diff --git a/coderd/workspacebuilds.go b/coderd/workspacebuilds.go
index 0c58b902e2..c5f0b2f7f1 100644
--- a/coderd/workspacebuilds.go
+++ b/coderd/workspacebuilds.go
@@ -399,6 +399,40 @@ func (api *API) postWorkspaceBuildsInternal(
 	err := api.Database.InTx(func(tx database.Store) error {
 		var err error
 
+		// #20925: if the workspace is dormant and we are starting the workspace,
+		// we need to unset that status before inserting a new build.
+		// This is done inside the transaction for consistency, but it could also be
+		// done outside the transaction so that an attempt to start a workspace will
+		// also unset dormancy.
+		if workspace.DormantAt.Valid && transition == database.WorkspaceTransitionStart {
+			if _, err := tx.UpdateWorkspaceDormantDeletingAt(ctx, database.UpdateWorkspaceDormantDeletingAtParams{
+				ID:        workspace.ID,
+				DormantAt: sql.NullTime{Valid: false},
+			}); err != nil {
+				return httperror.NewResponseError(http.StatusInternalServerError, codersdk.Response{
+					Message: "Internal error unsetting workspace dormant status",
+					Detail:  err.Error(),
+				})
+			}
+			// We need to audit this change separately.
+			updatedWorkspace := workspace.WorkspaceTable()
+			updatedWorkspace.DormantAt = sql.NullTime{Valid: false}
+			auditor := api.Auditor.Load()
+			bag := audit.BaggageFromContext(ctx)
+			audit.BackgroundAudit(ctx, &audit.BackgroundAuditParams[database.WorkspaceTable]{
+				Audit:          *auditor,
+				Old:            workspace.WorkspaceTable(),
+				New:            updatedWorkspace,
+				Log:            api.Logger,
+				UserID:         apiKey.UserID,
+				OrganizationID: workspace.OrganizationID,
+				RequestID:      workspace.ID,
+				IP:             bag.IP,
+				Action:         database.AuditActionWrite,
+				Status:         http.StatusOK,
+			})
+		}
+
 		previousWorkspaceBuild, err = tx.GetLatestWorkspaceBuildByWorkspaceID(ctx, workspace.ID)
 		if err != nil && !xerrors.Is(err, sql.ErrNoRows) {
 			api.Logger.Error(ctx, "failed fetching previous workspace build", slog.F("workspace_id", workspace.ID), slog.Error(err))
diff --git a/coderd/workspaces_test.go b/coderd/workspaces_test.go
index d60b742cb2..d27441993a 100644
--- a/coderd/workspaces_test.go
+++ b/coderd/workspaces_test.go
@@ -4244,10 +4244,16 @@ func TestWorkspaceDormant(t *testing.T) {
 		require.True(t, workspace.LastUsedAt.After(lastUsedAt))
 	})
 
-	t.Run("CannotStart", func(t *testing.T) {
+	// #20925: this test originally validated that you could **not** start a dormant workspace.
+	// The client was required to explicitly update the dormancy status before starting.
+	// This led to a 'whack-a-mole' situation where various code paths that create a workspace build
+	// would need to special case dormant workspaces.
+	// Now, a dormant workspace will automatically 'wake up' on start.
+	t.Run("StartWakesUpDormantWorkspace", func(t *testing.T) {
 		t.Parallel()
 		var (
-			client    = coderdtest.New(t, &coderdtest.Options{IncludeProvisionerDaemon: true})
+			auditor   = audit.NewMock()
+			client    = coderdtest.New(t, &coderdtest.Options{IncludeProvisionerDaemon: true, Auditor: auditor})
 			user      = coderdtest.CreateFirstUser(t, client)
 			version   = coderdtest.CreateTemplateVersion(t, client, user.OrganizationID, nil)
 			_         = coderdtest.AwaitTemplateVersionJobCompleted(t, client, version.ID)
@@ -4267,18 +4273,37 @@ func TestWorkspaceDormant(t *testing.T) {
 		// Should be able to stop a workspace while it is dormant.
 		coderdtest.MustTransitionWorkspace(t, client, workspace.ID, codersdk.WorkspaceTransitionStart, codersdk.WorkspaceTransitionStop)
 
-		// Should not be able to start a workspace while it is dormant.
-		_, err = client.CreateWorkspaceBuild(ctx, workspace.ID, codersdk.CreateWorkspaceBuildRequest{
+		// Reset the auditor
+		auditor.ResetLogs()
+		// Assert test invariant: workspace is dormant.
+		workspace, err = client.Workspace(ctx, workspace.ID)
+		require.NoError(t, err, "fetch dormant workspace")
+		if assert.NotNil(t, workspace.DormantAt, "workspace must be dormant") {
+			require.WithinDuration(t, *workspace.DormantAt, time.Now(), 10*time.Second)
+		}
+		// Starting a dormant workspace should 'wake' it.
+		wb, err := client.CreateWorkspaceBuild(ctx, workspace.ID, codersdk.CreateWorkspaceBuildRequest{
 			TemplateVersionID: template.ActiveVersionID,
 			Transition:        codersdk.WorkspaceTransition(database.WorkspaceTransitionStart),
 		})
-		require.Error(t, err)
-
-		err = client.UpdateWorkspaceDormancy(ctx, workspace.ID, codersdk.UpdateWorkspaceDormancy{
-			Dormant: false,
-		})
 		require.NoError(t, err)
-		coderdtest.MustTransitionWorkspace(t, client, workspace.ID, codersdk.WorkspaceTransitionStop, codersdk.WorkspaceTransitionStart)
+		coderdtest.AwaitWorkspaceBuildJobCompleted(t, client, wb.ID)
+
+		// After starting, the workspace should no longer be dormant.
+		updatedWs, err := client.Workspace(ctx, workspace.ID)
+		require.NoError(t, err, "fetch updated workspace")
+		require.Nil(t, updatedWs.DormantAt)
+
+		// There should be an audit log for both the dormancy update and the start.
+		require.Len(t, auditor.AuditLogs(), 2)
+		require.True(t, auditor.Contains(t, database.AuditLog{
+			Action:       database.AuditActionWrite,
+			ResourceType: database.ResourceTypeWorkspace,
+		}))
+		require.True(t, auditor.Contains(t, database.AuditLog{
+			Action:       database.AuditActionStart,
+			ResourceType: database.ResourceTypeWorkspaceBuild,
+		}))
 	})
 }