diff --git a/util/health/health.go b/util/health/health.go
index 15e8300d78..6c0341d334 100644
--- a/util/health/health.go
+++ b/util/health/health.go
@@ -65,7 +65,7 @@ func ignoreLiveObjectHealth(liveObj *unstructured.Unstructured, resHealth appv1.
 			return true
 		}
 		gvk := liveObj.GroupVersionKind()
-		if gvk.Group == "argoproj.io" && gvk.Kind == "Application" && resHealth.Status == appv1.HealthStatusMissing {
+		if gvk.Group == "argoproj.io" && gvk.Kind == "Application" && (resHealth.Status == appv1.HealthStatusMissing || resHealth.Status == appv1.HealthStatusUnknown) {
 			// Covers the app-of-apps corner case where child app is deployed but that app itself
 			// has a status of 'Missing', which we don't want to cause the parent's health status
 			// to also be Missing
diff --git a/util/health/health_test.go b/util/health/health_test.go
index 1be32fdb73..892ee6feb8 100644
--- a/util/health/health_test.go
+++ b/util/health/health_test.go
@@ -115,6 +115,7 @@ func TestAppOfAppsHealth(t *testing.T) {
 	}
 
 	missingApp, missingStatus := newAppLiveObj("foo", appv1.HealthStatusMissing)
+	unknownApp, unknownStatus := newAppLiveObj("fooz", appv1.HealthStatusUnknown)
 	healthyApp, healthyStatus := newAppLiveObj("bar", appv1.HealthStatusHealthy)
 	degradedApp, degradedStatus := newAppLiveObj("baz", appv1.HealthStatusDegraded)
 
@@ -127,6 +128,15 @@ func TestAppOfAppsHealth(t *testing.T) {
 		assert.Equal(t, appv1.HealthStatusHealthy, healthStatus.Status)
 	}
 
+	// verify unknown child app does not affect app health
+	{
+		unknownAndHealthyStatuses := []appv1.ResourceStatus{unknownStatus, healthyStatus}
+		unknownAndHealthyLiveObjects := []*unstructured.Unstructured{unknownApp, healthyApp}
+		healthStatus, err := SetApplicationHealth(unknownAndHealthyStatuses, unknownAndHealthyLiveObjects, nil, noFilter)
+		assert.NoError(t, err)
+		assert.Equal(t, appv1.HealthStatusHealthy, healthStatus.Status)
+	}
+
 	// verify degraded does affect
 	{
 		degradedAndHealthyStatuses := []appv1.ResourceStatus{degradedStatus, healthyStatus}