diff --git a/internal/mesh/internal/controllers/xds/controller.go b/internal/mesh/internal/controllers/xds/controller.go
index 5368efc48b595..604181a49e188 100644
--- a/internal/mesh/internal/controllers/xds/controller.go
+++ b/internal/mesh/internal/controllers/xds/controller.go
@@ -202,6 +202,9 @@ func (r *xdsReconciler) Reconcile(ctx context.Context, rt controller.Runtime, re
 
 	// Step 4: Track relationships between ProxyStateTemplates and ServiceEndpoints.
 	r.endpointsMapper.TrackItem(req.ID, endpointsInProxyStateTemplate)
+	if len(endpointsInProxyStateTemplate) == 0 {
+		r.endpointsMapper.UntrackItem(req.ID)
+	}
 
 	// Iterate through leaf certificate references.
 	// For each leaf certificate reference, the controller should: