diff --git a/src/prefect/task_engine.py b/src/prefect/task_engine.py
index 70c4718e687f..01bb93b6f573 100644
--- a/src/prefect/task_engine.py
+++ b/src/prefect/task_engine.py
@@ -126,8 +126,7 @@ def state(self) -> State:
             raise ValueError("Task run is not set")
         return self.task_run.state
 
-    @property
-    def can_retry(self) -> bool:
+    def can_retry(self, exc: Exception) -> bool:
         retry_condition: Optional[
             Callable[[Task[P, Coroutine[Any, Any, R]], TaskRun, State], bool]
         ] = self.task.retry_condition_fn
@@ -138,9 +137,19 @@ def can_retry(self) -> bool:
                 f"Running `retry_condition_fn` check {retry_condition!r} for task"
                 f" {self.task.name!r}"
             )
-            return not retry_condition or retry_condition(
-                self.task, self.task_run, self.state
+            state = Failed(
+                data=exc,
+                message=f"Task run encountered unexpected exception: {repr(exc)}",
             )
+            if inspect.iscoroutinefunction(retry_condition):
+                should_retry = run_coro_as_sync(
+                    retry_condition(self.task, self.task_run, state)
+                )
+            elif inspect.isfunction(retry_condition):
+                should_retry = retry_condition(self.task, self.task_run, state)
+            else:
+                should_retry = not retry_condition
+            return should_retry
         except Exception:
             self.logger.error(
                 (
@@ -418,7 +427,7 @@ def handle_retry(self, exc: Exception) -> bool:
           - If the task has a retry delay, place in AwaitingRetry state with a delayed scheduled time.
         - If the task has no retries left, or the retry condition is not met, return False.
         """
-        if self.retries < self.task.retries and self.can_retry:
+        if self.retries < self.task.retries and self.can_retry(exc):
             if self.task.retry_delay_seconds:
                 delay = (
                     self.task.retry_delay_seconds[
diff --git a/tests/test_task_engine.py b/tests/test_task_engine.py
index c69bf8b8a7e2..1e003eaac834 100644
--- a/tests/test_task_engine.py
+++ b/tests/test_task_engine.py
@@ -935,6 +935,92 @@ async def test_flow():
             "Completed",
         ]
 
+    async def test_task_passes_failed_state_to_retry_fn(self):
+        mock = MagicMock()
+        exc = SyntaxError("oops")
+        handler_mock = MagicMock()
+
+        async def handler(task, task_run, state):
+            handler_mock()
+            assert state.is_failed()
+            try:
+                await state.result()
+            except SyntaxError:
+                return True
+            return False
+
+        @task(retries=3, retry_condition_fn=handler)
+        async def flaky_function():
+            mock()
+            if mock.call_count == 2:
+                return True
+            raise exc
+
+        @flow
+        async def test_flow():
+            return await flaky_function(return_state=True)
+
+        task_run_state = await test_flow()
+        task_run_id = task_run_state.state_details.task_run_id
+
+        assert task_run_state.is_completed()
+        assert await task_run_state.result() is True
+        assert mock.call_count == 2
+        assert handler_mock.call_count == 1
+
+        states = await get_task_run_states(task_run_id)
+
+        state_names = [state.name for state in states]
+        assert state_names == [
+            "Pending",
+            "Running",
+            "Retrying",
+            "Completed",
+        ]
+
+    async def test_task_passes_failed_state_to_retry_fn_sync(self):
+        mock = MagicMock()
+        exc = SyntaxError("oops")
+        handler_mock = MagicMock()
+
+        def handler(task, task_run, state):
+            handler_mock()
+            assert state.is_failed()
+            try:
+                state.result()
+            except SyntaxError:
+                return True
+            return False
+
+        @task(retries=3, retry_condition_fn=handler)
+        def flaky_function():
+            mock()
+            if mock.call_count == 2:
+                return True
+            raise exc
+
+        @flow
+        def test_flow():
+            return flaky_function(return_state=True)
+
+        task_run_state = test_flow()
+        task_run_id = task_run_state.state_details.task_run_id
+
+        assert task_run_state.is_completed()
+        assert await task_run_state.result() is True
+        assert mock.call_count == 2
+        assert handler_mock.call_count == 1
+
+        states = await get_task_run_states(task_run_id)
+
+        state_names = [state.name for state in states]
+        assert state_names == [
+            "Pending",
+            "Running",
+            "Retrying",
+            "Completed",
+        ]
+
     async def test_task_retries_receive_latest_task_run_in_context(self):
         state_names: List[str] = []
         run_counts = []