diff --git a/client/allocrunner/alloc_runner.go b/client/allocrunner/alloc_runner.go
index 544f9ba6ff..170dabe244 100644
--- a/client/allocrunner/alloc_runner.go
+++ b/client/allocrunner/alloc_runner.go
@@ -248,10 +248,18 @@ func (ar *allocRunner) Run() {
 	default:
 	}
 
+	// When handling (potentially restored) terminal alloc, ensure tasks and post-run hooks are run
+	// to perform any cleanup that's necessary, potentially not done prior to earlier termination
+
 	// Run the prestart hooks if non-terminal
 	if ar.shouldRun() {
 		if err := ar.prerun(); err != nil {
 			ar.logger.Error("prerun failed", "error", err)
+
+			for _, tr := range ar.tasks {
+				tr.MarkFailedDead(fmt.Sprintf("failed to setup runner: %v", err))
+			}
+
 			goto POST
 		}
 	}
diff --git a/client/allocrunner/alloc_runner_unix_test.go b/client/allocrunner/alloc_runner_unix_test.go
index 8c31832e3c..a438266a49 100644
--- a/client/allocrunner/alloc_runner_unix_test.go
+++ b/client/allocrunner/alloc_runner_unix_test.go
@@ -215,3 +215,79 @@ func TestAllocRunner_Restore_CompletedBatch(t *testing.T) {
 	events := ar2.AllocState().TaskStates[task.Name].Events
 	require.Equal(t, initialRunEvents, events)
 }
+
+// TestAllocRunner_PreStartFailuresLeadToFailed asserts that if an alloc
+// prestart hooks failed, then the alloc and subsequent tasks transition
+// to failed state
+func TestAllocRunner_PreStartFailuresLeadToFailed(t *testing.T) {
+	t.Parallel()
+
+	alloc := mock.Alloc()
+	alloc.Job.Type = structs.JobTypeBatch
+	task := alloc.Job.TaskGroups[0].Tasks[0]
+	task.Driver = "mock_driver"
+	task.Config = map[string]interface{}{
+		"run_for": "2ms",
+	}
+	alloc.Job.TaskGroups[0].RestartPolicy = &structs.RestartPolicy{
+		Attempts: 0,
+	}
+
+	conf, cleanup := testAllocRunnerConfig(t, alloc.Copy())
+	defer cleanup()
+
+	// Maintain state for subsequent run
+	conf.StateDB = state.NewMemDB(conf.Logger)
+
+	// Start and wait for task to be running
+	ar, err := NewAllocRunner(conf)
+	require.NoError(t, err)
+
+	ar.runnerHooks = append(ar.runnerHooks, &allocFailingPrestartHook{})
+
+	go ar.Run()
+	defer destroy(ar)
+
+	select {
+	case <-ar.WaitCh():
+	case <-time.After(10 * time.Second):
+		require.Fail(t, "alloc.waitCh wasn't closed")
+	}
+
+	testutil.WaitForResult(func() (bool, error) {
+		s := ar.AllocState()
+		if s.ClientStatus != structs.AllocClientStatusFailed {
+			return false, fmt.Errorf("expected complete, got %s", s.ClientStatus)
+		}
+		return true, nil
+	}, func(err error) {
+		require.NoError(t, err)
+	})
+
+	// once job finishes, it shouldn't run again
+	require.False(t, ar.shouldRun())
+	initialRunEvents := ar.AllocState().TaskStates[task.Name].Events
+	require.Len(t, initialRunEvents, 2)
+
+	ls, ts, err := conf.StateDB.GetTaskRunnerState(alloc.ID, task.Name)
+	require.NoError(t, err)
+	require.NotNil(t, ls)
+	require.NotNil(t, ts)
+	require.Equal(t, structs.TaskStateDead, ts.State)
+	require.True(t, ts.Failed)
+
+	// TR waitCh must be closed too!
+	select {
+	case <-ar.tasks[task.Name].WaitCh():
+	case <-time.After(10 * time.Second):
+		require.Fail(t, "tr.waitCh wasn't closed")
+	}
+}
+
+type allocFailingPrestartHook struct{}
+
+func (*allocFailingPrestartHook) Name() string { return "failing_prestart" }
+
+func (*allocFailingPrestartHook) Prerun() error {
+	return fmt.Errorf("failing prestart hooks")
+}
diff --git a/client/allocrunner/taskrunner/task_runner.go b/client/allocrunner/taskrunner/task_runner.go
index 9ea8c0416b..0159b91bcc 100644
--- a/client/allocrunner/taskrunner/task_runner.go
+++ b/client/allocrunner/taskrunner/task_runner.go
@@ -384,6 +384,28 @@ func (tr *TaskRunner) initLabels() {
 	}
 }
 
+// Mark a task as failed and not to run.  Aimed to be invoked when alloc runner
+// prestart hooks failed.
+// Should never be called with Run().
+func (tr *TaskRunner) MarkFailedDead(reason string) {
+	defer close(tr.waitCh)
+
+	tr.stateLock.Lock()
+	if err := tr.stateDB.PutTaskRunnerLocalState(tr.allocID, tr.taskName, tr.localState); err != nil {
+		//TODO Nomad will be unable to restore this task; try to kill
+		//     it now and fail? In general we prefer to leave running
+		//     tasks running even if the agent encounters an error.
+		tr.logger.Warn("error persisting local failed task state; may be unable to restore after a Nomad restart",
+			"error", err)
+	}
+	tr.stateLock.Unlock()
+
+	event := structs.NewTaskEvent(structs.TaskSetupFailure).
+		SetDisplayMessage(reason).
+		SetFailsTask()
+	tr.UpdateState(structs.TaskStateDead, event)
+}
+
 // Run the TaskRunner. Starts the user's task or reattaches to a restored task.
 // Run closes WaitCh when it exits. Should be started in a goroutine.
 func (tr *TaskRunner) Run() {