diff --git a/CHANGELOG.md b/CHANGELOG.md
index 46c862ca5..8c10852b9 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 ### Fixes
 
 - Undo the removal of spark.sql.sources.partitionOverwriteMode = DYNAMIC ([688](https://github.com/databricks/dbt-databricks/pull/688))
+- Set spark.sql.sources.partitionOverwriteMode = STATIC on --full-refresh to ensure existing rows are removed ([697](https://github.com/databricks/dbt-databricks/pull/697))
 - Migrate to using system.information_schema to fix issue with catalog renames ([692](https://github.com/databricks/dbt-databricks/pull/692))
 - Cancel python jobs when dbt operation is canceled (thanks @gaoshihang for kicking this off!) ([693](https://github.com/databricks/dbt-databricks/pull/693))
 
diff --git a/dbt/include/databricks/macros/materializations/incremental/incremental.sql b/dbt/include/databricks/macros/materializations/incremental/incremental.sql
index 05f00a83e..46db1fbdd 100644
--- a/dbt/include/databricks/macros/materializations/incremental/incremental.sql
+++ b/dbt/include/databricks/macros/materializations/incremental/incremental.sql
@@ -20,10 +20,10 @@
   {%- set existing_relation = adapter.get_relation(database=this.database, schema=this.schema, identifier=this.identifier, needs_information=True) -%}
 
 
-  {#-- Set Overwrite Mode - does not yet work for warehouses --#}
-  {%- if incremental_strategy == 'insert_overwrite' and partition_by -%}
+  {#-- Set Overwrite Mode to STATIC for initial replace --#}
+  {%- if incremental_strategy == 'insert_overwrite' and should_full_refresh() -%}
     {%- call statement() -%}
-      set spark.sql.sources.partitionOverwriteMode = DYNAMIC
+      set spark.sql.sources.partitionOverwriteMode = STATIC
     {%- endcall -%}
   {%- endif -%}
 
@@ -53,6 +53,12 @@
     {% endif %}
     {% do apply_tags(target_relation, tags) %}
   {%- else -%}
+    {#-- Set Overwrite Mode to DYNAMIC for subsequent incremental operations --#}
+    {%- if incremental_strategy == 'insert_overwrite' and partition_by -%}
+      {%- call statement() -%}
+        set spark.sql.sources.partitionOverwriteMode = DYNAMIC
+      {%- endcall -%}
+    {%- endif -%}
     {#-- Relation must be merged --#}
     {%- set _existing_config = adapter.get_relation_config(existing_relation) -%}
     {%- set model_config = adapter.get_config_from_model(config.model) -%}
diff --git a/tests/conftest.py b/tests/conftest.py
index b8a0e0775..a6b572116 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -7,7 +7,7 @@
 
 
 def pytest_addoption(parser):
-    parser.addoption("--profile", action="store", default="databricks_uc_sql_endpoint", type=str)
+    parser.addoption("--profile", action="store", default="databricks_uc_cluster", type=str)
 
 
 # Using @pytest.mark.skip_profile('databricks_cluster') uses the 'skip_by_adapter_type'
diff --git a/tests/functional/adapter/incremental/fixtures.py b/tests/functional/adapter/incremental/fixtures.py
index f6b418d3a..0068d97b2 100644
--- a/tests/functional/adapter/incremental/fixtures.py
+++ b/tests/functional/adapter/incremental/fixtures.py
@@ -328,3 +328,30 @@ def model(dbt, spark):
       liquid_clustered_by: test2
       http_path: "{{ env_var('DBT_DATABRICKS_UC_CLUSTER_HTTP_PATH') }}"
 """
+
+replace_table = """
+{{ config(
+    materialized = 'table'
+) }}
+
+select cast(1 as bigint) as id, 'hello' as msg, 'blue' as color
+union all
+select cast(2 as bigint) as id, 'goodbye' as msg, 'red' as color
+"""
+
+replace_incremental = """
+{{ config(
+    materialized = 'incremental',
+    incremental_strategy = 'insert_overwrite',
+    partition_by = 'id'
+) }}
+
+select cast(1 as bigint) as id, 'hello' as msg, 'blue' as color
+union all
+select cast(2 as bigint) as id, 'goodbye' as msg, 'red' as color
+"""
+
+replace_expected = """id,msg,color
+1,hello,blue
+2,goodbye,red
+"""
diff --git a/tests/functional/adapter/incremental/test_incremental_replace_table.py b/tests/functional/adapter/incremental/test_incremental_replace_table.py
new file mode 100644
index 000000000..ec7f351a8
--- /dev/null
+++ b/tests/functional/adapter/incremental/test_incremental_replace_table.py
@@ -0,0 +1,21 @@
+import pytest
+from dbt.tests import util
+from tests.functional.adapter.incremental import fixtures
+
+
+@pytest.mark.skip_profile("databricks_cluster", "databricks_uc_sql_endpoint")
+class TestIncrementalReplaceTable:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {"model.sql": fixtures.replace_table}
+
+    @pytest.fixture(scope="class")
+    def seeds(self):
+        return {"seed.csv": fixtures.replace_expected}
+
+    # Validate that when we replace an existing table, no extra partitions are left behind
+    def test_replace(self, project):
+        util.run_dbt(["build"])
+        util.write_file(fixtures.replace_incremental, "models", "model.sql")
+        util.run_dbt(["run", "--full-refresh"])
+        util.check_relations_equal(project.adapter, ["model", "seed"])