diff --git a/routing/notifications_test.go b/routing/notifications_test.go
index 07e8e3a3..c5f9a6c4 100644
--- a/routing/notifications_test.go
+++ b/routing/notifications_test.go
@@ -19,6 +19,7 @@ import (
 	"github.com/lightningnetwork/lnd/channeldb"
 	"github.com/lightningnetwork/lnd/input"
 	"github.com/lightningnetwork/lnd/lnwallet"
+	"github.com/lightningnetwork/lnd/lnwallet/btcwallet"
 	"github.com/lightningnetwork/lnd/lnwire"
 	"github.com/lightningnetwork/lnd/routing/chainview"
 	"github.com/lightningnetwork/lnd/routing/route"
@@ -170,8 +171,8 @@ func (m *mockChain) GetBlockHash(blockHeight int64) (*chainhash.Hash, error) {
 
 	hash, ok := m.blockIndex[uint32(blockHeight)]
 	if !ok {
-		return nil, fmt.Errorf("can't find block hash, for "+
-			"height %v", blockHeight)
+		return nil, fmt.Errorf("block number out of range: %v",
+			blockHeight)
 	}
 
 	return &hash, nil
@@ -182,6 +183,13 @@ func (m *mockChain) addUtxo(op wire.OutPoint, out *wire.TxOut) {
 	m.utxos[op] = *out
 	m.Unlock()
 }
+
+func (m *mockChain) delUtxo(op wire.OutPoint) {
+	m.Lock()
+	delete(m.utxos, op)
+	m.Unlock()
+}
+
 func (m *mockChain) GetUtxo(op *wire.OutPoint, _ []byte, _ uint32,
 	_ <-chan struct{}) (*wire.TxOut, error) {
 	m.RLock()
@@ -189,7 +197,7 @@ func (m *mockChain) GetUtxo(op *wire.OutPoint, _ []byte, _ uint32,
 
 	utxo, ok := m.utxos[*op]
 	if !ok {
-		return nil, fmt.Errorf("utxo not found")
+		return nil, btcwallet.ErrOutputSpent
 	}
 
 	return &utxo, nil
diff --git a/routing/router.go b/routing/router.go
index 7cb3a526..bbee6a65 100644
--- a/routing/router.go
+++ b/routing/router.go
@@ -4,6 +4,7 @@ import (
 	"bytes"
 	"fmt"
 	"runtime"
+	"strings"
 	"sync"
 	"sync/atomic"
 	"time"
@@ -23,6 +24,7 @@ import (
 	"github.com/lightningnetwork/lnd/input"
 	"github.com/lightningnetwork/lnd/lntypes"
 	"github.com/lightningnetwork/lnd/lnwallet"
+	"github.com/lightningnetwork/lnd/lnwallet/btcwallet"
 	"github.com/lightningnetwork/lnd/lnwallet/chanvalidate"
 	"github.com/lightningnetwork/lnd/lnwire"
 	"github.com/lightningnetwork/lnd/multimutex"
@@ -1309,6 +1311,37 @@ func (r *ChannelRouter) processUpdate(msg interface{},
 		channelID := lnwire.NewShortChanIDFromInt(msg.ChannelID)
 		fundingTx, err := r.fetchFundingTx(&channelID)
 		if err != nil {
+			// In order to ensure we don't errnosuly mark a channel as
+			// a zmobie due to an RPC failure, we'll attempt to string
+			// match for the relevant errors.
+			//
+			// * btcd:
+			//    * https://github.com/btcsuite/btcd/blob/master/rpcserver.go#L1316
+			//    * https://github.com/btcsuite/btcd/blob/master/rpcserver.go#L1086
+			// * bitcoind:
+			//    * https://github.com/bitcoin/bitcoin/blob/7fcf53f7b4524572d1d0c9a5fdc388e87eb02416/src/rpc/blockchain.cpp#L770
+			//     * https://github.com/bitcoin/bitcoin/blob/7fcf53f7b4524572d1d0c9a5fdc388e87eb02416/src/rpc/blockchain.cpp#L954
+			switch {
+			case strings.Contains(err.Error(), "not found"):
+				fallthrough
+
+			case strings.Contains(err.Error(), "out of range"):
+				// If the funding transaction isn't found at all, then
+				// we'll mark the edge itself as a zombie so we don't
+				// continue to request it. We use the "zero key" for
+				// both node pubkeys so this edge can't be resurrected.
+				var zeroKey [33]byte
+				zErr := r.cfg.Graph.MarkEdgeZombie(
+					msg.ChannelID, zeroKey, zeroKey,
+				)
+				if zErr != nil {
+					return fmt.Errorf("unable to mark spent "+
+						"chan(id=%v) as a zombie: %w", msg.ChannelID,
+						zErr)
+				}
+			default:
+			}
+
 			return newErrf(ErrNoFundingTransaction, "unable to "+
 				"fetch funding tx for chan_id=%v: %v",
 				msg.ChannelID, err)
@@ -1355,6 +1388,22 @@ func (r *ChannelRouter) processUpdate(msg interface{},
 			r.quit,
 		)
 		if err != nil {
+			// If we fail validation of the UTXO here, then we'll
+			// mark the channel as a zombie as otherwise, we may
+			// continue to continue to request it. We use the "zero
+			// key" for both node pubkeys so this edge can't be
+			// resurrected.
+			if errors.Is(err, btcwallet.ErrOutputSpent) {
+				var zeroKey [33]byte
+				zErr := r.cfg.Graph.MarkEdgeZombie(
+					msg.ChannelID, zeroKey, zeroKey,
+				)
+				if zErr != nil {
+					return fmt.Errorf("unable to mark spent "+
+						"chan(id=%v) as a zombie: %w", msg.ChannelID,
+						zErr)
+				}
+			}
 
 			return newErrf(ErrChannelSpent, "unable to fetch utxo "+
 				"for chan_id=%v, chan_point=%v: %v",
diff --git a/routing/router_test.go b/routing/router_test.go
index c530daec..b5de51b9 100644
--- a/routing/router_test.go
+++ b/routing/router_test.go
@@ -3136,3 +3136,115 @@ func TestBuildRoute(t *testing.T) {
 		t.Fatalf("unexpected no channel error node")
 	}
 }
+
+// edgeCreationModifier is an enum-like type used to modify steps that are
+// skipped when creating a channel in the test context.
+type edgeCreationModifier uint8
+
+const (
+	// edgeCreationNoFundingTx is used to skip adding the funding
+	// transaction of an edge to the chain.
+	edgeCreationNoFundingTx edgeCreationModifier = iota
+
+	// edgeCreationNoUTXO is used to skip adding the UTXO of a channel to
+	// the UTXO set.
+	edgeCreationNoUTXO
+)
+
+// newChannelEdgeInfo is a helper function used to create a new channel edge,
+// possibly skipping adding it to parts of the chain/state as well.
+func newChannelEdgeInfo(ctx *testCtx, fundingHeight uint32,
+	ecm edgeCreationModifier) (*channeldb.ChannelEdgeInfo, error) {
+
+	node1, err := createTestNode()
+	if err != nil {
+		return nil, err
+	}
+	node2, err := createTestNode()
+	if err != nil {
+		return nil, err
+	}
+
+	fundingTx, _, chanID, err := createChannelEdge(
+		ctx, bitcoinKey1.SerializeCompressed(),
+		bitcoinKey2.SerializeCompressed(), 100, fundingHeight,
+	)
+	if err != nil {
+		return nil, fmt.Errorf("unable to create edge: %w", err)
+	}
+
+	edge := &channeldb.ChannelEdgeInfo{
+		ChannelID:     chanID.ToUint64(),
+		NodeKey1Bytes: node1.PubKeyBytes,
+		NodeKey2Bytes: node2.PubKeyBytes,
+	}
+	copy(edge.BitcoinKey1Bytes[:], bitcoinKey1.SerializeCompressed())
+	copy(edge.BitcoinKey2Bytes[:], bitcoinKey2.SerializeCompressed())
+
+	if ecm == edgeCreationNoFundingTx {
+		return edge, nil
+	}
+
+	fundingBlock := &wire.MsgBlock{
+		Transactions: []*wire.MsgTx{fundingTx},
+	}
+	ctx.chain.addBlock(fundingBlock, chanID.BlockHeight, chanID.BlockHeight)
+
+	if ecm == edgeCreationNoUTXO {
+		ctx.chain.delUtxo(wire.OutPoint{
+			Hash: fundingTx.TxHash(),
+		})
+	}
+
+	return edge, nil
+}
+
+func assertChanChainRejection(t *testing.T, ctx *testCtx,
+	edge *channeldb.ChannelEdgeInfo, failCode errorCode) {
+
+	t.Helper()
+
+	err := ctx.router.AddEdge(edge)
+	if !IsError(err, failCode) {
+		t.Fatalf("validation should have failed: %v", err)
+	}
+
+	// This channel should now be present in the zombie channel index.
+	_, _, _, isZombie, err := ctx.graph.HasChannelEdge(
+		edge.ChannelID,
+	)
+	require.Nil(t, err)
+	require.True(t, isZombie, "edge should be marked as zombie")
+}
+
+// TestChannelOnChainRejectionZombie tests that if we fail validating a channel
+// due to some sort of on-chain rejection (no funding transaction, or invalid
+// UTXO), then we'll mark the channel as a zombie.
+func TestChannelOnChainRejectionZombie(t *testing.T) {
+	t.Parallel()
+
+	ctx, cleanup, err := createTestCtxSingleNode(0)
+	if err != nil {
+		t.Fatal(err)
+	}
+	defer cleanup()
+
+	// To start,  we'll make an edge for the channel, but we won't add the
+	// funding transaction to the mock blockchain, which should cause the
+	// validation to fail below.
+	edge, err := newChannelEdgeInfo(ctx, 1, edgeCreationNoFundingTx)
+	require.Nil(t, err)
+
+	// We expect this to fail as the transaction isn't present in the
+	// chain (nor the block).
+	assertChanChainRejection(t, ctx, edge, ErrNoFundingTransaction)
+
+	// Next, we'll make another channel edge, but actually add it to the
+	// graph this time.
+	edge, err = newChannelEdgeInfo(ctx, 2, edgeCreationNoUTXO)
+	require.Nil(t, err)
+
+	// Instead now, we'll remove it from the set of UTXOs which should
+	// cause the spentness validation to fail.
+	assertChanChainRejection(t, ctx, edge, ErrChannelSpent)
+}