: []v1.ContainerStatus{
+					succeededState("containerA"),
+					succeededState("containerB"),
+				},
+				// Reason and message should be preserved
+				Reason:  "Test",
+				Message: "test",
+			},
+			expected: v1.PodStatus{
+				Phase:    v1.PodSucceeded,
+				HostIP:   "127.0.0.1",
+				QOSClass: v1.PodQOSBestEffort,
+				Conditions: []v1.PodCondition{
+					{Type: v1.PodInitialized, Status: v1.ConditionTrue, Reason: "PodCompleted"},
+					{Type: v1.PodReady, Status: v1.ConditionFalse, Reason: "PodCompleted"},
+					{Type: v1.ContainersReady, Status: v1.ConditionFalse, Reason: "PodCompleted"},
+					{Type: v1.PodScheduled, Status: v1.ConditionTrue},
+				},
+				ContainerStatuses: []v1.ContainerStatus{
+					ready(succeededState("containerA")),
+					ready(succeededState("containerB")),
+				},
+				Reason:  "Test",
+				Message: "test",
+			},
+		},
 		{
 			name: "running can revert to pending",
 			pod: &v1.Pod{
diff --git a/pkg/kubelet/status/status_manager.go b/pkg/kubelet/status/status_manager.go
index 70381df836a..9c93a746b58 100644
--- a/pkg/kubelet/status/status_manager.go
+++ b/pkg/kubelet/status/status_manager.go
@@ -334,7 +334,7 @@ func (m *manager) TerminatePod(pod *v1.Pod) {
 	}
 	status := *oldStatus.DeepCopy()
 	for i := range status.ContainerStatuses {
-		if status.ContainerStatuses[i].State.Terminated != nil || status.ContainerStatuses[i].State.Waiting != nil {
+		if status.ContainerStatuses[i].State.Terminated != nil {
 			continue
 		}
 		status.ContainerStatuses[i].State = v1.ContainerState{
@@ -346,7 +346,7 @@ func (m *manager) TerminatePod(pod *v1.Pod) {
 		}
 	}
 	for i := range status.InitContainerStatuses {
-		if status.InitContainerStatuses[i].State.Terminated != nil || status.InitContainerStatuses[i].State.Waiting != nil {
+		if status.InitContainerStatuses[i].State.Terminated != nil {
 			continue
 		}
 		status.InitContainerStatuses[i].State = v1.ContainerState{
diff --git a/pkg/kubelet/status/status_manager_test.go b/pkg/kubelet/status/status_manager_test.go
index 26e8db86717..855fac52ecd 100644
--- a/pkg/kubelet/status/status_manager_test.go
+++ b/pkg/kubelet/status/status_manager_test.go
@@ -622,6 +622,64 @@ func TestTerminatePod(t *testing.T) {
 	assert.Equal(t, newStatus.Message, firstStatus.Message)
 }
 
+func TestTerminatePodWaiting(t *testing.T) {
+	syncer := newTestManager(&fake.Clientset{})
+	testPod := getTestPod()
+	t.Logf("update the pod's status to Failed.  TerminatePod should preserve this status update.")
+	firstStatus := getRandomPodStatus()
+	firstStatus.Phase = v1.PodFailed
+	firstStatus.InitContainerStatuses = []v1.ContainerStatus{
+		{Name: "init-test-1"},
+		{Name: "init-test-2", State: v1.ContainerState{Terminated: &v1.ContainerStateTerminated{Reason: "InitTest", ExitCode: 0}}},
+		{Name: "init-test-3", State: v1.ContainerState{Waiting: &v1.ContainerStateWaiting{Reason: "InitTest"}}},
+	}
+	firstStatus.ContainerStatuses = []v1.ContainerStatus{
+		{Name: "test-1"},
+		{Name: "test-2", State: v1.ContainerState{Terminated: &v1.ContainerStateTerminated{Reason: "Test", ExitCode: 2}}},
+		{Name: "test-3", State: v1.ContainerState{Waiting: &v1.ContainerStateWaiting{Reason: "Test"}}},
+	}
+	syncer.SetPodStatus(testPod, firstStatus)
+
+	t.Logf("set the testPod to a pod with Phase running, to simulate a stale pod")
+	testPod.Status = getRandomPodStatus()
+	testPod.Status.Phase = v1.PodRunning
+
+	syncer.TerminatePod(testPod)
+
+	t.Logf("we expect the container statuses to have changed to terminated")
+	newStatus := expectPodStatus(t, syncer, testPod)
+	for i := range newStatus.ContainerStatuses {
+		assert.False(t, newStatus.ContainerStatuses[i].State.Terminated == nil, "expected containers to be terminated")
+	}
+	for i := range newStatus.InitContainerStatuses {
+		assert.False(t, newStatus.InitContainerStatuses[i].State.Terminated == nil, "expected init containers to be terminated")
+	}
+
+	expectUnknownState := v1.ContainerState{Terminated: &v1.ContainerStateTerminated{Reason: "ContainerStatusUnknown", Message: "The container could not be located when the pod was terminated", ExitCode: 137}}
+	if !reflect.DeepEqual(newStatus.InitContainerStatuses[0].State, expectUnknownState) {
+		t.Errorf("terminated container state not defaulted: %s", diff.ObjectReflectDiff(newStatus.InitContainerStatuses[0].State, expectUnknownState))
+	}
+	if !reflect.DeepEqual(newStatus.InitContainerStatuses[1].State, firstStatus.InitContainerStatuses[1].State) {
+		t.Errorf("existing terminated container state not preserved: %#v", newStatus.ContainerStatuses)
+	}
+	if !reflect.DeepEqual(newStatus.InitContainerStatuses[2].State, expectUnknownState) {
+		t.Errorf("waiting container state not defaulted: %s", diff.ObjectReflectDiff(newStatus.InitContainerStatuses[2].State, expectUnknownState))
+	}
+	if !reflect.DeepEqual(newStatus.ContainerStatuses[0].State, expectUnknownState) {
+		t.Errorf("terminated container state not defaulted: %s", diff.ObjectReflectDiff(newStatus.ContainerStatuses[0].State, expectUnknownState))
+	}
+	if !reflect.DeepEqual(newStatus.ContainerStatuses[1].State, firstStatus.ContainerStatuses[1].State) {
+		t.Errorf("existing terminated container state not preserved: %#v", newStatus.ContainerStatuses)
+	}
+	if !reflect.DeepEqual(newStatus.ContainerStatuses[2].State, expectUnknownState) {
+		t.Errorf("waiting container state not defaulted: %s", diff.ObjectReflectDiff(newStatus.ContainerStatuses[2].State, expectUnknownState))
+	}
+
+	t.Logf("we expect the previous status update to be preserved.")
+	assert.Equal(t, newStatus.Phase, firstStatus.Phase)
+	assert.Equal(t, newStatus.Message, firstStatus.Message)
+}
+
 func TestSetContainerReadiness(t *testing.T) {
 	cID1 := kubecontainer.ContainerID{Type: "test", ID: "1"}
 	cID2 := kubecontainer.ContainerID{Type: "test", ID: "2"}
diff --git a/test/e2e/node/pods.go b/test/e2e/node/pods.go
index 675dfbf3456..a4cf9f3bf5e 100644
--- a/test/e2e/node/pods.go
+++ b/test/e2e/node/pods.go
@@ -379,6 +379,8 @@ var _ = SIGDescribe("Pods Extended", func() {
 								switch {
 								case t.ExitCode == 1:
 									// expected
+								case t.ExitCode == 137 && (t.Reason == "ContainerStatusUnknown" || t.Reason == "Error"):
+									// expected, pod was force-killed after grace period
 								case t.ExitCode == 128 && (t.Reason == "StartError" || t.Reason == "ContainerCannotRun") && reBug88766.MatchString(t.Message):
 									// pod volume teardown races with container start in CRI, which reports a failure
 									framework.Logf("pod %s on node %s failed with the symptoms of https://github.com/kubernetes/kubernetes/issues/88766", pod.Name, pod.Spec.NodeName)
@@ -425,7 +427,7 @@ var _ = SIGDescribe("Pods Extended", func() {
 							if !hasTerminalPhase {
 								var names []string
 								for _, status := range pod.Status.ContainerStatuses {
-									if status.State.Terminated != nil || status.State.Running != nil {
+									if status.State.Running != nil {
 										names = append(names, status.Name)
 									}
 								}