diff --git a/homeassistant/components/thread/dataset_store.py b/homeassistant/components/thread/dataset_store.py
index 22e2c1822c1..f814fbffbd0 100644
--- a/homeassistant/components/thread/dataset_store.py
+++ b/homeassistant/components/thread/dataset_store.py
@@ -202,8 +202,17 @@ class DatasetStore:
             raise HomeAssistantError("Invalid dataset")
 
         # Bail out if the dataset already exists
-        if any(entry for entry in self.datasets.values() if entry.dataset == dataset):
-            return
+        entry: DatasetEntry | None
+        for entry in self.datasets.values():
+            if entry.dataset == dataset:
+                if (
+                    preferred_border_agent_id
+                    and entry.preferred_border_agent_id is None
+                ):
+                    self.async_set_preferred_border_agent_id(
+                        entry.id, preferred_border_agent_id
+                    )
+                return
 
         # Update if dataset with same extended pan id exists and the timestamp
         # is newer
@@ -248,6 +257,10 @@ class DatasetStore:
                 self.datasets[entry.id], tlv=tlv
             )
             self.async_schedule_save()
+            if preferred_border_agent_id and entry.preferred_border_agent_id is None:
+                self.async_set_preferred_border_agent_id(
+                    entry.id, preferred_border_agent_id
+                )
             return
 
         entry = DatasetEntry(
diff --git a/tests/components/thread/test_dataset_store.py b/tests/components/thread/test_dataset_store.py
index 77102f92019..d8822a7d536 100644
--- a/tests/components/thread/test_dataset_store.py
+++ b/tests/components/thread/test_dataset_store.py
@@ -546,9 +546,32 @@ async def test_set_preferred_border_agent_id(hass: HomeAssistant) -> None:
     assert await dataset_store.async_get_preferred_dataset(hass) is None
 
     await dataset_store.async_add_dataset(
-        hass, "source", DATASET_1, preferred_border_agent_id="blah"
+        hass, "source", DATASET_3, preferred_border_agent_id="blah"
     )
 
     store = await dataset_store.async_get_store(hass)
     assert len(store.datasets) == 1
     assert list(store.datasets.values())[0].preferred_border_agent_id == "blah"
+
+    await dataset_store.async_add_dataset(
+        hass, "source", DATASET_3, preferred_border_agent_id="bleh"
+    )
+    assert list(store.datasets.values())[0].preferred_border_agent_id == "blah"
+
+    await dataset_store.async_add_dataset(hass, "source", DATASET_2)
+    assert len(store.datasets) == 2
+    assert list(store.datasets.values())[1].preferred_border_agent_id is None
+
+    await dataset_store.async_add_dataset(
+        hass, "source", DATASET_2, preferred_border_agent_id="blah"
+    )
+    assert list(store.datasets.values())[1].preferred_border_agent_id == "blah"
+
+    await dataset_store.async_add_dataset(hass, "source", DATASET_1)
+    assert len(store.datasets) == 3
+    assert list(store.datasets.values())[2].preferred_border_agent_id is None
+
+    await dataset_store.async_add_dataset(
+        hass, "source", DATASET_1_LARGER_TIMESTAMP, preferred_border_agent_id="blah"
+    )
+    assert list(store.datasets.values())[1].preferred_border_agent_id == "blah"