diff --git a/beacon-chain/blockchain/error.go b/beacon-chain/blockchain/error.go
index 3be6076534..ae689fb8bb 100644
--- a/beacon-chain/blockchain/error.go
+++ b/beacon-chain/blockchain/error.go
@@ -41,13 +41,15 @@ var (
 type invalidBlock struct {
 	invalidAncestorRoots [][32]byte
 	error
-	root [32]byte
+	root          [32]byte
+	lastValidHash [32]byte
 }
 
 type invalidBlockError interface {
 	Error() string
 	InvalidAncestorRoots() [][32]byte
 	BlockRoot() [32]byte
+	LastValidHash() [32]byte
 }
 
 // BlockRoot returns the invalid block root.
@@ -55,6 +57,11 @@ func (e invalidBlock) BlockRoot() [32]byte {
 	return e.root
 }
 
+// LastValidHash returns the last valid hash root.
+func (e invalidBlock) LastValidHash() [32]byte {
+	return e.lastValidHash
+}
+
 // InvalidAncestorRoots returns an optional list of invalid roots of the invalid block which leads up last valid root.
 func (e invalidBlock) InvalidAncestorRoots() [][32]byte {
 	return e.invalidAncestorRoots
@@ -72,6 +79,19 @@ func IsInvalidBlock(e error) bool {
 	return true
 }
 
+// InvalidBlockLVH returns the invalid block last valid hash root. If the error
+// doesn't have a last valid hash, [32]byte{} is returned.
+func InvalidBlockLVH(e error) [32]byte {
+	if e == nil {
+		return [32]byte{}
+	}
+	d, ok := e.(invalidBlockError)
+	if !ok {
+		return [32]byte{}
+	}
+	return d.LastValidHash()
+}
+
 // InvalidBlockRoot returns the invalid block root. If the error
 // doesn't have an invalid blockroot. [32]byte{} is returned.
 func InvalidBlockRoot(e error) [32]byte {
diff --git a/beacon-chain/blockchain/execution_engine.go b/beacon-chain/blockchain/execution_engine.go
index 49ebe6cefc..45566226b4 100644
--- a/beacon-chain/blockchain/execution_engine.go
+++ b/beacon-chain/blockchain/execution_engine.go
@@ -220,35 +220,37 @@ func (s *Service) notifyNewPayload(ctx context.Context, postStateVersion int,
 		}).Info("Called new payload with optimistic block")
 		return false, nil
 	case execution.ErrInvalidPayloadStatus:
-		newPayloadInvalidNodeCount.Inc()
-		root, err := blk.Block().HashTreeRoot()
-		if err != nil {
-			return false, err
-		}
-		invalidRoots, err := s.cfg.ForkChoiceStore.SetOptimisticToInvalid(ctx, root, blk.Block().ParentRoot(), bytesutil.ToBytes32(lastValidHash))
-		if err != nil {
-			return false, err
-		}
-		if err := s.removeInvalidBlockAndState(ctx, invalidRoots); err != nil {
-			return false, err
-		}
-		log.WithFields(logrus.Fields{
-			"slot":                 blk.Block().Slot(),
-			"blockRoot":            fmt.Sprintf("%#x", root),
-			"invalidChildrenCount": len(invalidRoots),
-		}).Warn("Pruned invalid blocks")
+		lvh := bytesutil.ToBytes32(lastValidHash)
 		return false, invalidBlock{
-			invalidAncestorRoots: invalidRoots,
-			error:                ErrInvalidPayload,
+			error:         ErrInvalidPayload,
+			lastValidHash: lvh,
 		}
-	case execution.ErrInvalidBlockHashPayloadStatus:
-		newPayloadInvalidNodeCount.Inc()
-		return false, ErrInvalidBlockHashPayloadStatus
 	default:
 		return false, errors.WithMessage(ErrUndefinedExecutionEngineError, err.Error())
 	}
 }
 
+// reportInvalidBlock deals with the event that an invalid block was detected by the execution layer
+func (s *Service) reportInvalidBlock(ctx context.Context, root, parentRoot, lvh [32]byte) error {
+	newPayloadInvalidNodeCount.Inc()
+	invalidRoots, err := s.cfg.ForkChoiceStore.SetOptimisticToInvalid(ctx, root, parentRoot, lvh)
+	if err != nil {
+		return err
+	}
+	if err := s.removeInvalidBlockAndState(ctx, invalidRoots); err != nil {
+		return err
+	}
+	log.WithFields(logrus.Fields{
+		"blockRoot":            fmt.Sprintf("%#x", root),
+		"invalidChildrenCount": len(invalidRoots),
+	}).Warn("Pruned invalid blocks")
+	return invalidBlock{
+		invalidAncestorRoots: invalidRoots,
+		error:                ErrInvalidPayload,
+		lastValidHash:        lvh,
+	}
+}
+
 // getPayloadAttributes returns the payload attributes for the given state and slot.
 // The attribute is required to initiate a payload build process in the context of an `engine_forkchoiceUpdated` call.
 func (s *Service) getPayloadAttribute(ctx context.Context, st state.BeaconState, slot primitives.Slot, headRoot []byte) (bool, payloadattribute.Attributer, primitives.ValidatorIndex) {
diff --git a/beacon-chain/blockchain/execution_engine_test.go b/beacon-chain/blockchain/execution_engine_test.go
index 11b8842e0e..6fa81abc46 100644
--- a/beacon-chain/blockchain/execution_engine_test.go
+++ b/beacon-chain/blockchain/execution_engine_test.go
@@ -743,6 +743,37 @@ func Test_NotifyNewPayload_SetOptimisticToValid(t *testing.T) {
 	require.Equal(t, true, validated)
 }
 
+func Test_reportInvalidBlock(t *testing.T) {
+	params.SetupTestConfigCleanup(t)
+	params.OverrideBeaconConfig(params.MainnetConfig())
+	service, tr := minimalTestService(t)
+	ctx, _, fcs := tr.ctx, tr.db, tr.fcs
+	jcp := &ethpb.Checkpoint{}
+	st, root, err := prepareForkchoiceState(ctx, 0, [32]byte{'A'}, [32]byte{}, [32]byte{'a'}, jcp, jcp)
+	require.NoError(t, err)
+	require.NoError(t, fcs.InsertNode(ctx, st, root))
+	st, root, err = prepareForkchoiceState(ctx, 1, [32]byte{'B'}, [32]byte{'A'}, [32]byte{'b'}, jcp, jcp)
+	require.NoError(t, err)
+	require.NoError(t, fcs.InsertNode(ctx, st, root))
+	st, root, err = prepareForkchoiceState(ctx, 2, [32]byte{'C'}, [32]byte{'B'}, [32]byte{'c'}, jcp, jcp)
+	require.NoError(t, err)
+	require.NoError(t, fcs.InsertNode(ctx, st, root))
+
+	st, root, err = prepareForkchoiceState(ctx, 3, [32]byte{'D'}, [32]byte{'C'}, [32]byte{'d'}, jcp, jcp)
+	require.NoError(t, err)
+	require.NoError(t, fcs.InsertNode(ctx, st, root))
+
+	require.NoError(t, fcs.SetOptimisticToValid(ctx, [32]byte{'A'}))
+	err = service.reportInvalidBlock(ctx, [32]byte{'D'}, [32]byte{'C'}, [32]byte{'a'})
+	require.Equal(t, IsInvalidBlock(err), true)
+	require.Equal(t, InvalidBlockLVH(err), [32]byte{'a'})
+	invalidRoots := InvalidAncestorRoots(err)
+	require.Equal(t, 3, len(invalidRoots))
+	require.Equal(t, [32]byte{'D'}, invalidRoots[0])
+	require.Equal(t, [32]byte{'C'}, invalidRoots[1])
+	require.Equal(t, [32]byte{'B'}, invalidRoots[2])
+}
+
 func Test_GetPayloadAttribute(t *testing.T) {
 	service, tr := minimalTestService(t, WithProposerIdsCache(cache.NewProposerPayloadIDsCache()))
 	ctx := tr.ctx
diff --git a/beacon-chain/blockchain/process_block.go b/beacon-chain/blockchain/process_block.go
index 5dc9741bd6..d89f127b1f 100644
--- a/beacon-chain/blockchain/process_block.go
+++ b/beacon-chain/blockchain/process_block.go
@@ -107,7 +107,8 @@ func (s *Service) onBlock(ctx context.Context, signed interfaces.ReadOnlySignedB
 	}
 
 	// Verify that the parent block is in forkchoice
-	if !s.cfg.ForkChoiceStore.HasNode(b.ParentRoot()) {
+	parentRoot := b.ParentRoot()
+	if !s.cfg.ForkChoiceStore.HasNode(parentRoot) {
 		return ErrNotDescendantOfFinalized
 	}
 
@@ -134,6 +135,9 @@ func (s *Service) onBlock(ctx context.Context, signed interfaces.ReadOnlySignedB
 	}
 	isValidPayload, err := s.notifyNewPayload(ctx, postStateVersion, postStateHeader, signed)
 	if err != nil {
+		if IsInvalidBlock(err) && InvalidBlockLVH(err) != [32]byte{} {
+			return s.reportInvalidBlock(ctx, blockRoot, parentRoot, InvalidBlockLVH(err))
+		}
 		return errors.Wrap(err, "could not validate new payload")
 	}
 	if signed.Version() < version.Capella && isValidPayload {