diff --git a/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.test.ts b/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.test.ts
index c649c020b1e..5e6ef8d3616 100644
--- a/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.test.ts
+++ b/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.test.ts
@@ -257,6 +257,63 @@ describe('SettingsUsageAndPlan', () => {
 			expect(usageStore.activateLicense).toHaveBeenCalledTimes(1);
 		});
 
+		it('should preserve activation key during EULA flow and send it with acceptance', async () => {
+			usageStore.isLoading = false;
+			usageStore.planName = 'Community';
+			usersStore.currentUser = {
+				globalScopes: ['license:manage'],
+			} as IUser;
+			rbacStore.setGlobalScopes(['license:manage']);
+			usageStore.activateLicense
+				.mockRejectedValueOnce({
+					httpStatusCode: 400,
+					meta: { eulaUrl: 'https://example.com/eula.pdf' },
+				})
+				.mockResolvedValueOnce(undefined);
+
+			const { getByRole, findByTestId } = renderComponent();
+
+			// Open activation modal and enter key
+			await userEvent.click(getByRole('button', { name: /activation/i }));
+			const input = document.querySelector('input') as HTMLInputElement;
+			await userEvent.type(input, 'test-key-123');
+
+			// Click activate - this should trigger EULA modal
+			await userEvent.click(getByRole('button', { name: /activate/i }));
+
+			// EULA modal should appear
+			const eulaModal = await findByTestId('eula-acceptance-modal');
+			expect(eulaModal).toBeInTheDocument();
+
+			// Accept EULA
+			const checkbox = (await findByTestId('eula-checkbox')).querySelector(
+				'input[type="checkbox"]',
+			) as HTMLInputElement;
+			await userEvent.click(checkbox);
+
+			const acceptButton = await findByTestId('eula-accept-button');
+			await userEvent.click(acceptButton);
+
+			// Verify the activation key was preserved and sent with EULA acceptance
+			await waitFor(() => {
+				expect(usageStore.activateLicense).toHaveBeenCalledTimes(2);
+				// First call without EULA
+				expect(usageStore.activateLicense).toHaveBeenNthCalledWith(1, 'test-key-123', undefined);
+				// Second call with EULA URL - key should still be present
+				expect(usageStore.activateLicense).toHaveBeenNthCalledWith(
+					2,
+					'test-key-123',
+					'https://example.com/eula.pdf',
+				);
+			});
+
+			expect(mockToast.showMessage).toHaveBeenCalledWith(
+				expect.objectContaining({
+					type: 'success',
+				}),
+			);
+		});
+
 		it('should show error when activation fails without EULA requirement', async () => {
 			usageStore.isLoading = false;
 			usageStore.planName = 'Community';
@@ -424,5 +481,41 @@ describe('SettingsUsageAndPlan', () => {
 				expect(reopenedInput).toBeInTheDocument();
 			});
 		});
+
+		it('should clear activation key when cancel button is clicked', async () => {
+			usageStore.isLoading = false;
+			usersStore.currentUser = {
+				globalScopes: ['license:manage'],
+			} as IUser;
+			rbacStore.setGlobalScopes(['license:manage']);
+
+			const { getByRole, findByPlaceholderText } = renderComponent();
+
+			await waitAllPromises();
+
+			// Open activation modal
+			await userEvent.click(getByRole('button', { name: /activation/i }));
+			const input = await findByPlaceholderText('Activation key');
+			expect(input).toBeInTheDocument();
+
+			// Enter activation key
+			await userEvent.type(input, 'test-key-should-be-cleared');
+			expect(input).toHaveValue('test-key-should-be-cleared');
+
+			// Click cancel
+			const cancelButton = getByRole('button', { name: /cancel/i });
+			await userEvent.click(cancelButton);
+
+			await waitAllPromises();
+
+			// Reopen modal
+			await userEvent.click(getByRole('button', { name: /activation/i }));
+
+			// Input should be cleared
+			await waitFor(async () => {
+				const reopenedInput = await findByPlaceholderText('Activation key');
+				expect(reopenedInput).toHaveValue('');
+			});
+		});
 	});
 });
diff --git a/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.vue b/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.vue
index 1a5a38e229f..5c0beb4043b 100644
--- a/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.vue
+++ b/packages/frontend/editor-ui/src/features/settings/usage/views/SettingsUsageAndPlan.vue
@@ -111,9 +111,9 @@ const onLicenseActivation = async (eulaUri?: string) => {
 	} catch (error: unknown) {
 		// Check if error requires EULA acceptance using type guard
 		if (isEulaError(error)) {
-			activationKeyModal.value = false;
 			eulaUrl.value = error.meta.eulaUrl;
 			eulaModal.value = true;
+			activationKeyModal.value = false;
 			return;
 		}
 
@@ -138,6 +138,18 @@ const onEulaCancel = () => {
 	activationKey.value = '';
 };
 
+const onActivationCancel = () => {
+	activationKeyModal.value = false;
+	activationKey.value = '';
+};
+
+const onActivationModalClose = () => {
+	// Only clear key if not transitioning to EULA flow
+	if (!eulaModal.value) {
+		onActivationCancel();
+	}
+};
+
 onMounted(async () => {
 	documentTitle.set(locale.baseText('settings.usageAndPlan.title'));
 	usageStore.setLoading(true);
@@ -187,10 +199,6 @@ const onManagePlan = () => {
 	sendUsageTelemetry('manage_plan');
 };
 
-const onDialogClosed = () => {
-	activationKey.value = '';
-};
-
 const onDialogOpened = () => {
 	activationKeyInput.value?.focus();
 };
@@ -307,7 +315,7 @@ const openCommunityRegisterModal = () => {
 				top="0"
 				:title="locale.baseText('settings.usageAndPlan.dialog.activation.title')"
 				:modal-class="$style.center"
-				@closed="onDialogClosed"
+				@closed="onActivationModalClose"
 				@opened="onDialogOpened"
 			>
 				<template #default>
@@ -318,7 +326,7 @@ const openCommunityRegisterModal = () => {
 					/>
 				</template>
 				<template #footer>
-					<N8nButton type="secondary" @click="activationKeyModal = false">
+					<N8nButton type="secondary" @click="onActivationCancel">
 						{{ locale.baseText('settings.usageAndPlan.dialog.activation.cancel') }}
 					</N8nButton>
 					<N8nButton :disabled="!activationKey" @click="() => onLicenseActivation()">