diff --git a/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOAuth2UserServiceImpl.java b/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOAuth2UserServiceImpl.java
index 040de654a0..f65d091b1a 100644
--- a/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOAuth2UserServiceImpl.java
+++ b/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOAuth2UserServiceImpl.java
@@ -59,6 +59,13 @@ public class CustomOAuth2UserServiceImpl extends DefaultReactiveOAuth2UserServic
                     newUser.setIsEnabled(true);
 
                     return userService.create(newUser);
-                }));
+                }))
+                .flatMap(user -> {
+                    if (!user.getIsEnabled()) {
+                        user.setIsEnabled(true);
+                        return repository.save(user);
+                    }
+                    return Mono.just(user);
+                });
     }
 }
diff --git a/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOidcUserServiceImpl.java b/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOidcUserServiceImpl.java
index a631fa9a45..2c121fb145 100644
--- a/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOidcUserServiceImpl.java
+++ b/app/server/appsmith-server/src/main/java/com/appsmith/server/authentication/handlers/CustomOidcUserServiceImpl.java
@@ -66,6 +66,13 @@ public class CustomOidcUserServiceImpl extends OidcReactiveOAuth2UserService
                     newUser.setIsEnabled(true);
 
                     return userService.create(newUser);
-                }));
+                }))
+                .flatMap(user -> {
+                    if (!user.getIsEnabled()) {
+                        user.setIsEnabled(true);
+                        return repository.save(user);
+                    }
+                    return Mono.just(user);
+                });
     }
 }
diff --git a/app/server/appsmith-server/src/main/java/com/appsmith/server/services/UserServiceImpl.java b/app/server/appsmith-server/src/main/java/com/appsmith/server/services/UserServiceImpl.java
index 7a87dbb333..aa34cb4d8b 100644
--- a/app/server/appsmith-server/src/main/java/com/appsmith/server/services/UserServiceImpl.java
+++ b/app/server/appsmith-server/src/main/java/com/appsmith/server/services/UserServiceImpl.java
@@ -480,8 +480,26 @@ public class UserServiceImpl extends BaseService<UserRepository, User, String> i
         }
         final String finalOriginHeader = originHeader;
 
-        return userCreate(user)
+        // If the user doesn't exist, create the user. If the user exists, return a duplicate key exception
+        return repository.findByEmail(user.getUsername())
+                .flatMap(savedUser -> {
+                    if (!savedUser.getIsEnabled()) {
+                        // First enable the user
+                        savedUser.setIsEnabled(true);
+                        // In case of form login, store the password
+                        if (LoginSource.FORM.equals(user.getSource())) {
+                            if (user.getPassword() == null || user.getPassword().isBlank()) {
+                                return Mono.error(new AppsmithException(AppsmithError.INVALID_CREDENTIALS));
+                            }
+                            savedUser.setPassword(this.passwordEncoder.encode(user.getPassword()));
+                        }
+                        return repository.save(savedUser);
+                    }
+                    return Mono.error(new AppsmithException(AppsmithError.DUPLICATE_KEY));
+                })
+                .switchIfEmpty(userCreate(user))
                 .flatMap(savedUser -> sendWelcomeEmail(savedUser, finalOriginHeader));
+
     }
 
     public Mono<User> sendWelcomeEmail(User user, String originHeader) {
diff --git a/app/server/appsmith-server/src/test/java/com/appsmith/server/services/UserServiceTest.java b/app/server/appsmith-server/src/test/java/com/appsmith/server/services/UserServiceTest.java
index d5c4c6c168..23261861d7 100644
--- a/app/server/appsmith-server/src/test/java/com/appsmith/server/services/UserServiceTest.java
+++ b/app/server/appsmith-server/src/test/java/com/appsmith/server/services/UserServiceTest.java
@@ -6,6 +6,7 @@ import com.appsmith.server.configurations.WithMockAppsmithUser;
 import com.appsmith.server.constants.FieldName;
 import com.appsmith.server.domains.Application;
 import com.appsmith.server.domains.InviteUser;
+import com.appsmith.server.domains.LoginSource;
 import com.appsmith.server.domains.Organization;
 import com.appsmith.server.domains.User;
 import com.appsmith.server.exceptions.AppsmithError;
@@ -110,10 +111,10 @@ public class UserServiceTest {
     }
 
     @Test
-    @WithMockUser(username = "anonymousUser", roles = {"ANONYMOUS"})
+    @WithMockAppsmithUser
     public void createNewUserFormSignupNullPassword() {
         User newUser = new User();
-        newUser.setEmail("new-user-email@email.com");
+        newUser.setEmail("new-user-email-with-null-password@email.com");
 
         Mono<User> userMono = userService.create(newUser);
 
@@ -246,6 +247,7 @@ public class UserServiceTest {
     }
 
     @Test
+    @WithMockAppsmithUser
     public void confirmInviteTokenFlow() {
         User newUser = new User();
         newUser.setEmail("newEmail@newEmail.com");
@@ -267,5 +269,55 @@ public class UserServiceTest {
                 .verifyComplete();
 
     }
+
+    @Test
+    @WithMockAppsmithUser
+    public void signUpViaFormLoginIfAlreadyInvited() {
+        User newUser = new User();
+        newUser.setEmail("alreadyInvited@alreadyInvited.com");
+        newUser.setIsEnabled(false);
+
+        userRepository.save(newUser).block();
+
+        User signupUser = new User();
+        signupUser.setEmail(newUser.getEmail());
+        signupUser.setPassword("password");
+        signupUser.setSource(LoginSource.FORM);
+
+        Mono<User> userMono = userService.create(signupUser);
+
+        StepVerifier.create(userMono)
+                .assertNext(user -> {
+                    assertThat(user.getEmail().equals(newUser.getEmail()));
+                    assertThat(user.getSource().equals(LoginSource.FORM));
+                    assertThat(user.getIsEnabled()).isTrue();
+                })
+                .verifyComplete();
+    }
+
+    @Test
+    @WithMockAppsmithUser
+    public void signUpViaGoogleIfAlreadyInvited() {
+        User newUser = new User();
+        newUser.setEmail("alreadyInvited@google-gmail.com");
+        newUser.setIsEnabled(false);
+
+        userRepository.save(newUser).block();
+
+        User signupUser = new User();
+        signupUser.setEmail(newUser.getEmail());
+        signupUser.setPassword("password");
+        signupUser.setSource(LoginSource.GOOGLE);
+
+        Mono<User> userMono = userService.create(signupUser);
+
+        StepVerifier.create(userMono)
+                .assertNext(user -> {
+                    assertThat(user.getEmail().equals(newUser.getEmail()));
+                    assertThat(user.getSource().equals(LoginSource.GOOGLE));
+                    assertThat(user.getIsEnabled()).isTrue();
+                })
+                .verifyComplete();
+    }
 }