diff --git a/.changeset/partial-hydration-bubbled-error.md b/.changeset/partial-hydration-bubbled-error.md
new file mode 100644
index 0000000000..c0b2bef50d
--- /dev/null
+++ b/.changeset/partial-hydration-bubbled-error.md
@@ -0,0 +1,5 @@
+---
+"@remix-run/router": patch
+---
+
+Fix a `future.v7_partialHydration` bug that would re-run loaders below the boundary on hydration if SSR loader errors bubbled to a parent boundary
diff --git a/packages/router/__tests__/route-fallback-test.ts b/packages/router/__tests__/route-fallback-test.ts
index b4afc25419..1d8265be45 100644
--- a/packages/router/__tests__/route-fallback-test.ts
+++ b/packages/router/__tests__/route-fallback-test.ts
@@ -401,7 +401,7 @@ describe("future.v7_partialHydration", () => {
       });
     });
 
-    it("does not kick off initial data load if errors exist", async () => {
+    it("does not kick off initial data load if errors exist (parent error)", async () => {
       let consoleWarnSpy = jest
         .spyOn(console, "warn")
         .mockImplementation(() => {});
@@ -457,5 +457,62 @@ describe("future.v7_partialHydration", () => {
       router.dispose();
       consoleWarnSpy.mockReset();
     });
+
+    it("does not kick off initial data load if errors exist (bubbled child error)", async () => {
+      let consoleWarnSpy = jest
+        .spyOn(console, "warn")
+        .mockImplementation(() => {});
+      let parentDfd = createDeferred();
+      let parentSpy = jest.fn(() => parentDfd.promise);
+      let childDfd = createDeferred();
+      let childSpy = jest.fn(() => childDfd.promise);
+      let router = createRouter({
+        history: createMemoryHistory({ initialEntries: ["/child"] }),
+        routes: [
+          {
+            path: "/",
+            loader: parentSpy,
+            children: [
+              {
+                path: "child",
+                loader: childSpy,
+              },
+            ],
+          },
+        ],
+        future: {
+          v7_partialHydration: true,
+        },
+        hydrationData: {
+          errors: {
+            "0": "CHILD ERROR",
+          },
+          loaderData: {
+            "0": "PARENT DATA",
+          },
+        },
+      });
+      router.initialize();
+
+      expect(consoleWarnSpy).not.toHaveBeenCalled();
+      expect(parentSpy).not.toHaveBeenCalled();
+      expect(childSpy).not.toHaveBeenCalled();
+      expect(router.state).toMatchObject({
+        historyAction: "POP",
+        location: expect.objectContaining({ pathname: "/child" }),
+        matches: [{ route: { path: "/" } }, { route: { path: "child" } }],
+        initialized: true,
+        navigation: IDLE_NAVIGATION,
+        errors: {
+          "0": "CHILD ERROR",
+        },
+        loaderData: {
+          "0": "PARENT DATA",
+        },
+      });
+
+      router.dispose();
+      consoleWarnSpy.mockReset();
+    });
   });
 });
diff --git a/packages/router/router.ts b/packages/router/router.ts
index bdea4b0ccf..38d5034cda 100644
--- a/packages/router/router.ts
+++ b/packages/router/router.ts
@@ -833,13 +833,21 @@ export function createRouter(init: RouterInit): Router {
     // were marked for explicit hydration
     let loaderData = init.hydrationData ? init.hydrationData.loaderData : null;
     let errors = init.hydrationData ? init.hydrationData.errors : null;
-    initialized = initialMatches.every(
-      (m) =>
-        m.route.loader &&
-        m.route.loader.hydrate !== true &&
-        ((loaderData && loaderData[m.route.id] !== undefined) ||
-          (errors && errors[m.route.id] !== undefined))
-    );
+    let isRouteInitialized = (m: AgnosticDataRouteMatch) =>
+      m.route.loader &&
+      m.route.loader.hydrate !== true &&
+      ((loaderData && loaderData[m.route.id] !== undefined) ||
+        (errors && errors[m.route.id] !== undefined));
+
+    // If errors exist, don't consider routes below the boundary
+    if (errors) {
+      let idx = initialMatches.findIndex(
+        (m) => errors![m.route.id] !== undefined
+      );
+      initialized = initialMatches.slice(0, idx + 1).every(isRouteInitialized);
+    } else {
+      initialized = initialMatches.every(isRouteInitialized);
+    }
   } else {
     // Without partial hydration - we're initialized if we were provided any
     // hydrationData - which is expected to be complete