diff --git a/sdk/storage/Azure.Storage.DataMovement/src/TransferManager.cs b/sdk/storage/Azure.Storage.DataMovement/src/TransferManager.cs
index f3a1c5aa0e2ab..db68b79157743 100644
--- a/sdk/storage/Azure.Storage.DataMovement/src/TransferManager.cs
+++ b/sdk/storage/Azure.Storage.DataMovement/src/TransferManager.cs
@@ -356,24 +356,38 @@ public virtual async Task<DataTransfer> StartTransferAsync(
             transferOptions ??= new DataTransferOptions();
 
             string transferId = _generateTransferId();
-            await _checkpointer.AddNewJobAsync(
-                transferId,
-                sourceResource,
-                destinationResource,
-                cancellationToken).ConfigureAwait(false);
-
-            // TODO: if the below fails for any reason, this job will still be in the checkpointer.
-            // That seems not desirable.
-
-            DataTransfer dataTransfer = await BuildAndAddTransferJobAsync(
-                sourceResource,
-                destinationResource,
-                transferOptions,
-                transferId,
-                false,
-                cancellationToken).ConfigureAwait(false);
-
-            return dataTransfer;
+            try
+            {
+                await _checkpointer.AddNewJobAsync(
+                    transferId,
+                    sourceResource,
+                    destinationResource,
+                    cancellationToken).ConfigureAwait(false);
+
+                DataTransfer dataTransfer = await BuildAndAddTransferJobAsync(
+                    sourceResource,
+                    destinationResource,
+                    transferOptions,
+                    transferId,
+                    false,
+                    cancellationToken).ConfigureAwait(false);
+
+                return dataTransfer;
+            }
+            catch (Exception ex)
+            {
+                // cleanup any state for a job that didn't even start
+                try
+                {
+                    _dataTransfers.Remove(transferId);
+                    await _checkpointer.TryRemoveStoredTransferAsync(transferId, cancellationToken).ConfigureAwait(false);
+                }
+                catch (Exception cleanupEx)
+                {
+                    throw new AggregateException(ex, cleanupEx);
+                }
+                throw;
+            }
         }
 
         private async Task<DataTransfer> BuildAndAddTransferJobAsync(
diff --git a/sdk/storage/Azure.Storage.DataMovement/tests/TransferManagerTests.cs b/sdk/storage/Azure.Storage.DataMovement/tests/TransferManagerTests.cs
index 18d972f649cc3..0181a0221a567 100644
--- a/sdk/storage/Azure.Storage.DataMovement/tests/TransferManagerTests.cs
+++ b/sdk/storage/Azure.Storage.DataMovement/tests/TransferManagerTests.cs
@@ -14,6 +14,7 @@
 using Azure.Storage.DataMovement.Tests.Shared;
 using Moq;
 using NUnit.Framework;
+using NUnit.Framework.Constraints;
 
 namespace Azure.Storage.DataMovement.Tests;
 
@@ -285,6 +286,7 @@ public async Task BasicContainerTransfer(
     [Combinatorial]
     public async Task TransferFailAtQueue(
         [Values(0, 1)] int failAt,
+        [Values(true, false)] bool throwCleanup,
         [Values(true, false)] bool isContainer)
     {
         Uri srcUri = new("file:///foo/bar");
@@ -301,19 +303,34 @@ public async Task TransferFailAtQueue(
             = GetBasicSetupResources(isContainer, srcUri, dstUri);
 
         Exception expectedException = new();
-        switch (failAt)
+        Exception cleanupException = throwCleanup ? new() : null;
+        List<string> capturedTransferIds = new();
         {
-            case 0:
-                jobBuilder.Setup(b => b.BuildJobAsync(It.IsAny<StorageResource>(), It.IsAny<StorageResource>(),
-                    It.IsAny<DataTransferOptions>(), It.IsAny<ITransferCheckpointer>(), It.IsAny<string>(),
-                    It.IsAny<bool>(), It.IsAny<CancellationToken>())
-                ).Throws(expectedException);
-                break;
-            case 1:
-                checkpointer.Setup(c => c.AddNewJobAsync(It.IsAny<string>(), It.IsAny<StorageResource>(),
-                    It.IsAny<StorageResource>(), It.IsAny<CancellationToken>())
-                ).Throws(expectedException);
-                break;
+            var checkpointerAddJob = checkpointer.Setup(c => c.AddNewJobAsync(Capture.In(capturedTransferIds),
+                It.IsAny<StorageResource>(), It.IsAny<StorageResource>(), It.IsAny<CancellationToken>()));
+            var checkpointerRemoveJob = checkpointer.Setup(c => c.TryRemoveStoredTransferAsync(
+                It.IsAny<string>(), It.IsAny<CancellationToken>()));
+
+            switch (failAt)
+            {
+                case 0:
+                    jobBuilder.Setup(b => b.BuildJobAsync(It.IsAny<StorageResource>(), It.IsAny<StorageResource>(),
+                        It.IsAny<DataTransferOptions>(), It.IsAny<ITransferCheckpointer>(), It.IsAny<string>(),
+                        It.IsAny<bool>(), It.IsAny<CancellationToken>())
+                    ).Throws(expectedException);
+                    break;
+                case 1:
+                    checkpointerAddJob.Throws(expectedException);
+                    break;
+            }
+            if (throwCleanup)
+            {
+                checkpointerRemoveJob.Throws(cleanupException);
+            }
+            else
+            {
+                checkpointerRemoveJob.Returns(Task.FromResult(true));
+            }
         }
 
         await using TransferManager transferManager = new(
@@ -325,15 +342,21 @@ public async Task TransferFailAtQueue(
             default);
 
         DataTransfer transfer = null;
-
-        Assert.That(async () => transfer = await transferManager.StartTransferAsync(
-            srcResource,
-            dstResource), Throws.Exception.EqualTo(expectedException));
+        IConstraint throwsConstraint = throwCleanup
+            ? Throws.TypeOf<AggregateException>().And.Property(nameof(AggregateException.InnerExceptions))
+                .EquivalentTo(new List<Exception>() { expectedException, cleanupException })
+            : Throws.Exception.EqualTo(expectedException);
+        Assert.That(async () => transfer = await transferManager.StartTransferAsync(srcResource, dstResource),
+            throwsConstraint);
 
         Assert.That(transfer, Is.Null);
 
-        // TODO determine if checkpointer still has the job tracked even though it failed to queue (it shouldn't)
-        //      need checkpointer API refactor for this
+        Assert.That(capturedTransferIds.Count, Is.EqualTo(1));
+        checkpointer.Verify(c => c.AddNewJobAsync(capturedTransferIds.First(), It.IsAny<StorageResource>(),
+            It.IsAny<StorageResource>(), It.IsAny<CancellationToken>()), Times.Once);
+        checkpointer.Verify(c => c.TryRemoveStoredTransferAsync(capturedTransferIds.First(),
+            It.IsAny<CancellationToken>()), Times.Once);
+        checkpointer.VerifyNoOtherCalls();
     }
 
     [Test]