diff --git a/changelog/fragments/helm_operator_install_rollback_change.yaml b/changelog/fragments/helm_operator_install_rollback_change.yaml
new file mode 100644
index 0000000000..9d6ba5d4b9
--- /dev/null
+++ b/changelog/fragments/helm_operator_install_rollback_change.yaml
@@ -0,0 +1,5 @@
+entries:
+  - description: >
+      For Helm-based operators, if the release is not installed but status.DeployedRelease is populated, skip the rollback(uninstall) if the install errors.
+    kind: "change"
+    breaking: false
diff --git a/internal/helm/controller/reconcile.go b/internal/helm/controller/reconcile.go
index fb0e56d692..4a1707ef88 100644
--- a/internal/helm/controller/reconcile.go
+++ b/internal/helm/controller/reconcile.go
@@ -171,11 +171,20 @@ func (r HelmOperatorReconciler) Reconcile(ctx context.Context, request reconcile
 	status.RemoveCondition(types.ConditionIrreconcilable)
 
 	if !manager.IsInstalled() {
+		// If all the Helm release records are deleted, then the Helm operator will try to install the release again.
+		// In that case, if the install errors, then don't perform the uninstall rollback because it might lead to unintended data loss.
+		// See: https://github.com/operator-framework/operator-sdk/issues/4296
+		rollbackByUninstall := true
+		if status.DeployedRelease != nil {
+			log.Info("Release is not installed but status.DeployedRelease is populated. If the install error, skip rollback")
+			rollbackByUninstall = false
+		}
+
 		for k, v := range r.OverrideValues {
 			r.EventRecorder.Eventf(o, "Warning", "OverrideValuesInUse",
 				"Chart value %q overridden to %q by operator's watches.yaml", k, v)
 		}
-		installedRelease, err := manager.InstallRelease(ctx)
+		installedRelease, err := manager.InstallRelease(ctx, rollbackByUninstall)
 		if err != nil {
 			log.Error(err, "Release failed")
 			status.SetCondition(types.HelmAppCondition{
diff --git a/internal/helm/release/manager.go b/internal/helm/release/manager.go
index d72c2a0c0c..5a71af21cd 100644
--- a/internal/helm/release/manager.go
+++ b/internal/helm/release/manager.go
@@ -49,7 +49,7 @@ type Manager interface {
 	IsInstalled() bool
 	IsUpgradeRequired() bool
 	Sync(context.Context) error
-	InstallRelease(context.Context, ...InstallOption) (*rpb.Release, error)
+	InstallRelease(context.Context, bool, ...InstallOption) (*rpb.Release, error)
 	UpgradeRelease(context.Context, ...UpgradeOption) (*rpb.Release, *rpb.Release, error)
 	ReconcileRelease(context.Context) (*rpb.Release, error)
 	UninstallRelease(context.Context, ...UninstallOption) (*rpb.Release, error)
@@ -157,7 +157,7 @@ func (m manager) getCandidateRelease(namespace, name string, chart *cpb.Chart,
 }
 
 // InstallRelease performs a Helm release install.
-func (m manager) InstallRelease(ctx context.Context, opts ...InstallOption) (*rpb.Release, error) {
+func (m manager) InstallRelease(ctx context.Context, rollbackByUninstall bool, opts ...InstallOption) (*rpb.Release, error) {
 	install := action.NewInstall(m.actionConfig)
 	install.ReleaseName = m.releaseName
 	install.Namespace = m.namespace
@@ -170,7 +170,7 @@ func (m manager) InstallRelease(ctx context.Context, opts ...InstallOption) (*rp
 	installedRelease, err := install.Run(m.chart, m.values)
 	if err != nil {
 		// Workaround for helm/helm#3338
-		if installedRelease != nil {
+		if installedRelease != nil && rollbackByUninstall {
 			uninstall := action.NewUninstall(m.actionConfig)
 			_, uninstallErr := uninstall.Run(m.releaseName)