diff --git a/.changeset/four-flies-hammer.md b/.changeset/four-flies-hammer.md
new file mode 100644
index 0000000000..b6d3770a4c
--- /dev/null
+++ b/.changeset/four-flies-hammer.md
@@ -0,0 +1,5 @@
+---
+'svelte': patch
+---
+
+fix: improve each block fallback handling
diff --git a/packages/svelte/src/internal/client/each.js b/packages/svelte/src/internal/client/each.js
index 0602d789f7..c37183d7bf 100644
--- a/packages/svelte/src/internal/client/each.js
+++ b/packages/svelte/src/internal/client/each.js
@@ -119,6 +119,14 @@ function each(anchor_node, collection, flags, key_fn, render_fn, fallback_fn, re
 		current_fallback = fallback;
 	};
 
+	/** @param {import('./types.js').EachBlock} block */
+	const clear_each = (block) => {
+		const flags = block.f;
+		const is_controlled = (flags & EACH_IS_CONTROLLED) !== 0;
+		const anchor_node = block.a;
+		reconcile_fn(array, block, anchor_node, is_controlled, render_fn, flags, true, keys);
+	};
+
 	const each = render_effect(
 		() => {
 			/** @type {V[]} */
@@ -137,7 +145,9 @@ function each(anchor_node, collection, flags, key_fn, render_fn, fallback_fn, re
 			if (fallback_fn !== null) {
 				if (length === 0) {
 					if (block.v.length !== 0 || render === null) {
+						clear_each(block);
 						create_fallback_effect();
+						return;
 					}
 				} else if (block.v.length === 0 && current_fallback !== null) {
 					const fallback = current_fallback;
@@ -160,17 +170,7 @@ function each(anchor_node, collection, flags, key_fn, render_fn, fallback_fn, re
 		false
 	);
 
-	render = render_effect(
-		/** @param {import('./types.js').EachBlock} block */
-		(block) => {
-			const flags = block.f;
-			const is_controlled = (flags & EACH_IS_CONTROLLED) !== 0;
-			const anchor_node = block.a;
-			reconcile_fn(array, block, anchor_node, is_controlled, render_fn, flags, true, keys);
-		},
-		block,
-		true
-	);
+	render = render_effect(clear_each, block, true);
 
 	push_destroy_fn(each, () => {
 		const flags = block.f;
diff --git a/packages/svelte/tests/runtime-runes/samples/each-fallback/_config.js b/packages/svelte/tests/runtime-runes/samples/each-fallback/_config.js
new file mode 100644
index 0000000000..183184e341
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/each-fallback/_config.js
@@ -0,0 +1,17 @@
+import { flushSync } from 'svelte';
+import { test } from '../../test';
+
+export default test({
+	async test({ assert, target, component }) {
+		const [b1] = target.querySelectorAll('button');
+		assert.htmlEqual(target.innerHTML, '<div>abc</div><button>Toggle</button>');
+		flushSync(() => {
+			b1.click();
+		});
+		assert.htmlEqual(target.innerHTML, '<div>Fallback</div><button>Toggle</button>');
+		flushSync(() => {
+			b1.click();
+		});
+		assert.htmlEqual(target.innerHTML, '<div>abc</div><button>Toggle</button>');
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/each-fallback/main.svelte b/packages/svelte/tests/runtime-runes/samples/each-fallback/main.svelte
new file mode 100644
index 0000000000..b0fcc9a86f
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/each-fallback/main.svelte
@@ -0,0 +1,22 @@
+<script>
+	let data = $state({a:1, b:2, c:3});
+	let filter = $state(false);
+
+	function toggle_filter(){
+		if(filter) {
+			filter = false;
+			data = {a:1, b:2, c:3};
+		} else {
+			filter = true;
+			data = {};
+		}
+	}
+</script>
+<div>
+	{#each Object.keys(data) as key}
+		{key}
+	{:else}
+		Fallback
+	{/each}
+</div>
+<button onclick={toggle_filter}>Toggle</button>