diff --git a/packages/lexical-yjs/src/SyncCursors.ts b/packages/lexical-yjs/src/SyncCursors.ts
index a55500e930e..8770ecf6edf 100644
--- a/packages/lexical-yjs/src/SyncCursors.ts
+++ b/packages/lexical-yjs/src/SyncCursors.ts
@@ -912,6 +912,17 @@ export function syncCursorPositions(
       if (cursor === undefined) {
         cursor = createCursor(name, color);
         cursors.set(clientID, cursor);
+      } else if (cursor.name !== name || cursor.color !== color) {
+        // Awareness is mutable: a peer can rename itself or change colour at
+        // any time (the React plugin republishes local state whenever its
+        // `username` / `cursorColor` props change). The name and colour are
+        // baked into the caret DOM and the ::highlight() rule when the
+        // selection is built, so drop the stale selection here and let the
+        // code below rebuild it from the new values.
+        destroyCursor(binding, cursor);
+        cursor.name = name;
+        cursor.color = color;
+        cursor.selection = null;
       }
 
       if (focusing) {
diff --git a/packages/lexical-yjs/src/__tests__/unit/SyncCursorsAwarenessRefresh.test.ts b/packages/lexical-yjs/src/__tests__/unit/SyncCursorsAwarenessRefresh.test.ts
new file mode 100644
index 00000000000..a391fb29ca7
--- /dev/null
+++ b/packages/lexical-yjs/src/__tests__/unit/SyncCursorsAwarenessRefresh.test.ts
@@ -0,0 +1,105 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ */
+
+import {
+  buildEditorFromExtensions,
+  type LexicalEditorWithDispose,
+} from '@lexical/extension';
+import {
+  createBinding,
+  type Provider,
+  syncCursorPositions,
+  type UserState,
+} from '@lexical/yjs';
+import {defineExtension} from 'lexical';
+import {afterEach, assert, describe, expect, test} from 'vitest';
+import {Doc} from 'yjs';
+
+const REMOTE_CLIENT_ID = 4242;
+
+function userState(name: string, color: string): UserState {
+  return {
+    anchorPos: null,
+    awarenessData: {},
+    color,
+    focusPos: null,
+    focusing: false,
+    name,
+  };
+}
+
+describe('syncCursorPositions awareness refresh', () => {
+  const editors: LexicalEditorWithDispose[] = [];
+  afterEach(() => {
+    for (const editor of editors) {
+      editor.dispose();
+    }
+    editors.length = 0;
+  });
+
+  function buildBinding() {
+    const editor = buildEditorFromExtensions(
+      defineExtension({
+        $initialEditorState: null,
+        name: '[cursor-awareness]',
+      }),
+    );
+    editors.push(editor);
+    const doc = new Doc();
+    const docMap = new Map<string, Doc>([['cursor-awareness', doc]]);
+    const binding = createBinding(
+      editor,
+      null as unknown as Provider,
+      'cursor-awareness',
+      doc,
+      docMap,
+    );
+    return {binding, editor};
+  }
+
+  function sync(
+    binding: ReturnType<typeof createBinding>,
+    state: UserState,
+  ): void {
+    syncCursorPositions(binding, null as unknown as Provider, {
+      getAwarenessStates: () =>
+        new Map<number, UserState>([[REMOTE_CLIENT_ID, state]]),
+    });
+  }
+
+  test('a peer that renames itself updates its cursor name', () => {
+    const {binding} = buildBinding();
+
+    sync(binding, userState('Bob', '#ff0000'));
+    const cursor = binding.cursors.get(REMOTE_CLIENT_ID);
+    assert(cursor !== undefined);
+    expect(cursor.name).toBe('Bob');
+
+    sync(binding, userState('Robert', '#ff0000'));
+    expect(binding.cursors.get(REMOTE_CLIENT_ID)?.name).toBe('Robert');
+  });
+
+  test('a peer that changes colour updates its cursor colour', () => {
+    const {binding} = buildBinding();
+
+    sync(binding, userState('Bob', '#ff0000'));
+    expect(binding.cursors.get(REMOTE_CLIENT_ID)?.color).toBe('#ff0000');
+
+    sync(binding, userState('Bob', '#0000ff'));
+    expect(binding.cursors.get(REMOTE_CLIENT_ID)?.color).toBe('#0000ff');
+  });
+
+  test('an unchanged peer keeps the same cursor object', () => {
+    const {binding} = buildBinding();
+
+    sync(binding, userState('Bob', '#ff0000'));
+    const first = binding.cursors.get(REMOTE_CLIENT_ID);
+    sync(binding, userState('Bob', '#ff0000'));
+    expect(binding.cursors.get(REMOTE_CLIENT_ID)).toBe(first);
+  });
+});