diff --git a/.changeset/spotty-shoes-exercise.md b/.changeset/spotty-shoes-exercise.md
new file mode 100644
index 0000000000..92e0825c9f
--- /dev/null
+++ b/.changeset/spotty-shoes-exercise.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-catalog-backend': patch
+---
+
+Support changing location keys on existing entities, in delta mutations
diff --git a/plugins/catalog-backend/src/database/DefaultProviderDatabase.test.ts b/plugins/catalog-backend/src/database/DefaultProviderDatabase.test.ts
index e9d1bbfcc9..ac361795e1 100644
--- a/plugins/catalog-backend/src/database/DefaultProviderDatabase.test.ts
+++ b/plugins/catalog-backend/src/database/DefaultProviderDatabase.test.ts
@@ -943,7 +943,7 @@ describe('DefaultProviderDatabase', () => {
             entity_ref: stringifyEntityRef(entity6),
             unprocessed_entity: JSON.stringify(entity6),
             unprocessed_hash: generateStableHash(entity6),
-            location_key: 'old', // TODO(freben): This should have been updated to "new", but we do not support that yet
+            location_key: 'new', // managed to update only the location key
           },
         ]);
       },
diff --git a/plugins/catalog-backend/src/database/DefaultProviderDatabase.ts b/plugins/catalog-backend/src/database/DefaultProviderDatabase.ts
index 11e4fd1d40..03f72e06b7 100644
--- a/plugins/catalog-backend/src/database/DefaultProviderDatabase.ts
+++ b/plugins/catalog-backend/src/database/DefaultProviderDatabase.ts
@@ -237,11 +237,16 @@ export class DefaultProviderDatabase implements ProviderDatabase {
           const newHash = generateStableHash(deferred.entity);
           const oldState = oldStates.get(entityRef);
           if (oldState === undefined) {
+            // Add any entity that does not exist in the database
             toAdd.push({ deferred, hash: newHash });
           } else if (
-            newHash !== oldState.unprocessed_hash ||
-            (deferred.locationKey ?? null) !== (oldState.location_key ?? null) // normalize undefined/null
+            (deferred.locationKey ?? null) !== (oldState.location_key ?? null)
           ) {
+            // Remove and then re-add any entity that exists, but with a different location key
+            toRemove.push(entityRef);
+            toAdd.push({ deferred, hash: newHash });
+          } else if (newHash !== oldState.unprocessed_hash) {
+            // Entities with modifications should be pushed through too
             toUpsert.push({ deferred, hash: newHash });
           }
         });
@@ -294,7 +299,7 @@ export class DefaultProviderDatabase implements ProviderDatabase {
         // Add any entity that does not exist in the database
         toAdd.push(upsertItem);
       } else if (
-        (oldRef?.locationKey ?? undefined) !==
+        (oldRef.locationKey ?? undefined) !==
         (item.deferred.locationKey ?? undefined)
       ) {
         // Remove and then re-add any entity that exists, but with a different location key