diff --git a/modules/store-devtools/spec/store.spec.ts b/modules/store-devtools/spec/store.spec.ts
index cd14192096..f7a5f010b3 100644
--- a/modules/store-devtools/spec/store.spec.ts
+++ b/modules/store-devtools/spec/store.spec.ts
@@ -259,7 +259,7 @@ describe('Store Devtools', () => {
       expect(getState()).toBe(2);
     });
 
-    it('should replace the reducer', () => {
+    it('should replace the reducer and preserve previous states', () => {
       store.dispatch({ type: 'INCREMENT' });
       store.dispatch({ type: 'DECREMENT' });
       store.dispatch({ type: 'INCREMENT' });
@@ -268,7 +268,21 @@ describe('Store Devtools', () => {
 
       fixture.replaceReducer(doubleCounter);
 
-      expect(getState()).toBe(2);
+      expect(getState()).toBe(1);
+    });
+
+    it('should replace the reducer and compute new state with latest reducer', () => {
+      store.dispatch({ type: 'INCREMENT' });
+      store.dispatch({ type: 'DECREMENT' });
+      store.dispatch({ type: 'INCREMENT' });
+
+      expect(getState()).toBe(1);
+
+      fixture.replaceReducer(doubleCounter);
+
+      store.dispatch({ type: 'INCREMENT' });
+
+      expect(getState()).toBe(3);
     });
 
     it('should catch and record errors', () => {
@@ -280,8 +294,8 @@ describe('Store Devtools', () => {
       store.dispatch({ type: 'INCREMENT' });
 
       let { computedStates } = fixture.getLiftedState();
-      expect(computedStates[2].error).toMatch(/ReferenceError/);
-      expect(computedStates[3].error).toMatch(
+      expect(computedStates[3].error).toMatch(/ReferenceError/);
+      expect(computedStates[4].error).toMatch(
         /Interrupted by an error up the chain/
       );
 
diff --git a/modules/store-devtools/src/reducer.ts b/modules/store-devtools/src/reducer.ts
index 54cc77b75e..76b899831d 100644
--- a/modules/store-devtools/src/reducer.ts
+++ b/modules/store-devtools/src/reducer.ts
@@ -10,6 +10,7 @@ import {
 import { difference, liftAction } from './utils';
 import * as Actions from './actions';
 import { StoreDevtoolsConfig } from './config';
+import { PerformAction } from './actions';
 
 export type InitAction = {
   readonly type: typeof INIT;
@@ -301,7 +302,6 @@ export function liftReducerWith(
         } = liftedAction.nextLiftedState);
         break;
       }
-      case UPDATE:
       case INIT: {
         // Always recompute states on hot reload and init.
         minInvalidatedStateIndex = 0;
@@ -326,6 +326,66 @@ export function liftReducerWith(
 
         break;
       }
+      case UPDATE: {
+        const stateHasErrors =
+          computedStates.filter(state => state.error).length > 0;
+
+        if (stateHasErrors) {
+          // Recompute all states
+          minInvalidatedStateIndex = 0;
+
+          if (options.maxAge && stagedActionIds.length > options.maxAge) {
+            // States must be recomputed before committing excess.
+            computedStates = recomputeStates(
+              computedStates,
+              minInvalidatedStateIndex,
+              reducer,
+              committedState,
+              actionsById,
+              stagedActionIds,
+              skippedActionIds
+            );
+
+            commitExcessActions(stagedActionIds.length - options.maxAge);
+
+            // Avoid double computation.
+            minInvalidatedStateIndex = Infinity;
+          }
+        } else {
+          if (currentStateIndex === stagedActionIds.length - 1) {
+            currentStateIndex++;
+          }
+
+          // Add a new action to only recompute state
+          const actionId = nextActionId++;
+          actionsById[actionId] = new PerformAction(liftedAction);
+          stagedActionIds = [...stagedActionIds, actionId];
+
+          minInvalidatedStateIndex = stagedActionIds.length - 1;
+
+          // States must be recomputed before committing excess.
+          computedStates = recomputeStates(
+            computedStates,
+            minInvalidatedStateIndex,
+            reducer,
+            committedState,
+            actionsById,
+            stagedActionIds,
+            skippedActionIds
+          );
+
+          currentStateIndex = minInvalidatedStateIndex;
+
+          if (options.maxAge && stagedActionIds.length > options.maxAge) {
+            commitExcessActions(stagedActionIds.length - options.maxAge);
+          }
+
+          // Avoid double computation.
+          minInvalidatedStateIndex = Infinity;
+        }
+
+        break;
+      }
       default: {
         // If the action is not recognized, it's a monitor action.
         // Optimization: a monitor action can't change history.