diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index 1459df2947..13efb33eb7 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -8,6 +8,8 @@
 
 ### Bundles
 
+ * direct: Cluster resize now falls back to regular update if resize fails due to `INVALID_STATE` ([#5716](https://github.com/databricks/cli/pull/5716)).
+
 ### Dependency updates
 
 ### API Changes
diff --git a/acceptance/bundle/resources/clusters/resize-terminated-fallback/databricks.yml.tmpl b/acceptance/bundle/resources/clusters/resize-terminated-fallback/databricks.yml.tmpl
new file mode 100644
index 0000000000..ff3fa1211a
--- /dev/null
+++ b/acceptance/bundle/resources/clusters/resize-terminated-fallback/databricks.yml.tmpl
@@ -0,0 +1,14 @@
+bundle:
+  name: test-bundle
+
+workspace:
+  root_path: ~/.bundle/$UNIQUE_NAME
+
+resources:
+  clusters:
+    test_cluster:
+      cluster_name: test-cluster-$UNIQUE_NAME
+      spark_version: $DEFAULT_SPARK_VERSION
+      node_type_id: $NODE_TYPE_ID
+      instance_pool_id: $TEST_INSTANCE_POOL_ID
+      num_workers: 2
diff --git a/acceptance/bundle/resources/clusters/resize-terminated-fallback/out.test.toml b/acceptance/bundle/resources/clusters/resize-terminated-fallback/out.test.toml
new file mode 100644
index 0000000000..9cfad3fb0d
--- /dev/null
+++ b/acceptance/bundle/resources/clusters/resize-terminated-fallback/out.test.toml
@@ -0,0 +1,3 @@
+Local = true
+Cloud = true
+EnvMatrix.DATABRICKS_BUNDLE_ENGINE = ["direct"]
diff --git a/acceptance/bundle/resources/clusters/resize-terminated-fallback/output.txt b/acceptance/bundle/resources/clusters/resize-terminated-fallback/output.txt
new file mode 100644
index 0000000000..61c620e223
--- /dev/null
+++ b/acceptance/bundle/resources/clusters/resize-terminated-fallback/output.txt
@@ -0,0 +1,66 @@
+
+>>> [CLI] bundle deploy
+Uploading bundle files to /Workspace/Users/[USERNAME]/.bundle/[UNIQUE_NAME]/files...
+Deploying resources...
+Updating deployment state...
+Deployment complete!
+
+=== Create a plan while cluster is running: should show resize
+
+>>> [CLI] bundle plan -o json
+
+=== Terminate the cluster before applying the saved plan
+
+>>> [CLI] clusters get [CLUSTER_ID]
+{
+  "cluster_name": "test-cluster-[UNIQUE_NAME]",
+  "num_workers": 2,
+  "state": "TERMINATED"
+}
+
+=== Apply saved plan: resize fails with INVALID_STATE, falls back to edit
+
+>>> [CLI] bundle deploy --plan plan.json
+Uploading bundle files to /Workspace/Users/[USERNAME]/.bundle/[UNIQUE_NAME]/files...
+Deploying resources...
+Updating deployment state...
+Deployment complete!
+
+>>> print_requests.py //clusters/resize //clusters/edit
+{
+  "method": "POST",
+  "path": "/api/2.1/clusters/resize",
+  "body": {
+    "cluster_id": "[CLUSTER_ID]",
+    "num_workers": 3
+  }
+}
+{
+  "method": "POST",
+  "path": "/api/2.1/clusters/edit",
+  "body": {
+    "autotermination_minutes": 60,
+    "cluster_id": "[CLUSTER_ID]",
+    "cluster_name": "test-cluster-[UNIQUE_NAME]",
+    "instance_pool_id": "[TEST_INSTANCE_POOL_ID]",
+    "num_workers": 3,
+    "spark_version": "13.3.x-snapshot-scala2.12"
+  }
+}
+
+=== Cluster should have new num_workers
+
+>>> [CLI] clusters get [CLUSTER_ID]
+{
+  "cluster_name": "test-cluster-[UNIQUE_NAME]",
+  "num_workers": 3
+}
+
+>>> [CLI] bundle destroy --auto-approve
+The following resources will be deleted:
+  delete resources.clusters.test_cluster
+
+All files and directories at the following location will be deleted: /Workspace/Users/[USERNAME]/.bundle/[UNIQUE_NAME]
+
+Deleting files...
+Destroy complete!
diff --git a/acceptance/bundle/resources/clusters/resize-terminated-fallback/script b/acceptance/bundle/resources/clusters/resize-terminated-fallback/script
new file mode 100644
index 0000000000..258d8e8d37
--- /dev/null
+++ b/acceptance/bundle/resources/clusters/resize-terminated-fallback/script
@@ -0,0 +1,27 @@
+envsubst < databricks.yml.tmpl > databricks.yml
+
+cleanup() {
+    trace $CLI bundle destroy --auto-approve
+    rm -f out.requests.txt
+}
+trap cleanup EXIT
+
+trace $CLI bundle deploy
+
+CLUSTER_ID=$($CLI bundle summary -o json | jq -r '.resources.clusters.test_cluster.id')
+echo "$CLUSTER_ID:CLUSTER_ID" >> ACC_REPLS
+
+title "Create a plan while cluster is running: should show resize\n"
+update_file.py databricks.yml "num_workers: 2" "num_workers: 3"
+trace $CLI bundle plan -o json > plan.json
+
+title "Terminate the cluster before applying the saved plan\n"
+$CLI clusters delete "$CLUSTER_ID" > /dev/null
+trace $CLI clusters get "$CLUSTER_ID" | jq '{cluster_name,num_workers,state}'
+
+title "Apply saved plan: resize fails with INVALID_STATE, falls back to edit\n"
+trace $CLI bundle deploy --plan plan.json
+trace print_requests.py //clusters/resize //clusters/edit
+
+title "Cluster should have new num_workers\n"
+trace $CLI clusters get "$CLUSTER_ID" | jq '{cluster_name,num_workers}'
diff --git a/acceptance/bundle/resources/clusters/resize-terminated-fallback/test.toml b/acceptance/bundle/resources/clusters/resize-terminated-fallback/test.toml
new file mode 100644
index 0000000000..3d30b20670
--- /dev/null
+++ b/acceptance/bundle/resources/clusters/resize-terminated-fallback/test.toml
@@ -0,0 +1,8 @@
+Local = true
+Cloud = true
+RecordRequests = true
+
+Ignore = [".databricks", "databricks.yml", "plan.json"]
+
+[EnvMatrix]
+  DATABRICKS_BUNDLE_ENGINE = ["direct"]
diff --git a/bundle/direct/apply.go b/bundle/direct/apply.go
index 7b6d2b3f05..d227d7f564 100644
--- a/bundle/direct/apply.go
+++ b/bundle/direct/apply.go
@@ -44,7 +44,7 @@ func (d *DeploymentUnit) Deploy(ctx context.Context, db *dstate.DeploymentState,
 	case deployplan.UpdateWithID:
 		return d.UpdateWithID(ctx, db, oldID, newState)
 	case deployplan.Resize:
-		return d.Resize(ctx, db, oldID, newState)
+		return d.Resize(ctx, db, oldID, newState, planEntry)
 	default:
 		return fmt.Errorf("internal error: unexpected actionType: %#v", actionType)
 	}
@@ -246,8 +246,8 @@ func (d *DeploymentUnit) Delete(ctx context.Context, db *dstate.DeploymentState,
 	return nil
 }
 
-func (d *DeploymentUnit) Resize(ctx context.Context, db *dstate.DeploymentState, id string, newState any) error {
-	err := retryOnTransientErr(ctx, func() error { return d.Adapter.DoResize(ctx, id, newState) })
+func (d *DeploymentUnit) Resize(ctx context.Context, db *dstate.DeploymentState, id string, newState any, entry *deployplan.PlanEntry) error {
+	err := retryOnTransientErr(ctx, func() error { return d.Adapter.DoResize(ctx, id, newState, entry) })
 	if err != nil {
 		return fmt.Errorf("resizing id=%s: %w", id, err)
 	}
diff --git a/bundle/direct/dresources/adapter.go b/bundle/direct/dresources/adapter.go
index e38bb61107..70a9f1f5e3 100644
--- a/bundle/direct/dresources/adapter.go
+++ b/bundle/direct/dresources/adapter.go
@@ -65,7 +65,7 @@ type IResource interface {
 	DoUpdateWithID(ctx context.Context, id string, newState any) (newID string, remoteState any, e error)
 
 	// [Optional] DoResize resizes the resource. Only supported by clusters
-	DoResize(ctx context.Context, id string, newState any) error
+	DoResize(ctx context.Context, id string, newState any, entry *PlanEntry) error
 
 	// [Optional] WaitAfterCreate waits for the resource to become ready after creation. Returns optionally updated remote state.
 	// TODO: wait status should be persisted in the state.
@@ -494,12 +494,12 @@ func (a *Adapter) DoUpdateWithID(ctx context.Context, oldID string, newState any
 	return id, remoteState, nil
 }
 
-func (a *Adapter) DoResize(ctx context.Context, id string, newState any) error {
+func (a *Adapter) DoResize(ctx context.Context, id string, newState any, entry *PlanEntry) error {
 	if a.doResize == nil {
 		return errors.New("internal error: DoResize not found")
 	}
 
-	_, err := a.doResize.Call(ctx, id, newState)
+	_, err := a.doResize.Call(ctx, id, newState, entry)
 	return err
 }
 
diff --git a/bundle/direct/dresources/cluster.go b/bundle/direct/dresources/cluster.go
index b41de45301..6ded283c9f 100644
--- a/bundle/direct/dresources/cluster.go
+++ b/bundle/direct/dresources/cluster.go
@@ -8,6 +8,7 @@ import (
 
 	"github.com/databricks/cli/bundle/config/resources"
 	"github.com/databricks/cli/bundle/deployplan"
+	"github.com/databricks/cli/libs/log"
 	"github.com/databricks/cli/libs/structs/structpath"
 	"github.com/databricks/cli/libs/utils"
 	"github.com/databricks/databricks-sdk-go"
@@ -241,13 +242,25 @@ func (r *ResourceCluster) WaitAfterCreate(ctx context.Context, id string, config
 	return nil, nil
 }
 
-func (r *ResourceCluster) DoResize(ctx context.Context, id string, config *ClusterState) error {
+func (r *ResourceCluster) DoResize(ctx context.Context, id string, config *ClusterState, entry *PlanEntry) error {
 	_, err := r.client.Clusters.Resize(ctx, compute.ResizeCluster{
 		ClusterId:       id,
 		NumWorkers:      config.NumWorkers,
 		Autoscale:       config.Autoscale,
 		ForceSendFields: utils.FilterFields[compute.ResizeCluster](config.ForceSendFields),
 	})
+	if err == nil {
+		return nil
+	}
+
+	apiErr, ok := errors.AsType[*apierr.APIError](err)
+	if !ok || apiErr.ErrorCode != "INVALID_STATE" {
+		return err
+	}
+
+	// Cluster is not running; fall back to the full clusters/edit path.
+	log.Debugf(ctx, "cluster %s: resize returned INVALID_STATE (%s), falling back to edit", id, err)
+	_, err = r.DoUpdate(ctx, id, config, entry)
 	return err
 }
 
diff --git a/libs/testserver/clusters.go b/libs/testserver/clusters.go
index b6e1c6c171..178c240a9e 100644
--- a/libs/testserver/clusters.go
+++ b/libs/testserver/clusters.go
@@ -58,6 +58,14 @@ func (s *FakeWorkspace) ClustersResize(req Request) any {
 		return Response{StatusCode: 404}
 	}
 
+	// Only running clusters can be resized; match the real API behavior.
+	if cluster.State != compute.StateRunning {
+		return Response{
+			StatusCode: 400,
+			Body:       map[string]string{"error_code": "INVALID_STATE", "message": "Cluster is not running"},
+		}
+	}
+
 	cluster.NumWorkers = request.NumWorkers
 	cluster.Autoscale = request.Autoscale
 	s.Clusters[request.ClusterId] = cluster