diff --git a/packages/service-worker/worker/src/driver.ts b/packages/service-worker/worker/src/driver.ts
index 3c44568657bd6..09b966aeedc0a 100644
--- a/packages/service-worker/worker/src/driver.ts
+++ b/packages/service-worker/worker/src/driver.ts
@@ -802,8 +802,15 @@ export class Driver implements Debuggable, UpdateSource {
     // Future new clients will use this hash as the latest version.
     this.latestHash = hash;
 
+    // If we are in `EXISTING_CLIENTS_ONLY` mode (meaning we didn't have a clean copy of the last
+    // latest version), we can now recover to `NORMAL` mode and start accepting new clients.
+    if (this.state === DriverReadyState.EXISTING_CLIENTS_ONLY) {
+      this.state = DriverReadyState.NORMAL;
+      this.stateMessage = '(nominal)';
+    }
+
     await this.sync();
-    await this.notifyClientsAboutUpdate();
+    await this.notifyClientsAboutUpdate(newVersion);
   }
 
   async checkForUpdate(): Promise<boolean> {
@@ -959,19 +966,19 @@ export class Driver implements Debuggable, UpdateSource {
 
   async lookupResourceWithoutHash(url: string): Promise<CacheState|null> {
     await this.initialized;
-    const version = this.versions.get(this.latestHash !) !;
-    return version.lookupResourceWithoutHash(url);
+    const version = this.versions.get(this.latestHash !);
+    return version ? version.lookupResourceWithoutHash(url) : null;
   }
 
   async previouslyCachedResources(): Promise<string[]> {
     await this.initialized;
-    const version = this.versions.get(this.latestHash !) !;
-    return version.previouslyCachedResources();
+    const version = this.versions.get(this.latestHash !);
+    return version ? version.previouslyCachedResources() : [];
   }
 
-  recentCacheStatus(url: string): Promise<UpdateCacheStatus> {
-    const version = this.versions.get(this.latestHash !) !;
-    return version.recentCacheStatus(url);
+  async recentCacheStatus(url: string): Promise<UpdateCacheStatus> {
+    const version = this.versions.get(this.latestHash !);
+    return version ? version.recentCacheStatus(url) : UpdateCacheStatus.NOT_CACHED;
   }
 
   private mergeHashWithAppData(manifest: Manifest, hash: string): {hash: string, appData: Object} {
@@ -981,11 +988,10 @@ export class Driver implements Debuggable, UpdateSource {
     };
   }
 
-  async notifyClientsAboutUpdate(): Promise<void> {
+  async notifyClientsAboutUpdate(next: AppVersion): Promise<void> {
     await this.initialized;
 
     const clients = await this.scope.clients.matchAll();
-    const next = this.versions.get(this.latestHash !) !;
 
     await clients.reduce(async(previous, client) => {
       await previous;
diff --git a/packages/service-worker/worker/test/happy_spec.ts b/packages/service-worker/worker/test/happy_spec.ts
index c9d550ac20472..aa6a673473023 100644
--- a/packages/service-worker/worker/test/happy_spec.ts
+++ b/packages/service-worker/worker/test/happy_spec.ts
@@ -1269,6 +1269,22 @@ import {SwTestHarness, SwTestHarnessBuilder} from '../testing/scope';
         brokenLazyServer.assertNoOtherRequests();
       });
 
+      it('recovers from degraded `EXISTING_CLIENTS_ONLY` mode as soon as there is a valid update',
+         async() => {
+           await driver.initialized;
+           expect(driver.state).toBe(DriverReadyState.NORMAL);
+
+           // Install a broken version.
+           scope.updateServerState(brokenServer);
+           await driver.checkForUpdate();
+           expect(driver.state).toBe(DriverReadyState.EXISTING_CLIENTS_ONLY);
+
+           // Install a good version.
+           scope.updateServerState(serverUpdate);
+           await driver.checkForUpdate();
+           expect(driver.state).toBe(DriverReadyState.NORMAL);
+         });
+
       it('ignores invalid `only-if-cached` requests ', async() => {
         const requestFoo = (cache: RequestCache | 'only-if-cached', mode: RequestMode) =>
             makeRequest(scope, '/foo.txt', undefined, {cache, mode});