diff --git a/src/gitops/utils/gitops.test.ts b/src/gitops/utils/gitops.test.ts
index 24e9b2aff..6bd75d0fe 100644
--- a/src/gitops/utils/gitops.test.ts
+++ b/src/gitops/utils/gitops.test.ts
@@ -118,6 +118,27 @@ describe('getOperationType', () => {
   });
 });
 
+const healthyApplicationSetConditions = [
+  {
+    type: 'ErrorOccurred',
+    status: 'False',
+    reason: 'ApplicationSetUpToDate',
+    message: 'All applications have been generated successfully',
+  },
+  {
+    type: 'ParametersGenerated',
+    status: 'True',
+    reason: 'ParametersGenerated',
+    message: 'Successfully generated parameters for all Applications',
+  },
+  {
+    type: 'ResourcesUpToDate',
+    status: 'True',
+    reason: 'ApplicationSetUpToDate',
+    message: 'All applications have been generated successfully',
+  },
+];
+
 describe('getAppSetStatus', () => {
   it('determines ApplicationSet status', () => {
     expect(
@@ -140,4 +161,34 @@ describe('getAppSetStatus', () => {
 
     expect(getAppSetStatus({} as any)).toMatchInlineSnapshot(`"Unknown"`);
   });
+
+  it('returns Healthy for realistic upstream conditions (ResourcesUpToDate=True)', () => {
+    expect(
+      getAppSetStatus({
+        status: { conditions: healthyApplicationSetConditions },
+      } as any),
+    ).toBe('Healthy');
+  });
+
+  it('returns Error when ResourcesUpToDate is False', () => {
+    expect(
+      getAppSetStatus({
+        status: {
+          conditions: [
+            { type: 'ErrorOccurred', status: 'False' },
+            { type: 'ParametersGenerated', status: 'True' },
+            { type: 'ResourcesUpToDate', status: 'False', reason: 'ErrorOccurred' },
+          ],
+        },
+      } as any),
+    ).toBe('Error');
+  });
+
+  it('does not treat ApplicationSetUpToDate reason as a condition type', () => {
+    expect(
+      getAppSetStatus({
+        status: { conditions: [{ type: 'ApplicationSetUpToDate', status: 'True' }] },
+      } as any),
+    ).toBe('Healthy');
+  });
 });
diff --git a/src/gitops/utils/gitops.ts b/src/gitops/utils/gitops.ts
index 7457e09e5..78218f953 100644
--- a/src/gitops/utils/gitops.ts
+++ b/src/gitops/utils/gitops.ts
@@ -192,8 +192,8 @@ export function getAppSetStatus(appset: ApplicationSetKind): ApplicationSetStatu
       ) {
         status = ApplicationSetStatus.ERROR;
       } else if (
-        condition.type == 'ApplicationSetUpToDate' &&
-        condition.status == K8sResourceConditionStatus.True
+        condition.type == 'ResourcesUpToDate' &&
+        condition.status != K8sResourceConditionStatus.True
       ) {
         status = ApplicationSetStatus.ERROR;
       }