diff --git a/crates/core/src/operations/subscribe.rs b/crates/core/src/operations/subscribe.rs
index ba64a17c9..5b83206dd 100644
--- a/crates/core/src/operations/subscribe.rs
+++ b/crates/core/src/operations/subscribe.rs
@@ -84,10 +84,22 @@ pub(crate) async fn request_subscribe(
                 tracing::debug!(%key, "No remote peers available for subscription, checking locally");
 
                 if super::has_contract(op_manager, *key).await? {
-                    // We have the contract locally - complete operation immediately
-                    // Following Nacho's suggestion: use notify_node_event to tap into
-                    // result router directly without state transitions
-                    tracing::info!(%key, tx = %id, "Contract available locally, completing subscription via result router");
+                    // We have the contract locally - register subscription and complete immediately
+                    tracing::info!(%key, tx = %id, "Contract available locally, registering local subscription");
+
+                    // CRITICAL FIX for issue #2001: Register subscriber in DashMap before completing
+                    // Without this, UPDATE operations won't find subscribers for locally-cached contracts
+                    let subscriber = op_manager.ring.connection_manager.own_location();
+                    if op_manager
+                        .ring
+                        .add_subscriber(key, subscriber.clone())
+                        .is_err()
+                    {
+                        tracing::error!(%key, tx = %id, "Failed to add local subscriber - max subscribers reached");
+                        // Continue anyway - client requested subscription and contract is local
+                    } else {
+                        tracing::debug!(%key, tx = %id, subscriber = %subscriber.peer, "Successfully registered local subscriber");
+                    }
 
                     // Use notify_node_event to deliver SubscribeResponse directly to client
                     // This avoids the problem with notify_op_change overwriting the operation
diff --git a/crates/core/tests/operations.rs b/crates/core/tests/operations.rs
index ad3597a64..f08ea647a 100644
--- a/crates/core/tests/operations.rs
+++ b/crates/core/tests/operations.rs
@@ -1148,6 +1148,8 @@ async fn test_multiple_clients_subscription() -> TestResult {
             }
         }
 
+        tracing::info!("All clients subscribed, proceeding with UPDATE operation");
+
         // Create a new to-do list by deserializing the current state, adding a task, and serializing it back
         let mut todo_list: test_utils::TodoList = serde_json::from_slice(wrapped_state.as_ref())
             .unwrap_or_else(|_| test_utils::TodoList {