diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0159ad092..697709beb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,7 @@
 - Bug #558: Fix `SoftDelete` with initiated custom date (@Tigrov)
 - Enh #564: Clarify `$relations` parameter type in `JoinWith::__construct()` from `array<string|Closure>` to
   `array<string|callable(ActiveQueryInterface):void>` (@vjik)
+- Bug #561: Fix `ActiveRecordInterface::upsert()` with `$updateProperties = false` (@Tigrov)
 
 ## 1.0.2 March 11, 2026
 
diff --git a/src/Event/Handler/SetValueOnUpdate.php b/src/Event/Handler/SetValueOnUpdate.php
index e4c09772d..be698ff0a 100644
--- a/src/Event/Handler/SetValueOnUpdate.php
+++ b/src/Event/Handler/SetValueOnUpdate.php
@@ -49,19 +49,21 @@ private function beforeUpdate(BeforeUpdate $event): void
 
     private function beforeUpsert(BeforeUpsert $event): void
     {
+        if ($event->updateProperties === false) {
+            return;
+        }
+
         $model = $event->model;
         $value = is_callable($this->value) ? ($this->value)($event) : $this->value;
 
         foreach ($this->getPropertyNames() as $propertyName) {
             if ($model->hasProperty($propertyName)) {
-                $updateProperties ??= match ($event->updateProperties) {
-                    true => array_diff_key(
+                $updateProperties ??= $event->updateProperties === true
+                    ? array_diff_key(
                         $event->insertProperties ?? $model->newValues(),
                         array_fill_keys($model->primaryKey(), null),
-                    ),
-                    false => [],
-                    default => $event->updateProperties,
-                };
+                    )
+                    : $event->updateProperties;
 
                 $updateProperties[$propertyName] = $value;
             }
diff --git a/tests/Driver/Oracle/EventsTraitTest.php b/tests/Driver/Oracle/EventsTraitTest.php
index 5f8b936aa..fa93ed69c 100644
--- a/tests/Driver/Oracle/EventsTraitTest.php
+++ b/tests/Driver/Oracle/EventsTraitTest.php
@@ -9,6 +9,11 @@
 
 final class EventsTraitTest extends \Yiisoft\ActiveRecord\Tests\EventsTraitTest
 {
+    public function testSetValueOnUpdateOnUpsertWithUpdatePropertiesFalse(): void
+    {
+        $this->markTestSkipped('Yiisoft\Db\Oracle\DMLQueryBuilder::upsertReturning() is not supported by Oracle.');
+    }
+
     protected static function createConnection(): ConnectionInterface
     {
         return (new OracleHelper())->createConnection();
diff --git a/tests/EventsTraitTest.php b/tests/EventsTraitTest.php
index f3fbf309b..af7292878 100644
--- a/tests/EventsTraitTest.php
+++ b/tests/EventsTraitTest.php
@@ -12,6 +12,7 @@
 use Yiisoft\ActiveRecord\Event\BeforeUpsert;
 use Yiisoft\ActiveRecord\Event\EventDispatcherProvider;
 use Yiisoft\ActiveRecord\Tests\Stubs\ActiveRecord\CategoryEventsModel;
+use Yiisoft\ActiveRecord\Tests\Stubs\ActiveRecord\SetValueOnUpdateAr;
 use Yiisoft\Test\Support\EventDispatcher\SimpleEventDispatcher;
 
 abstract class EventsTraitTest extends TestCase
@@ -251,4 +252,15 @@ static function (object $event): void {
         $this->assertNull($model->id);
         $this->assertSame('Custom Return Upsert', $model->name);
     }
+
+    public function testSetValueOnUpdateOnUpsertWithUpdatePropertiesFalse(): void
+    {
+        $model = new SetValueOnUpdateAr();
+        $model->id = 1;
+        $model->name = 'Vasya';
+
+        $model->upsert(['id' => 1], false);
+
+        $this->assertSame('Vasya', $model->name);
+    }
 }