diff --git a/cddl/usr.sbin/zfsd/case_file.cc b/cddl/usr.sbin/zfsd/case_file.cc
--- a/cddl/usr.sbin/zfsd/case_file.cc
+++ b/cddl/usr.sbin/zfsd/case_file.cc
@@ -288,7 +288,7 @@
 		return (/*consumed*/false);
 	}
 
-	if (VdevState() > VDEV_STATE_CANT_OPEN) {
+	if (VdevState() > VDEV_STATE_FAULTED) {
 		/*
 		 * For now, newly discovered devices only help for
 		 * devices that are missing.  In the future, we might
diff --git a/tests/sys/cddl/zfs/tests/zfsd/zfsd.kshlib b/tests/sys/cddl/zfs/tests/zfsd/zfsd.kshlib
--- a/tests/sys/cddl/zfs/tests/zfsd/zfsd.kshlib
+++ b/tests/sys/cddl/zfs/tests/zfsd/zfsd.kshlib
@@ -52,7 +52,7 @@
 function wait_for_pool_removal
 {
 	typeset -i timeout=$1
-	wait_for_pool_dev_state_change $timeout $REMOVAL_DISK "REMOVED|UNAVAIL"
+	wait_for_pool_dev_state_change $timeout $REMOVAL_DISK "REMOVED|UNAVAIL|FAULTED"
 }
 
 function wait_until_scrubbed
diff --git a/tests/sys/cddl/zfs/tests/zfsd/zfsd_autoreplace_003_pos.ksh b/tests/sys/cddl/zfs/tests/zfsd/zfsd_autoreplace_003_pos.ksh
--- a/tests/sys/cddl/zfs/tests/zfsd/zfsd_autoreplace_003_pos.ksh
+++ b/tests/sys/cddl/zfs/tests/zfsd/zfsd_autoreplace_003_pos.ksh
@@ -83,19 +83,25 @@
 typeset OTHER_DISKS="${DISK1} ${DISK2}"
 typeset OTHER_NOPS=${OTHER_DISKS//~(E)([[:space:]]+|$)/.nop\1}
 set -A MY_KEYWORDS "mirror" "raidz1" "raidz2"
+set -A MY_FAILURES "FAULTED" "REMOVED"
 ensure_zfsd_running
 log_must create_gnops $OTHER_DISKS $SPARE_DISK
-for keyword in "${MY_KEYWORDS[@]}" ; do
-	log_must create_gnop $REMOVAL_DISK $PHYSPATH
-	log_must create_pool $TESTPOOL $keyword $REMOVAL_NOP $OTHER_NOPS spare $SPARE_NOP
-	log_must $ZPOOL set autoreplace=on $TESTPOOL
+for failure in "${MY_FAILURES[@]}" ; do
+	for keyword in "${MY_KEYWORDS[@]}" ; do
+		log_must create_gnop $REMOVAL_DISK $PHYSPATH
+		log_must create_pool $TESTPOOL $keyword $REMOVAL_NOP $OTHER_NOPS spare $SPARE_NOP
+		log_must $ZPOOL set autoreplace=on $TESTPOOL
 
-	log_must destroy_gnop $REMOVAL_DISK
-	log_must wait_for_pool_removal 20
-	log_must create_gnop $NEW_DISK $PHYSPATH
-	verify_assertion
-	destroy_pool "$TESTPOOL"
-	log_must destroy_gnop $NEW_DISK
+		if [ $failure = "FAULTED" ]; then
+			log_must zinject -d $REMOVAL_NOP -A fault $TESTPOOL
+		fi
+		log_must destroy_gnop $REMOVAL_DISK
+		log_must wait_for_pool_removal 20
+		log_must create_gnop $NEW_DISK $PHYSPATH
+		verify_assertion
+		destroy_pool "$TESTPOOL"
+		log_must destroy_gnop $NEW_DISK
+	done
 done
 
 log_pass