diff --git a/tests/unit/test_scheduler.py b/tests/unit/test_scheduler.py
index 0016628090..6544e39607 100644
--- a/tests/unit/test_scheduler.py
+++ b/tests/unit/test_scheduler.py
@@ -1783,7 +1783,6 @@ class TestScheduler(ZuulTestCase):
                 held_node = node
                 break
         self.assertIsNotNone(held_node)
-
         # Validate node has recorded the failed job
         self.assertEqual(
             held_node['hold_job'],
@@ -1819,6 +1818,12 @@ class TestScheduler(ZuulTestCase):
         request3 = self.zk.getHoldRequest(request2.id)
         self.assertEqual(request2.current_count, request3.current_count)
 
+        # Deleting hold request should set held nodes to used
+        self.zk.deleteHoldRequest(request3)
+        node_states = [n['state'] for n in self.fake_nodepool.getNodes()]
+        self.assertEqual(3, len(node_states))
+        self.assertEqual([zuul.model.STATE_USED] * 3, node_states)
+
     @simple_layout('layouts/autohold.yaml')
     def test_autohold_info(self):
         client = zuul.rpcclient.RPCClient('127.0.0.1',
diff --git a/zuul/zk.py b/zuul/zk.py
index e3691ce953..d267dfc348 100644
--- a/zuul/zk.py
+++ b/zuul/zk.py
@@ -583,12 +583,58 @@ class ZooKeeper(object):
             path = self.HOLD_REQUEST_ROOT + "/" + hold_request.id
             self.client.set(path, hold_request.serialize())
 
+    def _markHeldNodesAsUsed(self, hold_request):
+        '''
+        :returns: True if all nodes marked USED, False otherwise.
+        '''
+        failure = False
+        for node_id in hold_request.nodes:
+            node = self.getNode(node_id)
+            if not node or node['state'] == zuul.model.STATE_USED:
+                continue
+
+            node['state'] = zuul.model.STATE_USED
+
+            name = None
+            label = None
+            if 'name' in node:
+                name = node['name']
+            if 'label' in node:
+                label = node['label']
+
+            node_obj = zuul.model.Node(name, label)
+            node_obj.updateFromDict(node)
+
+            try:
+                self.lockNode(node_obj, blocking=False)
+                self.storeNode(node_obj)
+            except Exception:
+                self.log.exception("Cannot change HELD node state to USED "
+                                   "for node %s in request %s",
+                                   node_obj.id, hold_request.id)
+                failure = True
+            finally:
+                try:
+                    if node_obj.lock:
+                        self.unlockNode(node_obj)
+                except Exception:
+                    self.log.exception(
+                        "Failed to unlock HELD node %s for request %s",
+                        node_obj.id, hold_request.id)
+
+        return not failure
+
     def deleteHoldRequest(self, hold_request):
         '''
         Delete a hold request.
 
         :param HoldRequest hold_request: Object representing the hold request.
         '''
+        if not self._markHeldNodesAsUsed(hold_request):
+            self.log.info("Unable to delete hold request %s because "
+                          "not all nodes marked as USED.", hold_request.id)
+            return
+
         path = self.HOLD_REQUEST_ROOT + "/" + hold_request.id
         try:
             self.client.delete(path, recursive=True)