diff --git a/tests/e2e/watch_delay_test.go b/tests/e2e/watch_test.go
similarity index 69%
rename from tests/e2e/watch_delay_test.go
rename to tests/e2e/watch_test.go
index c50ebef8922..c69fcac1a79 100644
--- a/tests/e2e/watch_delay_test.go
+++ b/tests/e2e/watch_test.go
@@ -28,6 +28,7 @@ import (
 	"github.com/stretchr/testify/require"
 	"golang.org/x/sync/errgroup"
 
+	"go.etcd.io/etcd/api/v3/mvccpb"
 	clientv3 "go.etcd.io/etcd/client/v3"
 	"go.etcd.io/etcd/tests/v3/framework/e2e"
 )
@@ -246,3 +247,88 @@ func continuouslyExecuteGetAll(ctx context.Context, t *testing.T, g *errgroup.Gr
 		return nil
 	})
 }
+
+// TestDeleteEventDrop_Issue18089 is an e2e test to reproduce the issue reported in: https://github.com/etcd-io/etcd/issues/18089
+//
+// The goal is to reproduce a DELETE event being dropped in a watch after a compaction
+// occurs on the revision where the deletion took place. In order to reproduce this, we
+// perform the following sequence (steps for reproduction thanks to @ahrtr):
+//   - PUT k v2 (assume returned revision = r2)
+//   - PUT k v3 (assume returned revision = r3)
+//   - PUT k v4 (assume returned revision = r4)
+//   - DELETE k (assume returned revision = r5)
+//   - PUT k v6 (assume returned revision = r6)
+//   - COMPACT r5
+//   - WATCH rev=r5
+//
+// We should get the DELETE event (r5) followed by the PUT event (r6). However, currently we only
+// get the PUT event with returned revision of r6 (key=k, val=v6).
+func TestDeleteEventDrop_Issue18089(t *testing.T) {
+	e2e.BeforeTest(t)
+	cfg := e2e.DefaultConfig()
+	cfg.ClusterSize = 1
+	cfg.Client = e2e.ClientConfig{ConnectionType: e2e.ClientTLS}
+	clus, err := e2e.NewEtcdProcessCluster(context.Background(), t, e2e.WithConfig(cfg))
+	require.NoError(t, err)
+	defer clus.Close()
+
+	c := newClient(t, clus.EndpointsGRPC(), cfg.Client)
+	defer c.Close()
+
+	ctx := context.Background()
+	const (
+		key = "k"
+		v2  = "v2"
+		v3  = "v3"
+		v4  = "v4"
+		v6  = "v6"
+	)
+
+	t.Logf("PUT key=%s, val=%s", key, v2)
+	_, err = c.KV.Put(ctx, key, v2)
+	require.NoError(t, err)
+
+	t.Logf("PUT key=%s, val=%s", key, v3)
+	_, err = c.KV.Put(ctx, key, v3)
+	require.NoError(t, err)
+
+	t.Logf("PUT key=%s, val=%s", key, v4)
+	_, err = c.KV.Put(ctx, key, v4)
+	require.NoError(t, err)
+
+	t.Logf("DELTE key=%s", key)
+	deleteResp, err := c.KV.Delete(ctx, key)
+	require.NoError(t, err)
+
+	t.Logf("PUT key=%s, val=%s", key, v6)
+	_, err = c.KV.Put(ctx, key, v6)
+	require.NoError(t, err)
+
+	t.Logf("COMPACT rev=%d", deleteResp.Header.Revision)
+	_, err = c.KV.Compact(ctx, deleteResp.Header.Revision, clientv3.WithCompactPhysical())
+	require.NoError(t, err)
+
+	watchChan := c.Watch(ctx, key, clientv3.WithRev(deleteResp.Header.Revision))
+	select {
+	case watchResp := <-watchChan:
+		// TODO(MadhavJivrajani): update conditions once https://github.com/etcd-io/etcd/issues/18089
+		// is resolved. The existing conditions do not mimic the desired behaviour and are there to
+		// test and reproduce etcd-io/etcd#18089.
+		if len(watchResp.Events) != 1 {
+			t.Fatalf("expected exactly one event in response, got: %d", len(watchResp.Events))
+		}
+		if watchResp.Events[0].Type != mvccpb.PUT {
+			t.Fatalf("unexpected event type, expected: %s, got: %s", mvccpb.PUT, watchResp.Events[0].Type)
+		}
+		if string(watchResp.Events[0].Kv.Key) != key {
+			t.Fatalf("unexpected key, expected: %s, got: %s", key, string(watchResp.Events[0].Kv.Key))
+		}
+		if string(watchResp.Events[0].Kv.Value) != v6 {
+			t.Fatalf("unexpected valye, expected: %s, got: %s", v6, string(watchResp.Events[0].Kv.Value))
+		}
+	case <-time.After(100 * time.Millisecond):
+		// we care only about the first response, but have an
+		// escape hatch in case the watch response is delayed.
+		t.Fatal("timed out getting watch response")
+	}
+}