diff --git a/.changeset/open-keys-create.md b/.changeset/open-keys-create.md
new file mode 100644
index 0000000000..bb2ef8260c
--- /dev/null
+++ b/.changeset/open-keys-create.md
@@ -0,0 +1,5 @@
+---
+'@tanstack/query-core': patch
+---
+
+Fix: Always treat existing data as stale when query goes into error state.
diff --git a/packages/query-core/src/__tests__/queryObserver.test.tsx b/packages/query-core/src/__tests__/queryObserver.test.tsx
index c1ddefbfa5..57f8040864 100644
--- a/packages/query-core/src/__tests__/queryObserver.test.tsx
+++ b/packages/query-core/src/__tests__/queryObserver.test.tsx
@@ -1394,6 +1394,87 @@ describe('queryObserver', () => {
     unsubscribe()
   })
 
+  test('should not refetchOnWindowFocus when staleTime is static and query has background error', async () => {
+    const key = queryKey()
+    let callCount = 0
+    const queryFn = vi.fn(async () => {
+      callCount++
+      if (callCount === 1) {
+        return 'data'
+      }
+      throw new Error('background error')
+    })
+
+    const observer = new QueryObserver(queryClient, {
+      queryKey: key,
+      queryFn,
+      staleTime: 'static',
+      refetchOnWindowFocus: true,
+      retry: false,
+    })
+
+    const unsubscribe = observer.subscribe(() => undefined)
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(1)
+    expect(observer.getCurrentResult().data).toBe('data')
+    expect(observer.getCurrentResult().status).toBe('success')
+
+    await observer.refetch()
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(2)
+    expect(observer.getCurrentResult().status).toBe('error')
+    expect(observer.getCurrentResult().data).toBe('data')
+
+    focusManager.setFocused(false)
+    focusManager.setFocused(true)
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(2)
+
+    unsubscribe()
+  })
+
+  test('should refetchOnWindowFocus when query has background error and staleTime is not static', async () => {
+    const key = queryKey()
+    let callCount = 0
+    const queryFn = vi.fn(async () => {
+      callCount++
+      if (callCount === 1) {
+        return 'data'
+      }
+      if (callCount === 2) {
+        throw new Error('background error')
+      }
+      return 'new data'
+    })
+
+    const observer = new QueryObserver(queryClient, {
+      queryKey: key,
+      queryFn,
+      staleTime: 1000,
+      refetchOnWindowFocus: true,
+      retry: false,
+    })
+
+    const unsubscribe = observer.subscribe(() => undefined)
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(1)
+    expect(observer.getCurrentResult().data).toBe('data')
+    expect(observer.getCurrentResult().status).toBe('success')
+
+    await observer.refetch()
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(2)
+    expect(observer.getCurrentResult().status).toBe('error')
+    expect(observer.getCurrentResult().data).toBe('data')
+
+    focusManager.setFocused(false)
+    focusManager.setFocused(true)
+    await vi.advanceTimersByTimeAsync(0)
+    expect(queryFn).toHaveBeenCalledTimes(3)
+
+    unsubscribe()
+  })
+
   test('should set fetchStatus to idle when _optimisticResults is isRestoring', () => {
     const key = queryKey()
     const observer = new QueryObserver(queryClient, {
diff --git a/packages/query-core/src/query.ts b/packages/query-core/src/query.ts
index 6895c156db..6005bda0d3 100644
--- a/packages/query-core/src/query.ts
+++ b/packages/query-core/src/query.ts
@@ -658,6 +658,9 @@ export class Query<
             fetchFailureReason: error,
             fetchStatus: 'idle',
             status: 'error',
+            // flag existing data as invalidated if we get a background error
+            // note that "no data" always means stale so we can set unconditionally here
+            isInvalidated: true,
           }
         case 'invalidate':
           return {
diff --git a/packages/react-query/src/__tests__/issue-9728.test.tsx b/packages/react-query/src/__tests__/issue-9728.test.tsx
new file mode 100644
index 0000000000..44f3241cc8
--- /dev/null
+++ b/packages/react-query/src/__tests__/issue-9728.test.tsx
@@ -0,0 +1,108 @@
+// @vitest-environment jsdom
+import { describe, expect, it, vi } from 'vitest'
+import { fireEvent, render } from '@testing-library/react'
+import * as React from 'react'
+import { ErrorBoundary } from 'react-error-boundary'
+import { queryKey } from '@tanstack/query-test-utils'
+import {
+  QueryClient,
+  QueryClientProvider,
+  QueryErrorResetBoundary,
+  useQuery,
+} from '..'
+
+describe('issue 9728', () => {
+  it('should refetch after error when staleTime is Infinity and previous data exists', async () => {
+    const key = queryKey()
+    const queryFn = vi.fn()
+    let count = 0
+
+    queryFn.mockImplementation(async () => {
+      count++
+      if (count === 2) {
+        throw new Error('Error ' + count)
+      }
+      return 'Success ' + count
+    })
+
+    const queryClient = new QueryClient({
+      defaultOptions: {
+        queries: {
+          retry: false,
+          staleTime: Infinity,
+        },
+      },
+    })
+
+    function Page() {
+      const [_, forceUpdate] = React.useState(0)
+
+      React.useEffect(() => {
+        forceUpdate(1)
+      }, [])
+
+      const { data, refetch } = useQuery({
+        queryKey: key,
+        queryFn,
+        throwOnError: true,
+      })
+
+      return (
+        <div>
+          <div>Data: {data}</div>
+          <button onClick={() => refetch()}>Refetch</button>
+        </div>
+      )
+    }
+
+    function App() {
+      return (
+        <QueryErrorResetBoundary>
+          {({ reset }) => (
+            <ErrorBoundary
+              onReset={reset}
+              fallbackRender={({ resetErrorBoundary }) => (
+                <div>
+                  <div>Status: error</div>
+                  <button onClick={resetErrorBoundary}>Retry</button>
+                </div>
+              )}
+            >
+              <React.Suspense fallback={<div>Loading...</div>}>
+                <Page />
+              </React.Suspense>
+            </ErrorBoundary>
+          )}
+        </QueryErrorResetBoundary>
+      )
+    }
+
+    const { getByText, findByText } = render(
+      <React.StrictMode>
+        <QueryClientProvider client={queryClient}>
+          <App />
+        </QueryClientProvider>
+      </React.StrictMode>,
+    )
+
+    // 1. First mount -> Success
+    await findByText('Data: Success 1')
+    expect(queryFn).toHaveBeenCalledTimes(1)
+
+    // 2. Click Refetch -> Triggers fetch -> Fails (Error 2) -> ErrorBoundary
+    fireEvent.click(getByText('Refetch'))
+
+    // Wait for error UI
+    await findByText('Status: error')
+    expect(queryFn).toHaveBeenCalledTimes(2)
+
+    // 3. Click Retry -> Remounts
+    // Because staleTime is Infinity and we have Data from (1),
+    // AND we are in Error state.
+    fireEvent.click(getByText('Retry'))
+
+    // Should call queryFn again (3rd time) and succeed
+    await findByText('Data: Success 3')
+    expect(queryFn).toHaveBeenCalledTimes(3)
+  })
+})