diff --git a/reactiveweb/src/keep-latest.ts b/reactiveweb/src/keep-latest.ts
index b2fb052e..b2f97ec0 100644
--- a/reactiveweb/src/keep-latest.ts
+++ b/reactiveweb/src/keep-latest.ts
@@ -107,7 +107,7 @@ export function keepLatest<Return = unknown>({ when, value: valueFn }: Options<R
         if (previous === undefined && initial) {
           initial = false;
 
-          return value;
+          return (previous = value);
         }
 
         return (previous = isEmpty(value) ? previous : value);
diff --git a/tests/test-app/tests/utils/keep-latest/js-test.ts b/tests/test-app/tests/utils/keep-latest/js-test.ts
index 2bc2c9a5..5244725c 100644
--- a/tests/test-app/tests/utils/keep-latest/js-test.ts
+++ b/tests/test-app/tests/utils/keep-latest/js-test.ts
@@ -68,6 +68,26 @@ module('Utils | keepLatest | js', function (hooks) {
     assert.strictEqual(instance.data, 3);
   });
 
+  test('it keeps the initial value when it starts out loading', async function (assert) {
+    class Test {
+      @tracked isLoading = true;
+      @tracked value?: number = 3;
+
+      @use data = keepLatest({
+        when: () => this.isLoading,
+        value: () => this.value,
+      });
+    }
+
+    const instance = new Test();
+
+    assert.strictEqual(instance.data, 3);
+
+    instance.value = undefined;
+
+    assert.strictEqual(instance.data, 3, 'returns the initial value while the value is empty');
+  });
+
   test('it works with array values correctly', async function (assert) {
     class Test {
       @tracked isLoading = false;
diff --git a/tests/test-app/tests/utils/keep-latest/rendering-test.gts b/tests/test-app/tests/utils/keep-latest/rendering-test.gts
index f5695f29..68ad97a1 100644
--- a/tests/test-app/tests/utils/keep-latest/rendering-test.gts
+++ b/tests/test-app/tests/utils/keep-latest/rendering-test.gts
@@ -59,6 +59,29 @@ module('Utils | keepLatest | rendering', function (hooks) {
     assert.dom().hasText('2');
   });
 
+  test('it keeps the initial value when it starts out loading', async function (assert) {
+    class Test {
+      @tracked isLoading = true;
+      @tracked value?: number = 3;
+
+      @use data = keepLatest({
+        when: () => this.isLoading,
+        value: () => this.value,
+      });
+    }
+
+    const instance = new Test();
+
+    await render(<template>{{instance.data}}</template>);
+
+    assert.dom().hasText('3');
+
+    instance.value = undefined;
+    await settled();
+
+    assert.dom().hasText('3', 'renders the initial value while the value is empty');
+  });
+
   test('if the previous value is not empty, and the current value is empty', async function (assert) {
     class Test {
       @tracked x: number[] | number = [];
diff --git a/tests/vite-app/tests/utils/keep-latest/js-test.ts b/tests/vite-app/tests/utils/keep-latest/js-test.ts
index 2bc2c9a5..5244725c 100644
--- a/tests/vite-app/tests/utils/keep-latest/js-test.ts
+++ b/tests/vite-app/tests/utils/keep-latest/js-test.ts
@@ -68,6 +68,26 @@ module('Utils | keepLatest | js', function (hooks) {
     assert.strictEqual(instance.data, 3);
   });
 
+  test('it keeps the initial value when it starts out loading', async function (assert) {
+    class Test {
+      @tracked isLoading = true;
+      @tracked value?: number = 3;
+
+      @use data = keepLatest({
+        when: () => this.isLoading,
+        value: () => this.value,
+      });
+    }
+
+    const instance = new Test();
+
+    assert.strictEqual(instance.data, 3);
+
+    instance.value = undefined;
+
+    assert.strictEqual(instance.data, 3, 'returns the initial value while the value is empty');
+  });
+
   test('it works with array values correctly', async function (assert) {
     class Test {
       @tracked isLoading = false;
diff --git a/tests/vite-app/tests/utils/keep-latest/rendering-test.gts b/tests/vite-app/tests/utils/keep-latest/rendering-test.gts
index f5695f29..68ad97a1 100644
--- a/tests/vite-app/tests/utils/keep-latest/rendering-test.gts
+++ b/tests/vite-app/tests/utils/keep-latest/rendering-test.gts
@@ -59,6 +59,29 @@ module('Utils | keepLatest | rendering', function (hooks) {
     assert.dom().hasText('2');
   });
 
+  test('it keeps the initial value when it starts out loading', async function (assert) {
+    class Test {
+      @tracked isLoading = true;
+      @tracked value?: number = 3;
+
+      @use data = keepLatest({
+        when: () => this.isLoading,
+        value: () => this.value,
+      });
+    }
+
+    const instance = new Test();
+
+    await render(<template>{{instance.data}}</template>);
+
+    assert.dom().hasText('3');
+
+    instance.value = undefined;
+    await settled();
+
+    assert.dom().hasText('3', 'renders the initial value while the value is empty');
+  });
+
   test('if the previous value is not empty, and the current value is empty', async function (assert) {
     class Test {
       @tracked x: number[] | number = [];