diff --git a/cli/parameterresolver.go b/cli/parameterresolver.go
index 8cae66527d503..486188d52a27a 100644
--- a/cli/parameterresolver.go
+++ b/cli/parameterresolver.go
@@ -141,6 +141,10 @@ next:
 			continue // immutables should not be passed to consecutive builds
 		}
 
+		if len(tvp.Options) > 0 && !isValidTemplateParameterOption(buildParameter, tvp.Options) {
+			continue // do not propagate invalid options
+		}
+
 		for i, r := range resolved {
 			if r.Name == buildParameter.Name {
 				resolved[i].Value = buildParameter.Value
@@ -180,10 +184,12 @@ func (pr *ParameterResolver) resolveWithInput(resolved []codersdk.WorkspaceBuild
 		// Parameter has not been resolved yet, so CLI needs to determine if user should input it.
 
 		firstTimeUse := pr.isFirstTimeUse(tvp.Name)
+		promptParameterOption := pr.isLastBuildParameterInvalidOption(tvp)
 
 		if (tvp.Ephemeral && pr.promptBuildOptions) ||
 			(action == WorkspaceCreate && tvp.Required) ||
 			(action == WorkspaceCreate && !tvp.Ephemeral) ||
+			(action == WorkspaceUpdate && promptParameterOption) ||
 			(action == WorkspaceUpdate && tvp.Mutable && tvp.Required) ||
 			(action == WorkspaceUpdate && !tvp.Mutable && firstTimeUse) ||
 			(action == WorkspaceUpdate && tvp.Mutable && !tvp.Ephemeral && pr.promptRichParameters) {
@@ -207,6 +213,19 @@ func (pr *ParameterResolver) isFirstTimeUse(parameterName string) bool {
 	return findWorkspaceBuildParameter(parameterName, pr.lastBuildParameters) == nil
 }
 
+func (pr *ParameterResolver) isLastBuildParameterInvalidOption(templateVersionParameter codersdk.TemplateVersionParameter) bool {
+	if len(templateVersionParameter.Options) == 0 {
+		return false
+	}
+
+	for _, buildParameter := range pr.lastBuildParameters {
+		if buildParameter.Name == templateVersionParameter.Name {
+			return !isValidTemplateParameterOption(buildParameter, templateVersionParameter.Options)
+		}
+	}
+	return false
+}
+
 func findTemplateVersionParameter(workspaceBuildParameter codersdk.WorkspaceBuildParameter, templateVersionParameters []codersdk.TemplateVersionParameter) *codersdk.TemplateVersionParameter {
 	for _, tvp := range templateVersionParameters {
 		if tvp.Name == workspaceBuildParameter.Name {
@@ -224,3 +243,12 @@ func findWorkspaceBuildParameter(parameterName string, params []codersdk.Workspa
 	}
 	return nil
 }
+
+func isValidTemplateParameterOption(buildParameter codersdk.WorkspaceBuildParameter, options []codersdk.TemplateVersionParameterOption) bool {
+	for _, opt := range options {
+		if opt.Value == buildParameter.Value {
+			return true
+		}
+	}
+	return false
+}
diff --git a/cli/root.go b/cli/root.go
index 2b4db5eb8b221..fad5625d909c0 100644
--- a/cli/root.go
+++ b/cli/root.go
@@ -981,6 +981,8 @@ func (p *prettyErrorFormatter) format(err error) {
 		msg = sdkError.Message
 		if sdkError.Helper != "" {
 			msg = msg + "\n" + sdkError.Helper
+		} else if sdkError.Detail != "" {
+			msg = msg + "\n" + sdkError.Detail
 		}
 		// The SDK error is usually good enough, and we don't want to overwhelm
 		// the user with output.
diff --git a/cli/update_test.go b/cli/update_test.go
index a066eaef7278c..57e49d0db3766 100644
--- a/cli/update_test.go
+++ b/cli/update_test.go
@@ -593,12 +593,138 @@ func TestUpdateValidateRichParameters(t *testing.T) {
 			assert.NoError(t, err)
 		}()
 
+		pty.ExpectMatch("Planning workspace...")
+		<-doneChan
+	})
+
+	t.Run("ParameterOptionChanged", func(t *testing.T) {
+		t.Parallel()
+
+		// Create template and workspace
+		client := coderdtest.New(t, &coderdtest.Options{IncludeProvisionerDaemon: true})
+		user := coderdtest.CreateFirstUser(t, client)
+
+		templateParameters := []*proto.RichParameter{
+			{Name: stringParameterName, Type: "string", Mutable: true, Required: true, Options: []*proto.RichParameterOption{
+				{Name: "First option", Description: "This is first option", Value: "1st"},
+				{Name: "Second option", Description: "This is second option", Value: "2nd"},
+				{Name: "Third option", Description: "This is third option", Value: "3rd"},
+			}},
+		}
+		version := coderdtest.CreateTemplateVersion(t, client, user.OrganizationID, prepareEchoResponses(templateParameters))
+		coderdtest.AwaitTemplateVersionJob(t, client, version.ID)
+		template := coderdtest.CreateTemplate(t, client, user.OrganizationID, version.ID)
+
+		inv, root := clitest.New(t, "create", "my-workspace", "--yes", "--template", template.Name, "--parameter", fmt.Sprintf("%s=%s", stringParameterName, "2nd"))
+		clitest.SetupConfig(t, client, root)
+		err := inv.Run()
+		require.NoError(t, err)
+
+		// Update template
+		updatedTemplateParameters := []*proto.RichParameter{
+			{Name: stringParameterName, Type: "string", Mutable: true, Required: true, Options: []*proto.RichParameterOption{
+				{Name: "first_option", Description: "This is first option", Value: "1"},
+				{Name: "second_option", Description: "This is second option", Value: "2"},
+				{Name: "third_option", Description: "This is third option", Value: "3"},
+			}},
+		}
+
+		updatedVersion := coderdtest.UpdateTemplateVersion(t, client, user.OrganizationID, prepareEchoResponses(updatedTemplateParameters), template.ID)
+		coderdtest.AwaitTemplateVersionJob(t, client, updatedVersion.ID)
+		err = client.UpdateActiveTemplateVersion(context.Background(), template.ID, codersdk.UpdateActiveTemplateVersion{
+			ID: updatedVersion.ID,
+		})
+		require.NoError(t, err)
+
+		// Update the workspace
+		inv, root = clitest.New(t, "update", "my-workspace")
+		clitest.SetupConfig(t, client, root)
+		doneChan := make(chan struct{})
+		pty := ptytest.New(t).Attach(inv)
+		go func() {
+			defer close(doneChan)
+			err := inv.Run()
+			assert.NoError(t, err)
+		}()
+
 		matches := []string{
+			stringParameterName, "second_option",
 			"Planning workspace...", "",
 		}
 		for i := 0; i < len(matches); i += 2 {
 			match := matches[i]
+			value := matches[i+1]
 			pty.ExpectMatch(match)
+
+			if value != "" {
+				pty.WriteLine(value)
+			}
+		}
+		<-doneChan
+	})
+
+	t.Run("ParameterOptionDisappeared", func(t *testing.T) {
+		t.Parallel()
+
+		// Create template and workspace
+		client := coderdtest.New(t, &coderdtest.Options{IncludeProvisionerDaemon: true})
+		user := coderdtest.CreateFirstUser(t, client)
+
+		templateParameters := []*proto.RichParameter{
+			{Name: stringParameterName, Type: "string", Mutable: true, Required: true, Options: []*proto.RichParameterOption{
+				{Name: "First option", Description: "This is first option", Value: "1st"},
+				{Name: "Second option", Description: "This is second option", Value: "2nd"},
+				{Name: "Third option", Description: "This is third option", Value: "3rd"},
+			}},
+		}
+		version := coderdtest.CreateTemplateVersion(t, client, user.OrganizationID, prepareEchoResponses(templateParameters))
+		coderdtest.AwaitTemplateVersionJob(t, client, version.ID)
+		template := coderdtest.CreateTemplate(t, client, user.OrganizationID, version.ID)
+
+		inv, root := clitest.New(t, "create", "my-workspace", "--yes", "--template", template.Name, "--parameter", fmt.Sprintf("%s=%s", stringParameterName, "2nd"))
+		clitest.SetupConfig(t, client, root)
+		err := inv.Run()
+		require.NoError(t, err)
+
+		// Update template - 2nd option disappeared, 4th option added
+		updatedTemplateParameters := []*proto.RichParameter{
+			{Name: stringParameterName, Type: "string", Mutable: true, Required: true, Options: []*proto.RichParameterOption{
+				{Name: "First option", Description: "This is first option", Value: "1st"},
+				{Name: "Third option", Description: "This is third option", Value: "3rd"},
+				{Name: "Fourth option", Description: "This is fourth option", Value: "4th"},
+			}},
+		}
+
+		updatedVersion := coderdtest.UpdateTemplateVersion(t, client, user.OrganizationID, prepareEchoResponses(updatedTemplateParameters), template.ID)
+		coderdtest.AwaitTemplateVersionJob(t, client, updatedVersion.ID)
+		err = client.UpdateActiveTemplateVersion(context.Background(), template.ID, codersdk.UpdateActiveTemplateVersion{
+			ID: updatedVersion.ID,
+		})
+		require.NoError(t, err)
+
+		// Update the workspace
+		inv, root = clitest.New(t, "update", "my-workspace")
+		clitest.SetupConfig(t, client, root)
+		doneChan := make(chan struct{})
+		pty := ptytest.New(t).Attach(inv)
+		go func() {
+			defer close(doneChan)
+			err := inv.Run()
+			assert.NoError(t, err)
+		}()
+
+		matches := []string{
+			stringParameterName, "Third option",
+			"Planning workspace...", "",
+		}
+		for i := 0; i < len(matches); i += 2 {
+			match := matches[i]
+			value := matches[i+1]
+			pty.ExpectMatch(match)
+
+			if value != "" {
+				pty.WriteLine(value)
+			}
 		}
 		<-doneChan
 	})
diff --git a/coderd/apidoc/docs.go b/coderd/apidoc/docs.go
index 561848ba4a1bb..58f6d3267376e 100644
--- a/coderd/apidoc/docs.go
+++ b/coderd/apidoc/docs.go
@@ -8440,11 +8440,9 @@ const docTemplate = `{
         "codersdk.JobErrorCode": {
             "type": "string",
             "enum": [
-                "MISSING_TEMPLATE_PARAMETER",
                 "REQUIRED_TEMPLATE_VARIABLES"
             ],
             "x-enum-varnames": [
-                "MissingTemplateParameter",
                 "RequiredTemplateVariables"
             ]
         },
@@ -8978,7 +8976,6 @@ const docTemplate = `{
                 },
                 "error_code": {
                     "enum": [
-                        "MISSING_TEMPLATE_PARAMETER",
                         "REQUIRED_TEMPLATE_VARIABLES"
                     ],
                     "allOf": [
diff --git a/coderd/apidoc/swagger.json b/coderd/apidoc/swagger.json
index ee7c78c369698..5d88d599e3039 100644
--- a/coderd/apidoc/swagger.json
+++ b/coderd/apidoc/swagger.json
@@ -7572,11 +7572,8 @@
     },
     "codersdk.JobErrorCode": {
       "type": "string",
-      "enum": ["MISSING_TEMPLATE_PARAMETER", "REQUIRED_TEMPLATE_VARIABLES"],
-      "x-enum-varnames": [
-        "MissingTemplateParameter",
-        "RequiredTemplateVariables"
-      ]
+      "enum": ["REQUIRED_TEMPLATE_VARIABLES"],
+      "x-enum-varnames": ["RequiredTemplateVariables"]
     },
     "codersdk.License": {
       "type": "object",
@@ -8070,7 +8067,7 @@
           "type": "string"
         },
         "error_code": {
-          "enum": ["MISSING_TEMPLATE_PARAMETER", "REQUIRED_TEMPLATE_VARIABLES"],
+          "enum": ["REQUIRED_TEMPLATE_VARIABLES"],
           "allOf": [
             {
               "$ref": "#/definitions/codersdk.JobErrorCode"
diff --git a/coderd/wsbuilder/wsbuilder.go b/coderd/wsbuilder/wsbuilder.go
index 3b6bcf1ae832b..26090a4f1be99 100644
--- a/coderd/wsbuilder/wsbuilder.go
+++ b/coderd/wsbuilder/wsbuilder.go
@@ -525,7 +525,7 @@ func (b *Builder) getParameters() (names, values []string, err error) {
 			// At this point, we've queried all the data we need from the database,
 			// so the only errors are problems with the request (missing data, failed
 			// validation, immutable parameters, etc.)
-			return nil, nil, BuildError{http.StatusBadRequest, err.Error(), err}
+			return nil, nil, BuildError{http.StatusBadRequest, fmt.Sprintf("Unable to validate parameter %q", templateVersionParameter.Name), err}
 		}
 		names = append(names, templateVersionParameter.Name)
 		values = append(values, value)
diff --git a/codersdk/provisionerdaemons.go b/codersdk/provisionerdaemons.go
index 30e0896707d56..4a3e280697f74 100644
--- a/codersdk/provisionerdaemons.go
+++ b/codersdk/provisionerdaemons.go
@@ -69,7 +69,6 @@ const (
 type JobErrorCode string
 
 const (
-	MissingTemplateParameter  JobErrorCode = "MISSING_TEMPLATE_PARAMETER"
 	RequiredTemplateVariables JobErrorCode = "REQUIRED_TEMPLATE_VARIABLES"
 )
 
@@ -81,7 +80,7 @@ type ProvisionerJob struct {
 	CompletedAt   *time.Time           `json:"completed_at,omitempty" format:"date-time"`
 	CanceledAt    *time.Time           `json:"canceled_at,omitempty" format:"date-time"`
 	Error         string               `json:"error,omitempty"`
-	ErrorCode     JobErrorCode         `json:"error_code,omitempty" enums:"MISSING_TEMPLATE_PARAMETER,REQUIRED_TEMPLATE_VARIABLES"`
+	ErrorCode     JobErrorCode         `json:"error_code,omitempty" enums:"REQUIRED_TEMPLATE_VARIABLES"`
 	Status        ProvisionerJobStatus `json:"status" enums:"pending,running,succeeded,canceling,canceled,failed"`
 	WorkerID      *uuid.UUID           `json:"worker_id,omitempty" format:"uuid"`
 	FileID        uuid.UUID            `json:"file_id" format:"uuid"`
diff --git a/docs/api/builds.md b/docs/api/builds.md
index 782e41a6f61aa..f6aa71be7a555 100644
--- a/docs/api/builds.md
+++ b/docs/api/builds.md
@@ -39,7 +39,7 @@ curl -X GET http://coder-server:8080/api/v2/users/{user}/workspace/{workspacenam
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -201,7 +201,7 @@ curl -X GET http://coder-server:8080/api/v2/workspacebuilds/{workspacebuild} \
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -759,7 +759,7 @@ curl -X GET http://coder-server:8080/api/v2/workspacebuilds/{workspacebuild}/sta
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -926,7 +926,7 @@ curl -X GET http://coder-server:8080/api/v2/workspaces/{workspace}/builds \
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -1163,7 +1163,6 @@ Status Code **200**
 
 | Property                  | Value                         |
 | ------------------------- | ----------------------------- |
-| `error_code`              | `MISSING_TEMPLATE_PARAMETER`  |
 | `error_code`              | `REQUIRED_TEMPLATE_VARIABLES` |
 | `status`                  | `pending`                     |
 | `status`                  | `running`                     |
@@ -1273,7 +1272,7 @@ curl -X POST http://coder-server:8080/api/v2/workspaces/{workspace}/builds \
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
diff --git a/docs/api/schemas.md b/docs/api/schemas.md
index 019043cfda687..b9b55dc7fbe26 100644
--- a/docs/api/schemas.md
+++ b/docs/api/schemas.md
@@ -3090,7 +3090,7 @@ AuthorizationObject can represent a "set" of objects, such as: all workspaces in
 ## codersdk.JobErrorCode
 
 ```json
-"MISSING_TEMPLATE_PARAMETER"
+"REQUIRED_TEMPLATE_VARIABLES"
 ```
 
 ### Properties
@@ -3099,7 +3099,6 @@ AuthorizationObject can represent a "set" of objects, such as: all workspaces in
 
 | Value                         |
 | ----------------------------- |
-| `MISSING_TEMPLATE_PARAMETER`  |
 | `REQUIRED_TEMPLATE_VARIABLES` |
 
 ## codersdk.License
@@ -3628,7 +3627,7 @@ AuthorizationObject can represent a "set" of objects, such as: all workspaces in
   "completed_at": "2019-08-24T14:15:22Z",
   "created_at": "2019-08-24T14:15:22Z",
   "error": "string",
-  "error_code": "MISSING_TEMPLATE_PARAMETER",
+  "error_code": "REQUIRED_TEMPLATE_VARIABLES",
   "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
   "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
   "queue_position": 0,
@@ -3666,7 +3665,6 @@ AuthorizationObject can represent a "set" of objects, such as: all workspaces in
 
 | Property     | Value                         |
 | ------------ | ----------------------------- |
-| `error_code` | `MISSING_TEMPLATE_PARAMETER`  |
 | `error_code` | `REQUIRED_TEMPLATE_VARIABLES` |
 | `status`     | `pending`                     |
 | `status`     | `running`                     |
@@ -4658,7 +4656,7 @@ AuthorizationObject can represent a "set" of objects, such as: all workspaces in
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -5371,7 +5369,7 @@ If the schedule is empty, the user will be updated to use the default schedule.|
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -5978,7 +5976,7 @@ If the schedule is empty, the user will be updated to use the default schedule.|
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -6505,7 +6503,7 @@ If the schedule is empty, the user will be updated to use the default schedule.|
           "completed_at": "2019-08-24T14:15:22Z",
           "created_at": "2019-08-24T14:15:22Z",
           "error": "string",
-          "error_code": "MISSING_TEMPLATE_PARAMETER",
+          "error_code": "REQUIRED_TEMPLATE_VARIABLES",
           "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
           "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
           "queue_position": 0,
diff --git a/docs/api/templates.md b/docs/api/templates.md
index 14ce5dec7d29f..407ab84eba439 100644
--- a/docs/api/templates.md
+++ b/docs/api/templates.md
@@ -385,7 +385,7 @@ curl -X GET http://coder-server:8080/api/v2/organizations/{organization}/templat
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -455,7 +455,7 @@ curl -X GET http://coder-server:8080/api/v2/organizations/{organization}/templat
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -549,7 +549,7 @@ curl -X POST http://coder-server:8080/api/v2/organizations/{organization}/templa
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -850,7 +850,7 @@ curl -X GET http://coder-server:8080/api/v2/templates/{template}/versions \
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -920,7 +920,6 @@ Status Code **200**
 
 | Property     | Value                         |
 | ------------ | ----------------------------- |
-| `error_code` | `MISSING_TEMPLATE_PARAMETER`  |
 | `error_code` | `REQUIRED_TEMPLATE_VARIABLES` |
 | `status`     | `pending`                     |
 | `status`     | `running`                     |
@@ -1024,7 +1023,7 @@ curl -X GET http://coder-server:8080/api/v2/templates/{template}/versions/{templ
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -1094,7 +1093,6 @@ Status Code **200**
 
 | Property     | Value                         |
 | ------------ | ----------------------------- |
-| `error_code` | `MISSING_TEMPLATE_PARAMETER`  |
 | `error_code` | `REQUIRED_TEMPLATE_VARIABLES` |
 | `status`     | `pending`                     |
 | `status`     | `running`                     |
@@ -1142,7 +1140,7 @@ curl -X GET http://coder-server:8080/api/v2/templateversions/{templateversion} \
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -1221,7 +1219,7 @@ curl -X PATCH http://coder-server:8080/api/v2/templateversions/{templateversion}
     "completed_at": "2019-08-24T14:15:22Z",
     "created_at": "2019-08-24T14:15:22Z",
     "error": "string",
-    "error_code": "MISSING_TEMPLATE_PARAMETER",
+    "error_code": "REQUIRED_TEMPLATE_VARIABLES",
     "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
     "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
     "queue_position": 0,
@@ -1347,7 +1345,7 @@ curl -X POST http://coder-server:8080/api/v2/templateversions/{templateversion}/
   "completed_at": "2019-08-24T14:15:22Z",
   "created_at": "2019-08-24T14:15:22Z",
   "error": "string",
-  "error_code": "MISSING_TEMPLATE_PARAMETER",
+  "error_code": "REQUIRED_TEMPLATE_VARIABLES",
   "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
   "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
   "queue_position": 0,
@@ -1400,7 +1398,7 @@ curl -X GET http://coder-server:8080/api/v2/templateversions/{templateversion}/d
   "completed_at": "2019-08-24T14:15:22Z",
   "created_at": "2019-08-24T14:15:22Z",
   "error": "string",
-  "error_code": "MISSING_TEMPLATE_PARAMETER",
+  "error_code": "REQUIRED_TEMPLATE_VARIABLES",
   "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
   "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
   "queue_position": 0,
diff --git a/docs/api/workspaces.md b/docs/api/workspaces.md
index f5c4aadd729c5..01b85e21b3527 100644
--- a/docs/api/workspaces.md
+++ b/docs/api/workspaces.md
@@ -67,7 +67,7 @@ curl -X POST http://coder-server:8080/api/v2/organizations/{organization}/member
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -255,7 +255,7 @@ curl -X GET http://coder-server:8080/api/v2/users/{user}/workspace/{workspacenam
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -446,7 +446,7 @@ curl -X GET http://coder-server:8080/api/v2/workspaces \
           "completed_at": "2019-08-24T14:15:22Z",
           "created_at": "2019-08-24T14:15:22Z",
           "error": "string",
-          "error_code": "MISSING_TEMPLATE_PARAMETER",
+          "error_code": "REQUIRED_TEMPLATE_VARIABLES",
           "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
           "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
           "queue_position": 0,
@@ -631,7 +631,7 @@ curl -X GET http://coder-server:8080/api/v2/workspaces/{workspace} \
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
@@ -953,7 +953,7 @@ curl -X PUT http://coder-server:8080/api/v2/workspaces/{workspace}/lock \
       "completed_at": "2019-08-24T14:15:22Z",
       "created_at": "2019-08-24T14:15:22Z",
       "error": "string",
-      "error_code": "MISSING_TEMPLATE_PARAMETER",
+      "error_code": "REQUIRED_TEMPLATE_VARIABLES",
       "file_id": "8a0cfb4f-ddc9-436d-91bb-75133c583767",
       "id": "497f6eca-6276-4993-bfeb-53cbbbba6f08",
       "queue_position": 0,
diff --git a/site/src/api/api.ts b/site/src/api/api.ts
index 7625368589e31..eefbcfba275e7 100644
--- a/site/src/api/api.ts
+++ b/site/src/api/api.ts
@@ -1225,7 +1225,6 @@ const getMissingParameters = (
 
     if (isMutableAndRequired || isImmutable) {
       requiredParameters.push(p)
-      return
     }
   })
 
@@ -1248,6 +1247,35 @@ const getMissingParameters = (
     missingParameters.push(parameter)
   }
 
+  // Check if parameter "options" changed and we can't use old build parameters.
+  templateParameters.forEach((templateParameter) => {
+    if (templateParameter.options.length === 0) {
+      return
+    }
+
+    // Check if there is a new value
+    let buildParameter = newBuildParameters.find(
+      (p) => p.name === templateParameter.name,
+    )
+
+    // If not, get the old one
+    if (!buildParameter) {
+      buildParameter = oldBuildParameters.find(
+        (p) => p.name === templateParameter.name,
+      )
+    }
+
+    if (!buildParameter) {
+      return
+    }
+
+    const matchingOption = templateParameter.options.find(
+      (option) => option.value === buildParameter?.value,
+    )
+    if (!matchingOption) {
+      missingParameters.push(templateParameter)
+    }
+  })
   return missingParameters
 }
 
diff --git a/site/src/api/typesGenerated.ts b/site/src/api/typesGenerated.ts
index 7d93591344fb8..ebe8fb61218e2 100644
--- a/site/src/api/typesGenerated.ts
+++ b/site/src/api/typesGenerated.ts
@@ -1663,13 +1663,8 @@ export type InsightsReportInterval = "day"
 export const InsightsReportIntervals: InsightsReportInterval[] = ["day"]
 
 // From codersdk/provisionerdaemons.go
-export type JobErrorCode =
-  | "MISSING_TEMPLATE_PARAMETER"
-  | "REQUIRED_TEMPLATE_VARIABLES"
-export const JobErrorCodes: JobErrorCode[] = [
-  "MISSING_TEMPLATE_PARAMETER",
-  "REQUIRED_TEMPLATE_VARIABLES",
-]
+export type JobErrorCode = "REQUIRED_TEMPLATE_VARIABLES"
+export const JobErrorCodes: JobErrorCode[] = ["REQUIRED_TEMPLATE_VARIABLES"]
 
 // From codersdk/provisionerdaemons.go
 export type LogLevel = "debug" | "error" | "info" | "trace" | "warn"
diff --git a/site/src/pages/WorkspacePage/UpdateBuildParametersDialog.tsx b/site/src/pages/WorkspacePage/UpdateBuildParametersDialog.tsx
index 33d42b6bc5ae2..860969267fb7e 100644
--- a/site/src/pages/WorkspacePage/UpdateBuildParametersDialog.tsx
+++ b/site/src/pages/WorkspacePage/UpdateBuildParametersDialog.tsx
@@ -48,6 +48,7 @@ export const UpdateBuildParametersDialog: FC<
     onSubmit: (values) => {
       onUpdate(values.rich_parameter_values)
     },
+    enableReinitialize: true,
   })
   const getFieldHelpers = getFormHelpers(form)
   const { t } = useTranslation("workspacePage")
diff --git a/site/src/xServices/createTemplate/createTemplateXService.ts b/site/src/xServices/createTemplate/createTemplateXService.ts
index 3d4205fc23f05..bfff04549fe17 100644
--- a/site/src/xServices/createTemplate/createTemplateXService.ts
+++ b/site/src/xServices/createTemplate/createTemplateXService.ts
@@ -517,11 +517,7 @@ export const createTemplateMachine =
         isNotUsingExample: ({ exampleId }) => !exampleId,
         hasFile: ({ file }) => Boolean(file),
         hasFailed: (_, { data }) =>
-          Boolean(
-            data.job.status === "failed" &&
-              !isMissingParameter(data) &&
-              !isMissingVariables(data),
-          ),
+          Boolean(data.job.status === "failed" && !isMissingVariables(data)),
         hasNoParametersOrVariables: (_, { data }) =>
           data.variables === undefined,
         hasParametersOrVariables: (_, { data }) => {
@@ -531,13 +527,6 @@ export const createTemplateMachine =
     },
   )
 
-const isMissingParameter = (version: TemplateVersion) => {
-  return Boolean(
-    version.job.error_code &&
-      version.job.error_code === "MISSING_TEMPLATE_PARAMETER",
-  )
-}
-
 const isMissingVariables = (version: TemplateVersion) => {
   return Boolean(
     version.job.error_code &&