diff --git a/cmd/axon-spawner/main.go b/cmd/axon-spawner/main.go
index 02243c3..8fbf64f 100644
--- a/cmd/axon-spawner/main.go
+++ b/cmd/axon-spawner/main.go
@@ -174,9 +174,13 @@ func runCycleWithSource(ctx context.Context, cl client.Client, key types.Namespa
 	}
 
 	existingTasks := make(map[string]bool)
+	failedTasks := make(map[string]bool)
 	activeTasks := 0
 	for _, t := range existingTaskList.Items {
 		existingTasks[t.Name] = true
+		if t.Status.Phase == axonv1alpha1.TaskPhaseFailed {
+			failedTasks[t.Name] = true
+		}
 		if t.Status.Phase != axonv1alpha1.TaskPhaseSucceeded && t.Status.Phase != axonv1alpha1.TaskPhaseFailed {
 			activeTasks++
 		}
@@ -185,7 +189,7 @@ func runCycleWithSource(ctx context.Context, cl client.Client, key types.Namespa
 	var newItems []source.WorkItem
 	for _, item := range items {
 		taskName := fmt.Sprintf("%s-%s", ts.Name, item.ID)
-		if !existingTasks[taskName] {
+		if !existingTasks[taskName] || failedTasks[taskName] {
 			newItems = append(newItems, item)
 		}
 	}
@@ -216,6 +220,21 @@ func runCycleWithSource(ctx context.Context, cl client.Client, key types.Namespa
 
 		taskName := fmt.Sprintf("%s-%s", ts.Name, item.ID)
 
+		// Delete failed Task so it can be recreated for retry
+		if failedTasks[taskName] {
+			old := &axonv1alpha1.Task{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      taskName,
+					Namespace: ts.Namespace,
+				},
+			}
+			if err := cl.Delete(ctx, old); err != nil && !apierrors.IsNotFound(err) {
+				log.Error(err, "Deleting failed Task for retry", "task", taskName)
+				continue
+			}
+			log.Info("Deleted failed Task for retry", "task", taskName)
+		}
+
 		prompt, err := source.RenderPrompt(ts.Spec.TaskTemplate.PromptTemplate, item)
 		if err != nil {
 			log.Error(err, "rendering prompt", "item", item.ID)
diff --git a/cmd/axon-spawner/main_test.go b/cmd/axon-spawner/main_test.go
index b1b8251..80b4ada 100644
--- a/cmd/axon-spawner/main_test.go
+++ b/cmd/axon-spawner/main_test.go
@@ -286,7 +286,7 @@ func TestRunCycleWithSource_CompletedTasksDontCountTowardsLimit(t *testing.T) {
 	ts := newTaskSpawner("spawner", "default", int32Ptr(2))
 	existingTasks := []axonv1alpha1.Task{
 		newTask("spawner-done1", "default", "spawner", axonv1alpha1.TaskPhaseSucceeded),
-		newTask("spawner-done2", "default", "spawner", axonv1alpha1.TaskPhaseFailed),
+		newTask("spawner-done2", "default", "spawner", axonv1alpha1.TaskPhaseSucceeded),
 	}
 	cl, key := setupTest(t, ts, existingTasks...)
 
@@ -304,13 +304,13 @@ func TestRunCycleWithSource_CompletedTasksDontCountTowardsLimit(t *testing.T) {
 		t.Fatalf("Unexpected error: %v", err)
 	}
 
-	// 2 completed tasks don't count, so 2 new can be created (maxConcurrency=2)
+	// 2 succeeded tasks don't count towards concurrency, so 2 new can be created (maxConcurrency=2)
 	var taskList axonv1alpha1.TaskList
 	if err := cl.List(context.Background(), &taskList, client.InNamespace("default")); err != nil {
 		t.Fatalf("Listing tasks: %v", err)
 	}
 	if len(taskList.Items) != 4 {
-		t.Errorf("Expected 4 tasks (2 completed + 2 new), got %d", len(taskList.Items))
+		t.Errorf("Expected 4 tasks (2 succeeded + 2 new), got %d", len(taskList.Items))
 	}
 }
 
@@ -859,3 +859,104 @@ func TestRunCycleWithSource_NotSuspendedConditionCleared(t *testing.T) {
 		}
 	}
 }
+
+func TestRunCycleWithSource_FailedTaskRetriedImmediately(t *testing.T) {
+	ts := newTaskSpawner("spawner", "default", nil)
+	failedTask := newTask("spawner-42", "default", "spawner", axonv1alpha1.TaskPhaseFailed)
+	cl, key := setupTest(t, ts, failedTask)
+
+	src := &fakeSource{
+		items: []source.WorkItem{
+			{ID: "42", Number: 42, Title: "Fix bug"},
+		},
+	}
+
+	if err := runCycleWithSource(context.Background(), cl, key, src); err != nil {
+		t.Fatalf("Unexpected error: %v", err)
+	}
+
+	// The failed task should be deleted and a new one created
+	var taskList axonv1alpha1.TaskList
+	if err := cl.List(context.Background(), &taskList, client.InNamespace("default")); err != nil {
+		t.Fatalf("Listing tasks: %v", err)
+	}
+	if len(taskList.Items) != 1 {
+		t.Fatalf("Expected 1 task (failed deleted, new created), got %d", len(taskList.Items))
+	}
+
+	// The recreated task should be in Pending phase (not Failed)
+	task := taskList.Items[0]
+	if task.Name != "spawner-42" {
+		t.Errorf("Expected task name %q, got %q", "spawner-42", task.Name)
+	}
+	if task.Status.Phase == axonv1alpha1.TaskPhaseFailed {
+		t.Error("Expected recreated task to not be in Failed phase")
+	}
+}
+
+func TestRunCycleWithSource_SucceededTaskNotRetried(t *testing.T) {
+	ts := newTaskSpawner("spawner", "default", nil)
+	succeededTask := newTask("spawner-42", "default", "spawner", axonv1alpha1.TaskPhaseSucceeded)
+	cl, key := setupTest(t, ts, succeededTask)
+
+	src := &fakeSource{
+		items: []source.WorkItem{
+			{ID: "42", Number: 42, Title: "Fix bug"},
+		},
+	}
+
+	if err := runCycleWithSource(context.Background(), cl, key, src); err != nil {
+		t.Fatalf("Unexpected error: %v", err)
+	}
+
+	// Succeeded task should NOT be retried
+	var taskList axonv1alpha1.TaskList
+	if err := cl.List(context.Background(), &taskList, client.InNamespace("default")); err != nil {
+		t.Fatalf("Listing tasks: %v", err)
+	}
+	if len(taskList.Items) != 1 {
+		t.Fatalf("Expected 1 task (succeeded not retried), got %d", len(taskList.Items))
+	}
+	if taskList.Items[0].Status.Phase != axonv1alpha1.TaskPhaseSucceeded {
+		t.Error("Expected succeeded task to remain unchanged")
+	}
+}
+
+func TestRunCycleWithSource_FailedTaskRetryRespectsMaxConcurrency(t *testing.T) {
+	ts := newTaskSpawner("spawner", "default", int32Ptr(1))
+	existingTasks := []axonv1alpha1.Task{
+		newTask("spawner-running", "default", "spawner", axonv1alpha1.TaskPhaseRunning),
+		newTask("spawner-failed", "default", "spawner", axonv1alpha1.TaskPhaseFailed),
+	}
+	cl, key := setupTest(t, ts, existingTasks...)
+
+	src := &fakeSource{
+		items: []source.WorkItem{
+			{ID: "running", Title: "Running"},
+			{ID: "failed", Title: "Failed"},
+		},
+	}
+
+	if err := runCycleWithSource(context.Background(), cl, key, src); err != nil {
+		t.Fatalf("Unexpected error: %v", err)
+	}
+
+	// The failed task is eligible for retry but maxConcurrency=1 is already
+	// occupied by the running task, so no new task should be created.
+	// The failed task should still be deleted since it was selected for retry.
+	var taskList axonv1alpha1.TaskList
+	if err := cl.List(context.Background(), &taskList, client.InNamespace("default")); err != nil {
+		t.Fatalf("Listing tasks: %v", err)
+	}
+
+	// Count active tasks - should still be 1 (the running task)
+	active := 0
+	for _, task := range taskList.Items {
+		if task.Status.Phase != axonv1alpha1.TaskPhaseSucceeded && task.Status.Phase != axonv1alpha1.TaskPhaseFailed {
+			active++
+		}
+	}
+	if active > 1 {
+		t.Errorf("Expected at most 1 active task (maxConcurrency=1), got %d", active)
+	}
+}