diff --git a/controllers/atlasmigration_controller.go b/controllers/atlasmigration_controller.go
index 1af381f6..feed578f 100644
--- a/controllers/atlasmigration_controller.go
+++ b/controllers/atlasmigration_controller.go
@@ -83,6 +83,7 @@ type (
 		URL             *url.URL
 		DevURL          string
 		Dir             migrate.Dir
+		DirLatest       migrate.Dir
 		Cloud           *cloud
 		RevisionsSchema string
 		Baseline        string
@@ -219,7 +220,7 @@ func (r *AtlasMigrationReconciler) readDirState(ctx context.Context, obj client.
 		},
 	}
 	if err := r.Get(ctx, client.ObjectKeyFromObject(secret), secret); err != nil {
-		return nil, err
+		return nil, client.IgnoreNotFound(err)
 	}
 	return extractDirFromSecret(secret)
 }
@@ -330,9 +331,21 @@ func (r *AtlasMigrationReconciler) reconcile(ctx context.Context, wd *atlas.Work
 			}
 			// Atlas needs all versions to be present in the directory
 			// to downgrade to a specific version.
-			if c := data.Cloud; c != nil && c.RemoteDir != nil {
+			switch {
+			case data.Cloud != nil && data.Cloud.RemoteDir != nil:
 				// Use the `latest` tag of the remote directory to fetch all versions.
-				params.DirURL = fmt.Sprintf("atlas://%s", c.RemoteDir.Name)
+				params.DirURL = fmt.Sprintf("atlas://%s", data.Cloud.RemoteDir.Name)
+			case data.DirLatest != nil:
+				// Copy the dir-state from latest deployment to the different location
+				// (to avoid the conflict with the current migration directory)
+				// then use it to downgrade.
+				current := fmt.Sprintf("migrations-%s", status.Current)
+				if err = wd.CopyFS(current, data.DirLatest); err != nil {
+					return nil, err
+				}
+				params.DirURL = fmt.Sprintf("file://%s", current)
+			default:
+				return nil, fmt.Errorf("unable to downgrade, no dir-state found")
 			}
 			run, err := c.MigrateDown(ctx, params)
 			if err != nil {
@@ -439,11 +452,19 @@ func (r *AtlasMigrationReconciler) extractData(ctx context.Context, res *dbv1alp
 		if err != nil {
 			return nil, err
 		}
+		data.DirLatest, err = r.readDirState(ctx, res)
+		if err != nil {
+			return nil, err
+		}
 	case d.Local != nil:
 		data.Dir, err = memDir(d.Local)
 		if err != nil {
 			return nil, err
 		}
+		data.DirLatest, err = r.readDirState(ctx, res)
+		if err != nil {
+			return nil, err
+		}
 	default:
 		return nil, errors.New("no directory specified")
 	}