--- a/services/sync/modules/browserid_identity.js
+++ b/services/sync/modules/browserid_identity.js
@@ -250,16 +250,21 @@ this.BrowserIDManager.prototype = {
     // new one.
     this._token = null;
   },
 
   observe(subject, topic, data) {
     this._log.debug("observed " + topic);
     switch (topic) {
     case fxAccountsCommon.ONLOGIN_NOTIFICATION: {
+      // If our existing Sync state is that we needed to reauth, clear that
+      // state now - it will get reset back if a problem persists.
+      if (Weave.Status.login == LOGIN_FAILED_LOGIN_REJECTED) {
+        Weave.Status.login = LOGIN_SUCCEEDED;
+      }
       // This should only happen if we've been initialized without a current
       // user - otherwise we'd have seen the LOGOUT notification and been
       // thrown away.
       // The exception is when we've initialized with a user that needs to
       // reauth with the server - in that case we will also get here, but
       // should have the same identity, and so we pass `false` into
       // initializeWithCurrentIdentity so that we won't do a full sync for our
       // first sync if we can avoid it.