@@ -37,6 +37,24 @@ function lazyLoadFsSync() {
 
 let kResistStopPropagation;
 
+const kIsAIX = process.platform === 'aix';
+
+function isPathMissingForWatch(error, file) {
+  if (error.code === 'ENOENT') {
+    return true;
+  }
+  // AIX reports ENODEV when the path disappears before fs.watch() starts.
+  // Check that it is actually gone so other ENODEV errors still propagate.
+  if (!kIsAIX || error.code !== 'ENODEV') {
+    return false;
+  }
+  try {
+    return lazyLoadFsSync().statSync(file, { throwIfNoEntry: false }) === undefined;
+  } catch {
+    return false;
+  }
+}
+
 // Inotify reports changes to a directory's entries, with their names, on the
 // directory's own watch, so one watcher per directory is enough on Linux.
 // kqueue and event ports only report that the directory itself changed, so
@@ -116,56 +134,81 @@ class FSWatcher extends EventEmitter {
   }
 
   #forget(file) {
+    const watcher = this.#watchers.get(file);
+    if (watcher !== undefined) {
+      watcher.close();
+      this.#watchers.delete(file);
+    }
+    this.#entries.delete(file);
+    this.#symbolicLinks.delete(file);
+
     const childPrefix = file + pathSep;
     for (const entry of this.#entries) {
-      if (entry === file || StringPrototypeStartsWith(entry, childPrefix)) {
+      if (StringPrototypeStartsWith(entry, childPrefix)) {
         this.#entries.delete(entry);
         this.#symbolicLinks.delete(entry);
-        const watcher = this.#watchers.get(entry);
-        if (watcher !== undefined) {
-          watcher.close();
+        const childWatcher = this.#watchers.get(entry);
+        if (childWatcher !== undefined) {
+          childWatcher.close();
           this.#watchers.delete(entry);
         }
       }
     }
   }
 
-  // An entry that vanished between being listed and being watched is left to
-  // the directory's own watcher to report.
+  // Report an entry that vanished between being listed and being watched so
+  // the caller can discard its stale bookkeeping.
   #watch(file, onChange) {
-    if (this.#closed || this.#watchers.has(file)) {
-      return;
+    if (this.#closed) {
+      return false;
+    }
+    if (this.#watchers.has(file)) {
+      return true;
     }
     const { watch } = lazyLoadFsSync();
     let watcher;
     try {
       watcher = watch(file, { persistent: this.#options.persistent }, onChange);
     } catch (err) {
-      if (err.code === 'ENOENT') {
-        return;
+      if (isPathMissingForWatch(err, file) &&
+          (file !== this.#rootPath || !this.#options.throwIfNoEntry)) {
+        return false;
       }
       throw err;
     }
     this.#watchers.set(file, watcher);
+    return true;
   }
 
-  // Registers the entries of `folder` that are not known yet (emitting
-  // 'rename' for them unless this is the initial scan) and arms one watcher
-  // for the directory; #addEntry() descends into subdirectories.
+  // Arms one watcher for `folder`, then registers entries that are not known
+  // yet (emitting 'rename' for them unless this is the initial scan);
+  // #addEntry() descends into subdirectories.
   #scanFolder(folder, initial) {
+    if (!this.#watch(folder, (eventType, filename) => this.#onFolderEvent(folder, filename))) {
+      this.#forget(folder);
+      return;
+    }
+
     const { readdirSync } = lazyLoadFsSync();
     let entries;
     try {
       entries = readdirSync(folder, { withFileTypes: true });
     } catch (error) {
-      if (error.code !== 'ENOENT') {
+      if (error.code === 'ENOENT' || error.code === 'ENOTDIR') {
+        if (folder === this.#rootPath && initial &&
+            (error.code !== 'ENOENT' || this.#options.throwIfNoEntry)) {
+          throw error;
+        }
+        if (!initial && !this.#closed) {
+          this.#emit('rename', folder);
+        }
+        this.#forget(folder);
+      } else {
         this.emit('error', error);
       }
       return;
     }
 
-    this.#watch(folder, (eventType, filename) => this.#onFolderEvent(folder, filename));
-
     for (const entry of entries) {
       if (this.#closed) {
         break;
@@ -187,11 +230,15 @@ class FSWatcher extends EventEmitter {
       // The link target is watched so that changes behind the link surface
       // as a 'rename' of the link, as they always have on this code path.
       this.#symbolicLinks.add(file);
-      this.#watch(file, () => this.#emit('rename', file));
+      if (!this.#watch(file, () => this.#emit('rename', file))) {
+        this.#forget(file);
+      }
     } else if (entry.isDirectory()) {
       this.#scanFolder(file, initial);
     } else if (!kDirectoryWatchReportsEntries) {
-      this.#watch(file, () => this.#onEntryEvent(file));
+      if (!this.#watch(file, () => this.#onEntryEvent(file))) {
+        this.#forget(file);
+      }
     }
   }
 
@@ -253,7 +300,7 @@ class FSWatcher extends EventEmitter {
   #watchRootFile(file) {
     const { statSync } = lazyLoadFsSync();
     this.#entries.add(file);
-    this.#watch(file, () => {
+    if (!this.#watch(file, () => {
       if (this.#closed) {
         return;
       }
@@ -263,7 +310,9 @@ class FSWatcher extends EventEmitter {
       } else {
         this.emit('change', 'change', pathBasename(file));
       }
-    });
+    })) {
+      this.#forget(file);
+    }
   }
 
   [kFSWatchStart](filename) {
 
@@ -114,8 +114,6 @@ test-fs-watch-ignore-regexp: SKIP
 [$system==aix]
 # https://github.com/nodejs/node/issues/54346
 test-esm-loader-hooks-inspect-wait: PASS, FLAKY
-# https://github.com/nodejs/node/issues/65697
-test-fs-watch-recursive-delete-race: SKIP
 
 [$system==ibmi]
 # https://github.com/nodejs/node/pull/30819
 
@@ -0,0 +1,53 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+
+if (!common.isAIX)
+  common.skip('AIX-specific ENODEV handling');
+
+const assert = require('assert');
+const fs = require('fs');
+const tmpdir = require('../common/tmpdir');
+const { kFSWatchStart } = require('internal/fs/watchers');
+const { FSWatcher } = require('internal/fs/recursive_watch');
+
+tmpdir.refresh();
+
+const directory = tmpdir.resolve('preserve-watch-error');
+const originalStatSync = fs.statSync;
+const originalWatch = fs.watch;
+const expected = new Error('watch failed');
+const verificationError = new Error('stat failed');
+const watcher = new FSWatcher({ recursive: true, throwIfNoEntry: false });
+const failVerification = common.mustCall(() => {
+  throw verificationError;
+});
+
+expected.code = 'ENODEV';
+verificationError.code = 'EIO';
+fs.mkdirSync(directory);
+fs.watch = common.mustCall((filename) => {
+  assert.strictEqual(filename, directory);
+  throw expected;
+});
+fs.statSync = (filename, options) => {
+  if (filename === directory && options?.throwIfNoEntry === false) {
+    return failVerification();
+  }
+  return Reflect.apply(originalStatSync, fs, [filename, options]);
+};
+
+try {
+  assert.throws(
+    () => watcher[kFSWatchStart](directory),
+    (error) => {
+      assert.strictEqual(error, expected);
+      return true;
+    },
+  );
+} finally {
+  watcher.close();
+  fs.statSync = originalStatSync;
+  fs.watch = originalWatch;
+}
@@ -0,0 +1,54 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+const assert = require('assert');
+const fs = require('fs');
+const path = require('path');
+const tmpdir = require('../common/tmpdir');
+const { kFSWatchStart } = require('internal/fs/watchers');
+const { FSWatcher } = require('internal/fs/recursive_watch');
+
+function createWatcher() {
+  return { close() {} };
+}
+
+tmpdir.refresh();
+
+const directory = tmpdir.resolve('retry-directory-disappears-before-read');
+const child = path.join(directory, 'child');
+const originalWatch = fs.watch;
+const watcher = new FSWatcher({ recursive: true });
+let childWatchCalls = 0;
+let directoryListener;
+let staleWatcherCloseCalls = 0;
+
+fs.mkdirSync(child, { recursive: true });
+fs.watch = common.mustCall((filename, options, listener) => {
+  if (filename === directory) {
+    directoryListener = listener;
+    return createWatcher();
+  }
+
+  assert.strictEqual(filename, child);
+  childWatchCalls++;
+  if (childWatchCalls === 1) {
+    fs.rmSync(child, { recursive: true });
+    return { close: () => staleWatcherCloseCalls++ };
+  }
+  return createWatcher();
+}, 3);
+
+try {
+  watcher[kFSWatchStart](directory);
+  assert.strictEqual(childWatchCalls, 1);
+  assert.strictEqual(staleWatcherCloseCalls, 1);
+
+  fs.mkdirSync(child);
+  directoryListener('rename', null);
+
+  assert.strictEqual(childWatchCalls, 2);
+} finally {
+  watcher.close();
+  fs.watch = originalWatch;
+}
@@ -0,0 +1,66 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+
+if (common.isIBMi)
+  common.skip('IBMi does not support `fs.watch()`');
+
+const assert = require('assert');
+const fs = require('fs');
+const path = require('path');
+const tmpdir = require('../common/tmpdir');
+const { kFSWatchStart } = require('internal/fs/watchers');
+const { FSWatcher } = require('internal/fs/recursive_watch');
+
+function createWatcher() {
+  return { close() {} };
+}
+
+tmpdir.refresh();
+
+const directory = tmpdir.resolve('retry-directory-disappears-before-watch');
+const child = path.join(directory, 'child');
+const originalWatch = fs.watch;
+const changes = [];
+const watcher = new FSWatcher({ recursive: true });
+let childWatchCalls = 0;
+let directoryListener;
+let watchError;
+
+fs.mkdirSync(child, { recursive: true });
+watcher.on('change', (eventType, filename) => changes.push([eventType, filename]));
+fs.watch = common.mustCall((filename, options, listener) => {
+  if (filename === directory) {
+    directoryListener = listener;
+    return createWatcher();
+  }
+
+  assert.strictEqual(filename, child);
+  childWatchCalls++;
+  if (childWatchCalls === 1) {
+    fs.rmSync(child, { recursive: true });
+    try {
+      return Reflect.apply(originalWatch, fs, [filename, options, listener]);
+    } catch (error) {
+      watchError = error;
+      throw error;
+    }
+  }
+  return createWatcher();
+}, 3);
+
+try {
+  watcher[kFSWatchStart](directory);
+  assert.strictEqual(childWatchCalls, 1);
+  assert.match(watchError?.code, /^(ENOENT|ENODEV)$/);
+
+  fs.mkdirSync(child);
+  directoryListener('rename', null);
+
+  assert.strictEqual(childWatchCalls, 2);
+  assert.deepStrictEqual(changes, [['rename', 'child']]);
+} finally {
+  watcher.close();
+  fs.watch = originalWatch;
+}
@@ -0,0 +1,37 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+const assert = require('assert');
+const fs = require('fs');
+const tmpdir = require('../common/tmpdir');
+const { kFSWatchStart } = require('internal/fs/watchers');
+const { FSWatcher } = require('internal/fs/recursive_watch');
+
+tmpdir.refresh();
+
+const directory = tmpdir.resolve('root-disappears-before-read');
+const originalWatch = fs.watch;
+const watcher = new FSWatcher({ recursive: true });
+let closeCalls = 0;
+
+fs.mkdirSync(directory);
+fs.watch = common.mustCall((filename) => {
+  assert.strictEqual(filename, directory);
+  fs.rmSync(directory, { recursive: true });
+  return { close: () => closeCalls++ };
+});
+
+try {
+  assert.throws(
+    () => watcher[kFSWatchStart](directory),
+    {
+      code: 'ENOENT',
+      filename: directory,
+    },
+  );
+  assert.strictEqual(closeCalls, 1);
+} finally {
+  watcher.close();
+  fs.watch = originalWatch;
+}