diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index abbb6c1267d..a24fc908a12 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -2398,8 +2398,15 @@ util::Result<void> CWallet::RemoveTxs(WalletBatch& batch, std::vector<Txid>& txs
         for (const auto& it : erased_txs) {
             const Txid hash{it->first};
             wtxOrdered.erase(it->second.m_it_wtxOrdered);
-            for (const auto& txin : it->second.tx->vin)
-                mapTxSpends.erase(txin.prevout);
+            for (const auto& txin : it->second.tx->vin) {
+                auto range = mapTxSpends.equal_range(txin.prevout);
+                for (auto iter = range.first; iter != range.second; ++iter) {
+                    if (iter->second == hash) {
+                        mapTxSpends.erase(iter);
+                        break;
+                    }
+                }
+            }
             for (unsigned int i = 0; i < it->second.tx->vout.size(); ++i) {
                 m_txos.erase(COutPoint(hash, i));
             }
diff --git a/test/functional/wallet_importprunedfunds.py b/test/functional/wallet_importprunedfunds.py
index 72896052b5f..1948cb9278b 100755
--- a/test/functional/wallet_importprunedfunds.py
+++ b/test/functional/wallet_importprunedfunds.py
@@ -14,6 +14,7 @@ from test_framework.messages import (
 from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import (
     assert_equal,
+    assert_not_equal,
     assert_raises_rpc_error,
     wallet_importprivkey,
 )
@@ -129,6 +130,33 @@ class ImportPrunedFundsTest(BitcoinTestFramework):
         mb.header.nTime += 1  # modify arbitrary block header field to change block hash
         assert_raises_rpc_error(-5, "Block not found in chain", w1.importprunedfunds, rawtxn1, mb.serialize().hex())
 
+        self.log.info("Test removeprunedfunds with conflicting transactions")
+        node = self.nodes[0]
+
+        # Create a transaction
+        utxo = node.listunspent()[0]
+        addr = node.getnewaddress()
+        tx1_id = node.send(outputs=[{addr: 1}], inputs=[utxo])["txid"]
+        tx1_fee = node.gettransaction(tx1_id)["fee"]
+
+        # Create a conflicting tx with a larger fee (tx1_fee is negative)
+        output_value = utxo["amount"] + tx1_fee - Decimal("0.00001")
+        raw_tx2 = node.createrawtransaction(inputs=[utxo], outputs=[{addr: output_value}])
+        signed_tx2 = node.signrawtransactionwithwallet(raw_tx2)
+        tx2_id = node.sendrawtransaction(signed_tx2["hex"])
+        assert_not_equal(tx2_id, tx1_id)
+
+        # Both txs should be in the wallet, tx2 replaced tx1 in mempool
+        assert tx1_id in [tx["txid"] for tx in node.listtransactions()]
+        assert tx2_id in [tx["txid"] for tx in node.listtransactions()]
+
+        # Remove the replaced tx from wallet
+        node.removeprunedfunds(tx1_id)
+
+        # The UTXO should still be considered spent (by tx2)
+        available_utxos = [u["txid"] for u in node.listunspent(minconf=0)]
+        assert utxo["txid"] not in available_utxos, "UTXO should still be spent by conflicting tx"
+
 
 if __name__ == '__main__':
     ImportPrunedFundsTest(__file__).main()