diff --git a/packages/transaction-pay-controller/CHANGELOG.md b/packages/transaction-pay-controller/CHANGELOG.md
index d089f19cda1..b5faa90c035 100644
--- a/packages/transaction-pay-controller/CHANGELOG.md
+++ b/packages/transaction-pay-controller/CHANGELOG.md
@@ -10,6 +10,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Fixed
 
 - Resolve correct `networkClientId` for source chain in Relay execute flow ([#8492](https://github.com/MetaMask/core/pull/8492))
+- Stop double-counting subsidized fees in Relay quote target amounts ([#8488](https://github.com/MetaMask/core/pull/8488))
 
 ## [19.2.0]
 
diff --git a/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.test.ts b/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.test.ts
index a264d75a73e..4432974b027 100644
--- a/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.test.ts
+++ b/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.test.ts
@@ -1779,6 +1779,36 @@ describe('Relay Quotes Utils', () => {
       });
     });
 
+    it('uses amountFormatted for subsidized fee when fee token is a stablecoin', async () => {
+      const quoteMock = cloneDeep(QUOTE_MOCK);
+      quoteMock.fees.subsidized = {
+        amount: '500000',
+        amountFormatted: '0.50',
+        amountUsd: '0.49',
+        currency: {
+          address: '0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48' as Hex,
+          chainId: 1,
+          decimals: 6,
+        },
+        minimumAmount: '500000',
+      };
+
+      successfulFetchMock.mockResolvedValue({
+        json: async () => quoteMock,
+      } as never);
+
+      const result = await getRelayQuotes({
+        messenger,
+        requests: [QUOTE_REQUEST_MOCK],
+        transaction: TRANSACTION_META_MOCK,
+      });
+
+      expect(result[0].fees.provider).toStrictEqual({
+        usd: '0',
+        fiat: '0',
+      });
+    });
+
     it('includes dust in quote', async () => {
       successfulFetchMock.mockResolvedValue({
         json: async () => QUOTE_MOCK,
@@ -2402,7 +2432,7 @@ describe('Relay Quotes Utils', () => {
       });
     });
 
-    it('adds subsidized fee to target amount fiat values when trade type is EXACT_INPUT', async () => {
+    it('does not add subsidized fee to target amount', async () => {
       const quoteMock = cloneDeep(QUOTE_MOCK);
       quoteMock.fees.subsidized = {
         amount: '500000000000000',
@@ -2426,66 +2456,6 @@ describe('Relay Quotes Utils', () => {
         transaction: TRANSACTION_META_MOCK,
       });
 
-      expect(result[0].targetAmount).toStrictEqual({
-        usd: '1.73',
-        fiat: '3.46',
-      });
-    });
-
-    it('uses amountFormatted for subsidized fee when fee token is a stablecoin', async () => {
-      const quoteMock = cloneDeep(QUOTE_MOCK);
-      quoteMock.fees.subsidized = {
-        amount: '500000',
-        amountFormatted: '0.50',
-        amountUsd: '0.49',
-        currency: {
-          address: '0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48' as Hex,
-          chainId: 1,
-          decimals: 6,
-        },
-        minimumAmount: '500000',
-      };
-
-      successfulFetchMock.mockResolvedValue({
-        json: async () => quoteMock,
-      } as never);
-
-      const result = await getRelayQuotes({
-        messenger,
-        requests: [{ ...QUOTE_REQUEST_MOCK, isMaxAmount: true }],
-        transaction: TRANSACTION_META_MOCK,
-      });
-
-      expect(result[0].targetAmount).toStrictEqual({
-        usd: '1.73',
-        fiat: '3.46',
-      });
-    });
-
-    it('does not add subsidized fee to target amount when trade type is not EXACT_INPUT', async () => {
-      const quoteMock = cloneDeep(QUOTE_MOCK);
-      quoteMock.fees.subsidized = {
-        amount: '500000000000000',
-        amountFormatted: '0.0005',
-        amountUsd: '0.50',
-        currency: {
-          address: '0xdef' as Hex,
-          chainId: 1,
-          decimals: 18,
-        },
-        minimumAmount: '500000000000000',
-      };
-
-      successfulFetchMock.mockResolvedValue({
-        json: async () => quoteMock,
-      } as never);
-
-      const result = await getRelayQuotes({
-        messenger,
-        requests: [QUOTE_REQUEST_MOCK],
-        transaction: TRANSACTION_META_MOCK,
-      });
-
       expect(result[0].targetAmount).toStrictEqual({
         usd: '1.23',
         fiat: '2.46',
diff --git a/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.ts b/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.ts
index 976b9f4f633..e8f04bb3d9a 100644
--- a/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.ts
+++ b/packages/transaction-pay-controller/src/strategy/relay/relay-quotes.ts
@@ -471,24 +471,10 @@ async function normalizeQuote(
     request.targetTokenAddress,
   );
 
-  const additionalTargetAmountUsd =
-    quote.request.tradeType === 'EXACT_INPUT'
-      ? subsidizedFeeUsd
-      : new BigNumber(0);
-
-  if (additionalTargetAmountUsd.gt(0)) {
-    log(
-      'Including subsidized fee in target amount',
-      additionalTargetAmountUsd.toString(10),
-    );
-  }
-
-  const baseTargetAmountUsd = isTargetStablecoin
+  const targetAmountUsd = isTargetStablecoin
     ? new BigNumber(currencyOut.amountFormatted)
     : new BigNumber(currencyOut.amountUsd);
 
-  const targetAmountUsd = baseTargetAmountUsd.plus(additionalTargetAmountUsd);
-
   const targetAmount = getFiatValueFromUsd(targetAmountUsd, usdToFiatRate);
 
   const metamask: RelayQuoteMetamask = {