diff --git a/nomad/state/state_store.go b/nomad/state/state_store.go
index e9df612c82e..d9207333684 100644
--- a/nomad/state/state_store.go
+++ b/nomad/state/state_store.go
@@ -2037,6 +2037,7 @@ func (s *StateStore) upsertAllocsImpl(index uint64, allocs []*structs.Allocation
 			if existingPrevAlloc != nil {
 				prevAllocCopy := existingPrevAlloc.Copy()
 				prevAllocCopy.NextAllocation = alloc.ID
+				prevAllocCopy.ModifyIndex = index
 				if err := txn.Insert("allocs", prevAllocCopy); err != nil {
 					return fmt.Errorf("alloc insert failed: %v", err)
 				}
diff --git a/nomad/state/state_store_test.go b/nomad/state/state_store_test.go
index dd085bb9e4e..cf0841e4640 100644
--- a/nomad/state/state_store_test.go
+++ b/nomad/state/state_store_test.go
@@ -4653,6 +4653,15 @@ func TestStateStore_Allocs_PrevAlloc(t *testing.T) {
 
 	require.Equal(allocs, out)
 	require.False(watchFired(ws))
+
+	// Insert another alloc, verify index of previous alloc also got updated
+	alloc := mock.Alloc()
+	alloc.PreviousAllocation = allocs[0].ID
+	err = state.UpsertAllocs(1001, []*structs.Allocation{alloc})
+	require.Nil(err)
+	alloc0, err := state.AllocByID(nil, allocs[0].ID)
+	require.Nil(err)
+	require.Equal(alloc0.ModifyIndex, uint64(1001))
 }
 
 func TestStateStore_RestoreAlloc(t *testing.T) {