diff --git a/workflow/common/util.go b/workflow/common/util.go
index 8eabda18ec32..b5ca17f4f6c2 100644
--- a/workflow/common/util.go
+++ b/workflow/common/util.go
@@ -322,3 +322,18 @@ func IsDone(un *unstructured.Unstructured) bool {
 		un.GetLabels()[LabelKeyCompleted] == "true" &&
 		un.GetLabels()[LabelKeyWorkflowArchivingStatus] != "Pending"
 }
+
+// Check whether child hooked nodes Fulfilled
+func CheckAllHooksFullfilled(node *wfv1.NodeStatus, nodes wfv1.Nodes) bool {
+	childs := node.Children
+	for _, id := range childs {
+		n, ok := nodes[id]
+		if !ok {
+			continue
+		}
+		if n.NodeFlag != nil && n.NodeFlag.Hooked && !n.Fulfilled() {
+			return false
+		}
+	}
+	return true
+}
diff --git a/workflow/controller/dag.go b/workflow/controller/dag.go
index a5fc603fbf54..9c00eba13c37 100644
--- a/workflow/controller/dag.go
+++ b/workflow/controller/dag.go
@@ -838,20 +838,10 @@ func (d *dagContext) evaluateDependsLogic(taskName string) (bool, bool, error) {
 
 		// If the task is still running, we should not proceed.
 		depNode := d.getTaskNode(taskName)
-		if depNode == nil || !depNode.Fulfilled() {
+		if depNode == nil || !depNode.Fulfilled() || !common.CheckAllHooksFullfilled(depNode, d.wf.Status.Nodes) {
 			return false, false, nil
 		}
 
-		// If a task happens to have an onExit node, don't proceed until the onExit node is fulfilled
-		if onExitNode, err := d.wf.GetNodeByName(common.GenerateOnExitNodeName(depNode.Name)); onExitNode != nil {
-			if err != nil {
-				return false, false, err
-			}
-			if !onExitNode.Fulfilled() {
-				return false, false, nil
-			}
-		}
-
 		evalTaskName := strings.Replace(taskName, "-", "_", -1)
 		if _, ok := evalScope[evalTaskName]; ok {
 			continue
diff --git a/workflow/controller/dag_test.go b/workflow/controller/dag_test.go
index 1ce7d1f9b47f..5bb84700a782 100644
--- a/workflow/controller/dag_test.go
+++ b/workflow/controller/dag_test.go
@@ -3655,3 +3655,57 @@ spec:
 	woc1.operate(ctx)
 	assert.Equal(t, wfv1.WorkflowRunning, woc.wf.Status.Phase)
 }
+
+func TestDagWftmplHookWithRetry(t *testing.T) {
+	wf := wfv1.MustUnmarshalWorkflow("@testdata/dag_wftmpl_hook_with_retry.yaml")
+	woc := newWoc(*wf)
+	ctx := context.Background()
+	woc.operate(ctx)
+
+	// assert task kicked
+	taskNode := woc.wf.Status.Nodes.FindByDisplayName("task")
+	assert.Equal(t, wfv1.NodePending, taskNode.Phase)
+
+	// task failed
+	makePodsPhase(ctx, woc, v1.PodFailed)
+	woc.operate(ctx)
+
+	// onFailure retry hook(0) kicked
+	taskNode = woc.wf.Status.Nodes.FindByDisplayName("task")
+	assert.Equal(t, wfv1.NodeFailed, taskNode.Phase)
+	failHookRetryNode := woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure")
+	failHookChild0Node := woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure(0)")
+	assert.Equal(t, wfv1.NodeRunning, failHookRetryNode.Phase)
+	assert.Equal(t, wfv1.NodePending, failHookChild0Node.Phase)
+
+	// onFailure retry hook(0) failed
+	makePodsPhase(ctx, woc, v1.PodFailed)
+	woc.operate(ctx)
+
+	// onFailure retry hook(1) kicked
+	taskNode = woc.wf.Status.Nodes.FindByDisplayName("task")
+	assert.Equal(t, wfv1.NodeFailed, taskNode.Phase)
+	failHookRetryNode = woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure")
+	failHookChild0Node = woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure(0)")
+	failHookChild1Node := woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure(1)")
+	assert.Equal(t, wfv1.NodeRunning, failHookRetryNode.Phase)
+	assert.Equal(t, wfv1.NodeFailed, failHookChild0Node.Phase)
+	assert.Equal(t, wfv1.NodePending, failHookChild1Node.Phase)
+
+	// onFailure retry hook(1) failed
+	makePodsPhase(ctx, woc, v1.PodFailed)
+	woc.operate(ctx)
+
+	// onFailure retry node faled
+	taskNode = woc.wf.Status.Nodes.FindByDisplayName("task")
+	assert.Equal(t, wfv1.NodeFailed, taskNode.Phase)
+	failHookRetryNode = woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure")
+	failHookChild0Node = woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure(0)")
+	failHookChild1Node = woc.wf.Status.Nodes.FindByDisplayName("task.hooks.failure(1)")
+	assert.Equal(t, wfv1.NodeFailed, failHookRetryNode.Phase)
+	assert.Equal(t, wfv1.NodeFailed, failHookChild0Node.Phase)
+	assert.Equal(t, wfv1.NodeFailed, failHookChild1Node.Phase)
+	// finish Node skipped
+	finishNode := woc.wf.Status.Nodes.FindByDisplayName("finish")
+	assert.Equal(t, wfv1.NodeOmitted, finishNode.Phase)
+}
diff --git a/workflow/controller/operator.go b/workflow/controller/operator.go
index 98ebbaf7fbc8..81958b00ba1f 100644
--- a/workflow/controller/operator.go
+++ b/workflow/controller/operator.go
@@ -1735,7 +1735,7 @@ func getRetryNodeChildrenIds(node *wfv1.NodeStatus, nodes wfv1.Nodes) []string {
 		if node == nil {
 			continue
 		}
-		if strings.HasSuffix(node.Name, ".onExit") {
+		if node.NodeFlag != nil && node.NodeFlag.Hooked {
 			childrenIds = append(childrenIds, node.ID)
 		} else if len(node.Children) > 0 {
 			childrenIds = append(childrenIds, node.Children...)
diff --git a/workflow/controller/testdata/dag_wftmpl_hook_with_retry.yaml b/workflow/controller/testdata/dag_wftmpl_hook_with_retry.yaml
new file mode 100644
index 000000000000..2f5af8e07932
--- /dev/null
+++ b/workflow/controller/testdata/dag_wftmpl_hook_with_retry.yaml
@@ -0,0 +1,52 @@
+# https://github.com/argoproj/argo-workflows/issues/12120
+apiVersion: argoproj.io/v1alpha1
+kind: Workflow
+metadata:
+  name: dag-wftmpl-hook-with-retry
+  namespace: argo
+spec:
+  templates:
+    - name: main
+      dag:
+        tasks:
+          - name: task
+            template: task
+            hooks:
+              failure:
+                template: exit-handler
+                expression: tasks["task"].status == "Failed"
+          - name: finish
+            template: finish
+            dependencies:
+              - task
+    - name: task
+      container:
+        name: ''
+        image: alpine:latest
+        command:
+          - sh
+          - '-c'
+        args:
+          - exit 1;
+    - name: exit-handler
+      container:
+        name: ''
+        image: alpine:latest
+        command:
+          - sh
+          - '-c'
+        args:
+          - exit 1;
+      retryStrategy:
+        limit: 1
+        retryPolicy: Always
+    - name: finish
+      container:
+        name: ''
+        image: alpine:latest
+        command:
+          - sh
+          - '-c'
+        args:
+          - echo "Finished!";
+  entrypoint: main