diff --git a/x-pack/platform/plugins/shared/streams/server/lib/streams/state_management/streams/wired_stream.ts b/x-pack/platform/plugins/shared/streams/server/lib/streams/state_management/streams/wired_stream.ts
index 177abcc9ab95e..636715c7f22f0 100644
--- a/x-pack/platform/plugins/shared/streams/server/lib/streams/state_management/streams/wired_stream.ts
+++ b/x-pack/platform/plugins/shared/streams/server/lib/streams/state_management/streams/wired_stream.ts
@@ -6,7 +6,12 @@
  */
 
 import { isNotFoundError } from '@kbn/es-errors';
-import { IngestStreamLifecycle, Streams, isInheritLifecycle } from '@kbn/streams-schema';
+import {
+  IngestStreamLifecycle,
+  Streams,
+  findInheritedLifecycle,
+  isInheritLifecycle,
+} from '@kbn/streams-schema';
 import {
   getAncestors,
   getAncestorsAndSelf,
@@ -437,6 +442,9 @@ export class WiredStream extends StreamActiveRecord<Streams.WiredStream.Definiti
   }
 
   protected async doDetermineCreateActions(): Promise<ElasticsearchAction[]> {
+    const ancestors = await this.dependencies.streamsClient.getAncestors(this._definition.name);
+    const lifecycle = findInheritedLifecycle(this._definition, ancestors);
+
     return [
       {
         type: 'upsert_component_template',
@@ -474,7 +482,7 @@ export class WiredStream extends StreamActiveRecord<Streams.WiredStream.Definiti
         type: 'update_lifecycle',
         request: {
           name: this._definition.name,
-          lifecycle: this.getLifecycle(),
+          lifecycle,
         },
       },
       {
diff --git a/x-pack/test/api_integration/deployment_agnostic/apis/observability/streams/lifecycle.ts b/x-pack/test/api_integration/deployment_agnostic/apis/observability/streams/lifecycle.ts
index 79239c9264b08..021146c4216db 100644
--- a/x-pack/test/api_integration/deployment_agnostic/apis/observability/streams/lifecycle.ts
+++ b/x-pack/test/api_integration/deployment_agnostic/apis/observability/streams/lifecycle.ts
@@ -156,6 +156,27 @@ export default function ({ getService }: DeploymentAgnosticFtrProviderContext) {
         );
       });
 
+      it('inherits on creation', async () => {
+        const rootDefinition = await getStream(apiClient, 'logs');
+        await putStream(apiClient, 'logs', {
+          dashboards: [],
+          queries: [],
+          stream: {
+            description: '',
+            ingest: {
+              ...(rootDefinition as Streams.WiredStream.GetResponse).stream.ingest,
+              lifecycle: { dsl: { data_retention: '50d' } },
+            },
+          },
+        });
+        await putStream(apiClient, 'logs.inheritsatcreation', wiredPutBody);
+
+        await expectLifecycle(['logs.inheritsatcreation'], {
+          dsl: { data_retention: '50d' },
+          from: 'logs',
+        });
+      });
+
       it('inherits dsl', async () => {
         // create two branches, one that inherits from root and
         // another one that overrides the root lifecycle