diff --git a/src/system-health/health_checker/sysmonitor.py b/src/system-health/health_checker/sysmonitor.py
index 8979327eaf9..7a42768c3f9 100755
--- a/src/system-health/health_checker/sysmonitor.py
+++ b/src/system-health/health_checker/sysmonitor.py
@@ -405,7 +405,13 @@ def check_unit_status(self, event):
             #then it should be removed from STATE_DB & set
             if event in self.dnsrvs_name:
                 self.dnsrvs_name.remove(event)
-            
+
+            if len(self.dnsrvs_name) == 0:
+                astate = "UP"
+            else:
+                astate = "DOWN"
+            self.publish_system_status(astate)
+
             srv_name,last = event.split('.')
             # stop on service maybe propagated to timers and in that case,
             # the state_db entry for the service should not be deleted
diff --git a/src/system-health/tests/mock_connector.py b/src/system-health/tests/mock_connector.py
index 76ed01d2b9b..d6efdf62065 100644
--- a/src/system-health/tests/mock_connector.py
+++ b/src/system-health/tests/mock_connector.py
@@ -22,11 +22,14 @@ def keys(self, db_id, pattern):
 
     def get_all(self, db_id, key):
         return MockConnector.data[key]
-    
+
+    def exists(self, db_id, key):
+        return key in MockConnector.data
+
     def set(self, db_id, key, field, value):
         self.data[key] = {}
         self.data[key][field] = value
-    
+
     def hmset(self, db_id, key, fieldsvalues):
         self.data[key] = {}
         for field,value in fieldsvalues.items():
diff --git a/src/system-health/tests/test_system_health.py b/src/system-health/tests/test_system_health.py
index 034106fd188..cb3ce6ca092 100644
--- a/src/system-health/tests/test_system_health.py
+++ b/src/system-health/tests/test_system_health.py
@@ -654,6 +654,31 @@ def test_check_unit_status():
     assert 'mock_bgp.service' in sysmon.dnsrvs_name
 
 
+@patch('health_checker.sysmonitor.Sysmonitor.get_all_service_list', MagicMock(side_effect=[
+    ['mock_snmp.service', 'mock_bgp.service', 'mock_ns.service'],
+    ['mock_snmp.service', 'mock_ns.service']
+]))
+@patch('health_checker.sysmonitor.Sysmonitor.run_systemctl_show', MagicMock(return_value=mock_srv_props['mock_bgp.service']))
+@patch('health_checker.sysmonitor.Sysmonitor.get_app_ready_status', MagicMock(return_value=('Down','-','-')))
+@patch('health_checker.sysmonitor.Sysmonitor.post_unit_status', MagicMock())
+@patch('health_checker.sysmonitor.Sysmonitor.print_console_message', MagicMock())
+def test_system_status_up_after_service_removed():
+    sysmon = Sysmonitor()
+    sysmon.publish_system_status('UP')
+
+    sysmon.check_unit_status('mock_bgp.service')
+    assert 'mock_bgp.service' in sysmon.dnsrvs_name
+    result = swsscommon.SonicV2Connector.get(MockConnector, 0, "SYSTEM_READY|SYSTEM_STATE", 'Status')
+    print("system status result before service was removed from system: {}".format(result))
+    assert result == "DOWN"
+
+    sysmon.check_unit_status('mock_bgp.service')
+    assert 'mock_bgp.service' not in sysmon.dnsrvs_name
+    result = swsscommon.SonicV2Connector.get(MockConnector, 0, "SYSTEM_READY|SYSTEM_STATE", 'Status')
+    print("system status result after service was removed from system: {}".format(result))
+    assert result == "UP"
+
+
 @patch('health_checker.sysmonitor.Sysmonitor.get_all_service_list', MagicMock(return_value=['mock_snmp.service']))
 def test_check_unit_status_timer():
     sysmon = Sysmonitor()