diff --git a/northd/northd.c b/northd/northd.c
index 27cc8775c..63b6a73c8 100644
--- a/northd/northd.c
+++ b/northd/northd.c
@@ -3884,6 +3884,13 @@ ovn_lb_svc_create(struct ovsdb_idl_txn *ovnsb_txn, struct ovn_northd_lb *lb,
                     backend_nb->svc_mon_src_ip);
             }
 
+            if ((!op->sb->n_up || !op->sb->up[0])
+                && mon_info->sbrec_mon->status
+                && !strcmp(mon_info->sbrec_mon->status, "online")) {
+                sbrec_service_monitor_set_status(mon_info->sbrec_mon,
+                                                 "offline");
+            }
+
             backend_nb->sbrec_monitor = mon_info->sbrec_mon;
             mon_info->required = true;
         }
diff --git a/tests/ovn-northd.at b/tests/ovn-northd.at
index fe97bedad..812c60b53 100644
--- a/tests/ovn-northd.at
+++ b/tests/ovn-northd.at
@@ -1207,6 +1207,13 @@ ovn-nbctl ls-add sw1
 ovn-nbctl --wait=sb lsp-add sw1 sw1-p1 -- lsp-set-addresses sw1-p1 \
 "02:00:00:00:00:03 20.0.0.3"
 
+# service_monitors state online requires corresponding port_binding to be "up"
+ovn-sbctl chassis-add hv1 geneve 127.0.0.1
+ovn-sbctl lsp-bind sw0-p1 hv1
+ovn-sbctl lsp-bind sw1-p1 hv1
+wait_row_count nb:Logical_Switch_Port 1 name=sw0-p1 'up=true'
+wait_row_count nb:Logical_Switch_Port 1 name=sw1-p1 'up=true'
+
 wait_row_count Service_Monitor 0
 
 ovn-nbctl --wait=sb set load_balancer . ip_port_mappings:10.0.0.3=sw0-p1:10.0.0.2
@@ -1220,7 +1227,7 @@ check ovn-nbctl --wait=sb ls-lb-add sw0 lb1
 AT_CAPTURE_FILE([sbflows])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows | grep 'priority=120.*backends' | sed 's/table=..//'], 0, [dnl
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
 ])
 
 AS_BOX([Delete the Load_Balancer_Health_Check])
@@ -1230,7 +1237,7 @@ wait_row_count Service_Monitor 0
 AT_CAPTURE_FILE([sbflows2])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows2 | grep 'priority=120.*backends' | sed 's/table=..//'], [0],
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
 ])
 
 AS_BOX([Create the Load_Balancer_Health_Check again.])
@@ -1242,7 +1249,7 @@ check ovn-nbctl --wait=sb sync
 
 ovn-sbctl dump-flows sw0 | grep backends | grep priority=120 > lflows.txt
 AT_CHECK([cat lflows.txt | sed 's/table=..//'], [0], [dnl
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
 ])
 
 AS_BOX([Get the uuid of both the service_monitor])
@@ -1252,7 +1259,7 @@ sm_sw1_p1=$(fetch_column Service_Monitor _uuid logical_port=sw1-p1)
 AT_CAPTURE_FILE([sbflows3])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows 3 | grep 'priority=120.*backends' | sed 's/table=..//'], [0],
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
 ])
 
 AS_BOX([Set the service monitor for sw1-p1 to offline])
@@ -1263,7 +1270,7 @@ check ovn-nbctl --wait=sb sync
 AT_CAPTURE_FILE([sbflows4])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows4 | grep 'priority=120.*backends' | sed 's/table=..//'], [0],
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80);)
 ])
 
 AS_BOX([Set the service monitor for sw0-p1 to offline])
@@ -1292,7 +1299,7 @@ check ovn-nbctl --wait=sb sync
 AT_CAPTURE_FILE([sbflows7])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows7 | grep backends | grep priority=120 | sed 's/table=..//'], 0,
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
 ])
 
 AS_BOX([Set the service monitor for sw1-p1 to error])
@@ -1303,7 +1310,7 @@ check ovn-nbctl --wait=sb sync
 ovn-sbctl dump-flows sw0 | grep "ip4.dst == 10.0.0.10 && tcp.dst == 80" \
 | grep priority=120 > lflows.txt
 AT_CHECK([cat lflows.txt | sed 's/table=..//'], [0], [dnl
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80);)
 ])
 
 AS_BOX([Add one more vip to lb1])
@@ -1329,8 +1336,8 @@ AT_CAPTURE_FILE([sbflows9])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows9 | grep backends | grep priority=120 | sed 's/table=..//' | sort],
   0,
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80);)
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb_mark(backends=10.0.0.3:1000);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb(backends=10.0.0.3:1000);)
 ])
 
 AS_BOX([Set the service monitor for sw1-p1 to online])
@@ -1343,8 +1350,8 @@ AT_CAPTURE_FILE([sbflows10])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw0 | tee sbflows10 | grep backends | grep priority=120 | sed 's/table=..//' | sort],
   0,
-[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb_mark(backends=10.0.0.3:1000,20.0.0.3:80);)
+[  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb(backends=10.0.0.3:1000,20.0.0.3:80);)
 ])
 
 AS_BOX([Associate lb1 to sw1])
@@ -1353,8 +1360,8 @@ AT_CAPTURE_FILE([sbflows11])
 OVS_WAIT_FOR_OUTPUT(
   [ovn-sbctl dump-flows sw1 | tee sbflows11 | grep backends | grep priority=120 | sed 's/table=..//' | sort],
   0, [dnl
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb_mark(backends=10.0.0.3:80,20.0.0.3:80);)
-  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb_mark(backends=10.0.0.3:1000,20.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.10 && tcp.dst == 80), action=(reg0[[1]] = 0; reg1 = 10.0.0.10; reg2[[0..15]] = 80; ct_lb(backends=10.0.0.3:80,20.0.0.3:80);)
+  (ls_in_lb           ), priority=120  , match=(ct.new && ip4.dst == 10.0.0.40 && tcp.dst == 1000), action=(reg0[[1]] = 0; reg1 = 10.0.0.40; reg2[[0..15]] = 1000; ct_lb(backends=10.0.0.3:1000,20.0.0.3:80);)
 ])
 
 AS_BOX([Now create lb2 same as lb1 but udp protocol.])
diff --git a/tests/system-ovn.at b/tests/system-ovn.at
index df2da3408..1cabf1f31 100644
--- a/tests/system-ovn.at
+++ b/tests/system-ovn.at
@@ -4441,7 +4441,7 @@ tcp,orig=(src=10.0.0.4,dst=10.0.0.10,sport=<cleared>,dport=<cleared>),reply=(src
 tcp,orig=(src=10.0.0.4,dst=10.0.0.10,sport=<cleared>,dport=<cleared>),reply=(src=20.0.0.3,dst=10.0.0.4,sport=<cleared>,dport=<cleared>),zone=<cleared>,mark=2,protoinfo=(state=<cleared>)
 ])
 
-# Stop webserer in sw0-p1
+# Stop webserver in sw0-p1
 kill `cat $sw0_p1_pid_file`
 
 # Wait until service_monitor for sw0-p1 is set to offline
@@ -4465,6 +4465,15 @@ sed -e 's/zone=[[0-9]]*/zone=<cleared>/'], [0], [dnl
 tcp,orig=(src=10.0.0.4,dst=10.0.0.10,sport=<cleared>,dport=<cleared>),reply=(src=20.0.0.3,dst=10.0.0.4,sport=<cleared>,dport=<cleared>),zone=<cleared>,mark=2,protoinfo=(state=<cleared>)
 ])
 
+# trigger port binding release and check if status changed to offline
+ovs-vsctl remove interface ovs-sw1-p1 external_ids iface-id
+wait_row_count Service_Monitor 2
+wait_row_count Service_Monitor 2 status=offline
+
+ovs-vsctl set interface ovs-sw1-p1 external_ids:iface-id=sw1-p1
+wait_row_count Service_Monitor 2
+wait_row_count Service_Monitor 1 status=online
+
 # Create udp load balancer.
 ovn-nbctl lb-add lb2 10.0.0.10:80 10.0.0.3:80,20.0.0.3:80 udp
 lb_udp=`ovn-nbctl lb-list | grep udp | awk '{print $1}'`
