diff --git a/azurerm/resource_arm_monitor_diagnostics.go b/azurerm/resource_arm_monitor_diagnostics.go
index 4c7a5dd54be89..9a4dcd2943924 100644
--- a/azurerm/resource_arm_monitor_diagnostics.go
+++ b/azurerm/resource_arm_monitor_diagnostics.go
@@ -11,9 +11,9 @@ import (
 
 func resourceArmMonitorDiagnostics() *schema.Resource {
 	return &schema.Resource{
-		Create: resourceArmMonitorDiagnosticsCreate,
+		Create: resourceArmMonitorDiagnosticsCreateUpdate,
 		Read:   resourceArmMonitorDiagnosticsRead,
-		Update: resourceArmMonitorDiagnosticsCreate,
+		Update: resourceArmMonitorDiagnosticsCreateUpdate,
 		Delete: resourceArmMonitorDiagnosticsDelete,
 		Importer: &schema.ResourceImporter{
 			State: schema.ImportStatePassthrough,
@@ -70,7 +70,7 @@ func resourceArmMonitorDiagnostics() *schema.Resource {
 	}
 }
 
-func resourceArmMonitorDiagnosticsCreate(d *schema.ResourceData, meta interface{}) error {
+func resourceArmMonitorDiagnosticsCreateUpdate(d *schema.ResourceData, meta interface{}) error {
 	client := meta.(*ArmClient).monitorDiagnosticSettingsClient
 	ctx := meta.(*ArmClient).StopContext
 	log.Printf("[INFO] preparing arguments for Azure ARM Diagnostic Settings.")
diff --git a/azurerm/resource_arm_monitor_diagnostics_test.go b/azurerm/resource_arm_monitor_diagnostics_test.go
index eba9f9a5bee24..608244b0f3218 100644
--- a/azurerm/resource_arm_monitor_diagnostics_test.go
+++ b/azurerm/resource_arm_monitor_diagnostics_test.go
@@ -7,6 +7,7 @@ import (
 	"github.com/hashicorp/terraform/helper/acctest"
 	"github.com/hashicorp/terraform/helper/resource"
 	"github.com/hashicorp/terraform/terraform"
+	"github.com/terraform-providers/terraform-provider-azurerm/azurerm/utils"
 )
 
 func TestAccAzureRMMonitorDiagnostics_basic(t *testing.T) {
@@ -18,8 +19,9 @@ func TestAccAzureRMMonitorDiagnostics_basic(t *testing.T) {
 	config := testAccAzureRMMonitorDiagnostics_basic(ri, location)
 
 	resource.Test(t, resource.TestCase{
-		PreCheck:  func() { testAccPreCheck(t) },
-		Providers: testAccProviders,
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMMonitorDiagnosticsDestroy,
 		Steps: []resource.TestStep{
 			{
 				Config: config,
@@ -41,8 +43,9 @@ func TestAccAzureRMMonitorDiagnostics_complete(t *testing.T) {
 	config := testAccAzureRMMonitorDiagnostics_complete(ri, location)
 
 	resource.Test(t, resource.TestCase{
-		PreCheck:  func() { testAccPreCheck(t) },
-		Providers: testAccProviders,
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMMonitorDiagnosticsDestroy,
 		Steps: []resource.TestStep{
 			{
 				Config: config,
@@ -66,8 +69,9 @@ func TestAccAzureRMMonitorDiagnostics_update(t *testing.T) {
 	configUpdate := testAccAzureRMMonitorDiagnostics_update(ri, location)
 
 	resource.Test(t, resource.TestCase{
-		PreCheck:  func() { testAccPreCheck(t) },
-		Providers: testAccProviders,
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMMonitorDiagnosticsDestroy,
 		Steps: []resource.TestStep{
 			{
 				Config: configBasic,
@@ -78,18 +82,47 @@ func TestAccAzureRMMonitorDiagnostics_update(t *testing.T) {
 				),
 			},
 			{
-				Config:             configUpdate,
-				ExpectNonEmptyPlan: true,
+				Config: configUpdate,
+				Check: resource.ComposeTestCheckFunc(
+					testCheckAzureRMMonitorDiagnosticsExists(resourceName, objectName),
+					resource.TestCheckResourceAttr(resourceName, "disabled_settings.#", "0"),
+					resource.TestCheckResourceAttr(resourceName, "retention_days", "30"),
+				),
 			},
 		},
 	})
 }
 
+func testCheckAzureRMMonitorDiagnosticsDestroy(s *terraform.State) error {
+	conn := testAccProvider.Meta().(*ArmClient).monitorDiagnosticSettingsClient
+	ctx := testAccProvider.Meta().(*ArmClient).StopContext
+
+	for _, rs := range s.RootModule().Resources {
+		if rs.Type != "azurerm_monitor_diagnostics" {
+			continue
+		}
+
+		diagSettingName := rs.Primary.Attributes["name"]
+		targetResourceId := rs.Primary.Attributes["target_resource_id"]
+		resp, err := conn.Get(ctx, targetResourceId, diagSettingName)
+
+		if err != nil {
+			if utils.ResponseWasNotFound(resp.Response) {
+				return nil
+			}
+
+			return fmt.Errorf("Error while retrieving DiagnosticSettings %v", err)
+		}
+		return fmt.Errorf("DiagnosticSettings %s still exists", diagSettingName)
+	}
+	return nil
+}
+
 func testCheckAzureRMMonitorDiagnosticsExists(name, objectName string) resource.TestCheckFunc {
 	return func(s *terraform.State) error {
 		rs, ok := s.RootModule().Resources[name]
 		if !ok {
-			return fmt.Errorf("Not found: %s", name)
+			return fmt.Errorf("Did not find resource %s in state", name)
 		}
 
 		stateName := rs.Primary.Attributes["name"]
@@ -97,6 +130,18 @@ func testCheckAzureRMMonitorDiagnosticsExists(name, objectName string) resource.
 			return fmt.Errorf("State inconsistent, %s does not match state name %s", stateName, objectName)
 		}
 
+		conn := testAccProvider.Meta().(*ArmClient).monitorDiagnosticSettingsClient
+		ctx := testAccProvider.Meta().(*ArmClient).StopContext
+		targetResourceId := rs.Primary.Attributes["target_resource_id"]
+
+		resp, err := conn.Get(ctx, targetResourceId, objectName)
+		if err != nil {
+			if utils.ResponseWasNotFound(resp.Response) {
+				return fmt.Errorf("DiagnosticSettings %s did not exist for resource %s", objectName, targetResourceId)
+			}
+			return fmt.Errorf("Error while retrieving DiagnosticSettings %v", err)
+		}
+
 		return nil
 	}
 }