diff --git a/config/src/config/consensus_observer_config.rs b/config/src/config/consensus_observer_config.rs
index e55f82bf052d53..722671493c5d9a 100644
--- a/config/src/config/consensus_observer_config.rs
+++ b/config/src/config/consensus_observer_config.rs
@@ -49,6 +49,8 @@ pub struct ConsensusObserverConfig {
 
     /// Duration (in milliseconds) to require state sync to synchronize when in fallback mode
     pub observer_fallback_duration_ms: u64,
+    /// Duration (in milliseconds) we'll wait on startup before considering fallback mode
+    pub observer_fallback_startup_period_ms: u64,
     /// Duration (in milliseconds) we'll wait for syncing progress before entering fallback mode
     pub observer_fallback_sync_threshold_ms: u64,
 }
@@ -70,6 +72,7 @@ impl Default for ConsensusObserverConfig {
             subscription_peer_change_interval_ms: 60_000,      // 1 minute
             subscription_refresh_interval_ms: 300_000,         // 5 minutes
             observer_fallback_duration_ms: 600_000,            // 10 minutes
+            observer_fallback_startup_period_ms: 90_000,       // 90 seconds
             observer_fallback_sync_threshold_ms: 30_000,       // 30 seconds
         }
     }
diff --git a/consensus/src/consensus_observer/observer/fallback_manager.rs b/consensus/src/consensus_observer/observer/fallback_manager.rs
index 2b7bee64b424ee..9fd58a644f8721 100644
--- a/consensus/src/consensus_observer/observer/fallback_manager.rs
+++ b/consensus/src/consensus_observer/observer/fallback_manager.rs
@@ -22,6 +22,9 @@ pub struct ObserverFallbackManager {
     // The highest synced version we've seen from storage, along with the time at which it was seen
     highest_synced_version_and_time: (u64, Instant),
 
+    // The time at which the fallback manager started running
+    start_time: Instant,
+
     // The time service (used to check the storage update time)
     time_service: TimeService,
 }
@@ -40,6 +43,7 @@ impl ObserverFallbackManager {
             consensus_observer_config,
             db_reader,
             highest_synced_version_and_time: (0, time_now),
+            start_time: time_now,
             time_service,
         }
     }
@@ -47,8 +51,17 @@ impl ObserverFallbackManager {
     /// Verifies that the DB is continuing to sync and commit new data.
     /// If not, an error is returned, indicating that we should enter fallback mode.
     pub fn check_syncing_progress(&mut self) -> Result<(), Error> {
-        // Get the current time and synced version from storage
+        // If we're still within the startup period, we don't need to verify progress
         let time_now = self.time_service.now();
+        let startup_period = Duration::from_millis(
+            self.consensus_observer_config
+                .observer_fallback_startup_period_ms,
+        );
+        if time_now.duration_since(self.start_time) < startup_period {
+            return Ok(()); // We're still in the startup period
+        }
+
+        // Otherwise, fetch the synced version from storage
         let current_synced_version =
             self.db_reader
                 .get_latest_ledger_info_version()
@@ -70,18 +83,18 @@ impl ObserverFallbackManager {
                     .observer_fallback_sync_threshold_ms,
             );
             if duration_since_highest_seen > fallback_threshold {
-                return Err(Error::ObserverProgressStopped(format!(
+                Err(Error::ObserverProgressStopped(format!(
                     "Consensus observer is not making progress! Highest synced version: {}, elapsed: {:?}",
                     highest_synced_version, duration_since_highest_seen
-                )));
+                )))
+            } else {
+                Ok(()) // We haven't passed the fallback threshold yet
             }
-            return Ok(()); // We haven't passed the fallback threshold yet
+        } else {
+            // The synced version has increased. Update the highest synced version and time.
+            self.highest_synced_version_and_time = (current_synced_version, time_now);
+            Ok(())
         }
-
-        // Update the highest synced version and time
-        self.highest_synced_version_and_time = (current_synced_version, time_now);
-
-        Ok(())
     }
 
     /// Resets the syncing progress to the latest synced ledger info and current time
@@ -119,7 +132,9 @@ mod test {
     fn test_check_syncing_progress() {
         // Create a consensus observer config
         let observer_fallback_sync_threshold_ms = 10_000;
+        let observer_fallback_startup_period_ms = 0; // Disable the startup period
         let consensus_observer_config = ConsensusObserverConfig {
+            observer_fallback_startup_period_ms,
             observer_fallback_sync_threshold_ms,
             ..ConsensusObserverConfig::default()
         };
@@ -193,6 +208,94 @@ mod test {
         );
     }
 
+    #[test]
+    fn test_check_syncing_progress_startup_period() {
+        // Create a consensus observer config
+        let observer_fallback_sync_threshold_ms = 10_000;
+        let observer_fallback_startup_period_ms = 90_0000;
+        let consensus_observer_config = ConsensusObserverConfig {
+            observer_fallback_startup_period_ms,
+            observer_fallback_sync_threshold_ms,
+            ..ConsensusObserverConfig::default()
+        };
+
+        // Create a mock DB reader with expectations
+        let initial_version = 0;
+        let first_synced_version = 1;
+        let second_synced_version = 2;
+        let mut mock_db_reader = MockDatabaseReader::new();
+        mock_db_reader
+            .expect_get_latest_ledger_info_version()
+            .returning(move || Ok(first_synced_version))
+            .times(1); // Only allow one call for the first version
+        mock_db_reader
+            .expect_get_latest_ledger_info_version()
+            .returning(move || Ok(second_synced_version)); // Allow multiple calls for the second version
+
+        // Create a new fallback manager
+        let time_service = TimeService::mock();
+        let mut fallback_manager = ObserverFallbackManager::new(
+            consensus_observer_config,
+            Arc::new(mock_db_reader),
+            time_service.clone(),
+        );
+
+        // Verify that syncing progress is not checked during the startup period
+        let mock_time_service = time_service.into_mock();
+        let time_now = mock_time_service.now();
+        for _ in 0..5 {
+            // Elapse enough time to bypass the fallback threshold
+            mock_time_service.advance(Duration::from_millis(
+                observer_fallback_sync_threshold_ms + 1,
+            ));
+
+            // Verify that the DB is still making sync progress (we're still in the startup period)
+            assert!(fallback_manager.check_syncing_progress().is_ok());
+            assert_eq!(
+                fallback_manager.highest_synced_version_and_time,
+                (initial_version, time_now)
+            );
+        }
+
+        // Elapse enough time to bypass the startup period
+        mock_time_service.advance(Duration::from_millis(observer_fallback_startup_period_ms + 1));
+
+        // Verify that the DB is making sync progress and that the highest synced version is updated
+        assert!(fallback_manager.check_syncing_progress().is_ok());
+        assert_eq!(
+            fallback_manager.highest_synced_version_and_time,
+            (first_synced_version, mock_time_service.now())
+        );
+
+        // Elapse enough time to bypass the fallback threshold
+        mock_time_service.advance(Duration::from_millis(
+            observer_fallback_sync_threshold_ms + 1,
+        ));
+
+        // Verify that the DB is still making sync progress (the next DB version is higher)
+        let time_now = mock_time_service.now();
+        assert!(fallback_manager.check_syncing_progress().is_ok());
+        assert_eq!(
+            fallback_manager.highest_synced_version_and_time,
+            (second_synced_version, time_now)
+        );
+
+        // Elapse enough time to bypass the fallback threshold
+        mock_time_service.advance(Duration::from_millis(
+            observer_fallback_sync_threshold_ms + 1,
+        ));
+
+        // Verify that the DB is not making sync progress and that fallback mode should be entered
+        assert_matches!(
+            fallback_manager.check_syncing_progress(),
+            Err(Error::ObserverProgressStopped(_))
+        );
+        assert_eq!(
+            fallback_manager.highest_synced_version_and_time,
+            (second_synced_version, time_now)
+        );
+    }
+
     #[test]
     fn test_reset_syncing_progress() {
         // Create a new fallback manager