diff --git a/packages/transaction-controller/CHANGELOG.md b/packages/transaction-controller/CHANGELOG.md
index a3979be382f..a51036eb8c5 100644
--- a/packages/transaction-controller/CHANGELOG.md
+++ b/packages/transaction-controller/CHANGELOG.md
@@ -17,6 +17,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Bump `@metamask/remote-feature-flag-controller` from `^3.0.0` to `^3.1.0` ([#7519](https://github.com/MetaMask/core/pull/7519))
 - Bump `@metamask/network-controller` from `^27.0.0` to `^27.1.0` ([#7534](https://github.com/MetaMask/core/pull/7534))
 - Bump `@metamask/controller-utils` from `^11.16.0` to `^11.17.0` ([#7534](https://github.com/MetaMask/core/pull/7534))
+- Update error message for failed on-chain transactions in `PendingTransactionTracker` ([#7552](https://github.com/MetaMask/core/pull/7552))
 
 ### Fixed
 
diff --git a/packages/transaction-controller/src/helpers/PendingTransactionTracker.test.ts b/packages/transaction-controller/src/helpers/PendingTransactionTracker.test.ts
index 883a8583f67..74630faeead 100644
--- a/packages/transaction-controller/src/helpers/PendingTransactionTracker.test.ts
+++ b/packages/transaction-controller/src/helpers/PendingTransactionTracker.test.ts
@@ -478,7 +478,7 @@ describe('PendingTransactionTracker', () => {
           expect(listener).toHaveBeenCalledTimes(1);
           expect(listener).toHaveBeenCalledWith(
             TRANSACTION_SUBMITTED_MOCK,
-            new Error('Transaction dropped or replaced'),
+            new Error('Transaction failed on-chain'),
           );
         });
       });
@@ -1255,7 +1255,7 @@ describe('PendingTransactionTracker', () => {
       expect(listener).toHaveBeenCalledTimes(1);
       expect(listener).toHaveBeenCalledWith(
         transactionMeta,
-        new Error('Transaction dropped or replaced'),
+        new Error('Transaction failed on-chain'),
       );
     });
 
diff --git a/packages/transaction-controller/src/helpers/PendingTransactionTracker.ts b/packages/transaction-controller/src/helpers/PendingTransactionTracker.ts
index fb1673eaeea..929ea11e1ea 100644
--- a/packages/transaction-controller/src/helpers/PendingTransactionTracker.ts
+++ b/packages/transaction-controller/src/helpers/PendingTransactionTracker.ts
@@ -445,10 +445,7 @@ export class PendingTransactionTracker {
       if (isFailure) {
         this.#log('Transaction receipt has failed status');
 
-        this.#failTransaction(
-          txMeta,
-          new Error('Transaction dropped or replaced'),
-        );
+        this.#failTransaction(txMeta, new Error('Transaction failed on-chain'));
 
         return;
       }