diff --git a/drivers/vfio/pci/pds/pci_drv.c b/drivers/vfio/pci/pds/pci_drv.c
index b0781d9f4246..b155ac9b98ae 100644
--- a/drivers/vfio/pci/pds/pci_drv.c
+++ b/drivers/vfio/pci/pds/pci_drv.c
@@ -20,6 +20,104 @@
 #define PDS_VFIO_DRV_DESCRIPTION	"AMD/Pensando VFIO Device Driver"
 #define PCI_VENDOR_ID_PENSANDO		0x1dd8
 
+static void
+pds_vfio_recovery_work(struct work_struct *work)
+{
+	struct pds_vfio_pci_device *pds_vfio =
+		container_of(work, struct pds_vfio_pci_device, work);
+	bool deferred_reset_needed = false;
+
+	/* Documentation states that the kernel migration driver must not
+	 * generate asynchronous device state transitions outside of
+	 * manipulation by the user or the VFIO_DEVICE_RESET ioctl.
+	 *
+	 * Since recovery is an asynchronous event received from the device,
+	 * initiate a deferred reset. Only issue the deferred reset if a
+	 * migration is in progress, which will cause the next step of the
+	 * migration to fail. Also, if the device is in a state that will
+	 * be set to VFIO_DEVICE_STATE_RUNNING on the next action (i.e. VM is
+	 * shutdown and device is in VFIO_DEVICE_STATE_STOP) as that will clear
+	 * the VFIO_DEVICE_STATE_ERROR when the VM starts back up.
+	 */
+	mutex_lock(&pds_vfio->state_mutex);
+	if ((pds_vfio->state != VFIO_DEVICE_STATE_RUNNING &&
+	     pds_vfio->state != VFIO_DEVICE_STATE_ERROR) ||
+	    (pds_vfio->state == VFIO_DEVICE_STATE_RUNNING &&
+	     pds_vfio_dirty_is_enabled(pds_vfio)))
+		deferred_reset_needed = true;
+	mutex_unlock(&pds_vfio->state_mutex);
+
+	/* On the next user initiated state transition, the device will
+	 * transition to the VFIO_DEVICE_STATE_ERROR. At this point it's the user's
+	 * responsibility to reset the device.
+	 *
+	 * If a VFIO_DEVICE_RESET is requested post recovery and before the next
+	 * state transition, then the deferred reset state will be set to
+	 * VFIO_DEVICE_STATE_RUNNING.
+	 */
+	if (deferred_reset_needed)
+		pds_vfio_deferred_reset(pds_vfio, VFIO_DEVICE_STATE_ERROR);
+}
+
+static int
+pds_vfio_pci_notify_handler(struct notifier_block *nb,
+			    unsigned long ecode,
+			    void *data)
+{
+	struct pds_vfio_pci_device *pds_vfio = container_of(nb,
+							    struct pds_vfio_pci_device,
+							    nb);
+	union pds_core_notifyq_comp *event = data;
+
+	dev_info(pds_vfio->coredev, "%s: event code %lu\n", __func__, ecode);
+
+	/* We don't need to do anything for RESET state==0 as there is no notify
+	 * or feedback mechanism available, and it is possible that we won't
+	 * even see a state==0 event.
+	 *
+	 * Any requests from VFIO while state==0 will fail, which will return
+	 * error and may cause migration to fail.
+	 */
+	if (ecode == PDS_EVENT_RESET) {
+		dev_info(pds_vfio->coredev, "%s: PDS_EVENT_RESET event received, state==%d\n",
+			 __func__, event->reset.state);
+		if (event->reset.state == 1)
+			schedule_work(&pds_vfio->work);
+	}
+
+	return 0;
+}
+
+static int
+pds_vfio_pci_register_event_handler(struct pds_vfio_pci_device *pds_vfio)
+{
+	struct notifier_block *nb = &pds_vfio->nb;
+	int err;
+
+	if (!nb->notifier_call) {
+		nb->notifier_call = pds_vfio_pci_notify_handler;
+		err = pdsc_register_notify(nb);
+		if (err) {
+			nb->notifier_call = NULL;
+			dev_err(pds_vfio->coredev, "failed to register pds event handler: %pe\n",
+				ERR_PTR(err));
+			return -EINVAL;
+		}
+		dev_dbg(pds_vfio->coredev, "pds event handler registered\n");
+	}
+
+	return 0;
+}
+
+static void
+pds_vfio_pci_unregister_event_handler(struct pds_vfio_pci_device *pds_vfio)
+{
+	if (pds_vfio->nb.notifier_call) {
+		pdsc_unregister_notify(&pds_vfio->nb);
+		pds_vfio->nb.notifier_call = NULL;
+	}
+}
+
 static int
 pds_vfio_pci_probe(struct pci_dev *pdev,
 		   const struct pci_device_id *id)
@@ -44,14 +142,22 @@ pds_vfio_pci_probe(struct pci_dev *pdev,
 		goto out_put_vdev;
 	}
 
-	err = vfio_pci_core_register_device(&pds_vfio->vfio_coredev);
+	INIT_WORK(&pds_vfio->work, pds_vfio_recovery_work);
+	err = pds_vfio_pci_register_event_handler(pds_vfio);
 	if (err)
 		goto out_unreg_client;
 
+	err = vfio_pci_core_register_device(&pds_vfio->vfio_coredev);
+	if (err)
+		goto out_unreg_notify;
+
 	return 0;
 
+out_unreg_notify:
+	pds_vfio_pci_unregister_event_handler(pds_vfio);
 out_unreg_client:
 	pds_vfio_unregister_client_cmd(pds_vfio);
+	cancel_work_sync(&pds_vfio->work);
 out_put_vdev:
 	vfio_put_device(&pds_vfio->vfio_coredev.vdev);
 	return err;
@@ -62,6 +168,8 @@ pds_vfio_pci_remove(struct pci_dev *pdev)
 {
 	struct pds_vfio_pci_device *pds_vfio = pds_vfio_pci_drvdata(pdev);
 
+	pds_vfio_pci_unregister_event_handler(pds_vfio);
+	cancel_work_sync(&pds_vfio->work);
 	vfio_pci_core_unregister_device(&pds_vfio->vfio_coredev);
 	vfio_put_device(&pds_vfio->vfio_coredev.vdev);
 }
diff --git a/drivers/vfio/pci/pds/vfio_dev.c b/drivers/vfio/pci/pds/vfio_dev.c
index d49dea3e8cb0..720be3539a13 100644
--- a/drivers/vfio/pci/pds/vfio_dev.c
+++ b/drivers/vfio/pci/pds/vfio_dev.c
@@ -25,10 +25,17 @@ pds_vfio_state_mutex_unlock(struct pds_vfio_pci_device *pds_vfio)
 	if (pds_vfio->deferred_reset) {
 		pds_vfio->deferred_reset = false;
 		if (pds_vfio->state == VFIO_DEVICE_STATE_ERROR) {
-			pds_vfio->state = VFIO_DEVICE_STATE_RUNNING;
+			dev_dbg(&pds_vfio->pdev->dev, "Transitioning from VFIO_DEVICE_STATE_ERROR to %s\n",
+				pds_vfio_lm_state(pds_vfio->deferred_reset_state));
+			pds_vfio->state = pds_vfio->deferred_reset_state;
 			pds_vfio_put_restore_file(pds_vfio);
 			pds_vfio_put_save_file(pds_vfio);
+		} else if (pds_vfio->deferred_reset_state == VFIO_DEVICE_STATE_ERROR) {
+			dev_dbg(&pds_vfio->pdev->dev, "Transitioning from %s to VFIO_DEVICE_STATE_ERROR based on deferred_reset request\n",
+				pds_vfio_lm_state(pds_vfio->state));
+			pds_vfio->state = VFIO_DEVICE_STATE_ERROR;
 		}
+		pds_vfio->deferred_reset_state = VFIO_DEVICE_STATE_RUNNING;
 		spin_unlock(&pds_vfio->reset_lock);
 		goto again;
 	}
@@ -41,6 +48,7 @@ pds_vfio_reset(struct pds_vfio_pci_device *pds_vfio)
 {
 	spin_lock(&pds_vfio->reset_lock);
 	pds_vfio->deferred_reset = true;
+	pds_vfio->deferred_reset_state = VFIO_DEVICE_STATE_RUNNING;
 	if (!mutex_trylock(&pds_vfio->state_mutex)) {
 		spin_unlock(&pds_vfio->reset_lock);
 		return;
@@ -49,6 +57,18 @@ pds_vfio_reset(struct pds_vfio_pci_device *pds_vfio)
 	pds_vfio_state_mutex_unlock(pds_vfio);
 }
 
+void
+pds_vfio_deferred_reset(struct pds_vfio_pci_device *pds_vfio,
+			enum vfio_device_mig_state reset_state)
+{
+	dev_info(&pds_vfio->pdev->dev, "Requesting deferred_reset to state %s\n",
+		 pds_vfio_lm_state(reset_state));
+	spin_lock(&pds_vfio->reset_lock);
+	pds_vfio->deferred_reset = true;
+	pds_vfio->deferred_reset_state = reset_state;
+	spin_unlock(&pds_vfio->reset_lock);
+}
+
 static struct file *
 pds_vfio_set_device_state(struct vfio_device *vdev,
 			  enum vfio_device_mig_state new_state)
@@ -59,7 +79,13 @@ pds_vfio_set_device_state(struct vfio_device *vdev,
 	struct file *res = NULL;
 
 	mutex_lock(&pds_vfio->state_mutex);
-	while (new_state != pds_vfio->state) {
+	/* only way to transition out of VFIO_DEVICE_STATE_ERROR is via
+	 * VFIO_DEVICE_RESET, so prevent the state machine from running since
+	 * vfio_mig_get_next_state() will throw a WARN_ON() when transitioning
+	 * from VFIO_DEVICE_STATE_ERROR to any other state
+	 */
+	while (pds_vfio->state != VFIO_DEVICE_STATE_ERROR &&
+	       new_state != pds_vfio->state) {
 		enum vfio_device_mig_state next_state;
 
 		int err = vfio_mig_get_next_state(vdev, pds_vfio->state,
@@ -81,6 +107,9 @@ pds_vfio_set_device_state(struct vfio_device *vdev,
 		}
 	}
 	pds_vfio_state_mutex_unlock(pds_vfio);
+	/* still waiting on a deferred_reset */
+	if (pds_vfio->state == VFIO_DEVICE_STATE_ERROR)
+		res = ERR_PTR(-EIO);
 
 	return res;
 }
@@ -165,6 +194,7 @@ pds_vfio_open_device(struct vfio_device *vdev)
 	dev_dbg(&pds_vfio->pdev->dev, "%s: %s => VFIO_DEVICE_STATE_RUNNING\n",
 		__func__, pds_vfio_lm_state(pds_vfio->state));
 	pds_vfio->state = VFIO_DEVICE_STATE_RUNNING;
+	pds_vfio->deferred_reset_state = VFIO_DEVICE_STATE_RUNNING;
 
 	vfio_pci_core_finish_enable(&pds_vfio->vfio_coredev);
 
diff --git a/drivers/vfio/pci/pds/vfio_dev.h b/drivers/vfio/pci/pds/vfio_dev.h
index fe7e5b893a67..84824951440d 100644
--- a/drivers/vfio/pci/pds/vfio_dev.h
+++ b/drivers/vfio/pci/pds/vfio_dev.h
@@ -23,6 +23,9 @@ struct pds_vfio_pci_device {
 	enum vfio_device_mig_state state;
 	spinlock_t reset_lock; /* protect reset_done flow */
 	u8 deferred_reset;
+	enum vfio_device_mig_state deferred_reset_state;
+	struct work_struct work;
+	struct notifier_block nb;
 
 	int vf_id;
 	int pci_id;
@@ -32,5 +35,6 @@ struct pds_vfio_pci_device {
 const struct vfio_device_ops *pds_vfio_ops_info(void);
 struct pds_vfio_pci_device *pds_vfio_pci_drvdata(struct pci_dev *pdev);
 void pds_vfio_reset(struct pds_vfio_pci_device *pds_vfio);
-
+void pds_vfio_deferred_reset(struct pds_vfio_pci_device *pds_vfio,
+			     enum vfio_device_mig_state reset_state);
 #endif /* _VFIO_DEV_H_ */
