diff --git a/changelog/fix-8334-leftover-onboarding-sandbox-mode b/changelog/fix-8334-leftover-onboarding-sandbox-mode
new file mode 100644
index 00000000000..e5891e26fe5
--- /dev/null
+++ b/changelog/fix-8334-leftover-onboarding-sandbox-mode
@@ -0,0 +1,5 @@
+Significance: patch
+Type: fix
+Comment: Prevent leftover sandbox mode onboarding and allow for live onboarding on subsequent retries.
+
+
diff --git a/includes/class-wc-payments-account.php b/includes/class-wc-payments-account.php
index 57c63333962..215b48149a6 100644
--- a/includes/class-wc-payments-account.php
+++ b/includes/class-wc-payments-account.php
@@ -1085,6 +1085,14 @@ public function maybe_handle_onboarding() {
 			) ) {
 				// Redirect non-onboarded account to the onboarding flow, otherwise to payments overview page.
 				if ( ! $this->is_stripe_connected() ) {
+					$should_onboard_in_test_mode = isset( $_GET['test_mode'] ) ? boolval( wc_clean( wp_unslash( $_GET['test_mode'] ) ) ) : false;
+					if ( ! $should_onboard_in_test_mode && WC_Payments_Onboarding_Service::is_test_mode_enabled() ) {
+						// If there is no test mode in the URL informing us to onboard in test mode,
+						// but the onboarding test mode is enabled in our DB, we should disable it.
+						// This is most likely a leftover from a previous onboarding attempt.
+						WC_Payments_Onboarding_Service::set_test_mode( false );
+					}
+
 					$this->redirect_to_onboarding_flow_page( $source );
 				} else {
 					// Accounts with Stripe account connected will be redirected to the overview page.