diff --git a/.nextchanges/cli/labs-venv-missing-interpreter.md b/.nextchanges/cli/labs-venv-missing-interpreter.md
new file mode 100644
index 00000000000..1dea04bba9b
--- /dev/null
+++ b/.nextchanges/cli/labs-venv-missing-interpreter.md
@@ -0,0 +1 @@
+Recreate a labs virtualenv when its Python interpreter is missing so `databricks labs install` recovers after the previous interpreter is removed.
diff --git a/cmd/labs/project/installer.go b/cmd/labs/project/installer.go
index 32a74b6808f..bb5e97b804b 100644
--- a/cmd/labs/project/installer.go
+++ b/cmd/labs/project/installer.go
@@ -239,7 +239,15 @@ func (i *installer) setupPythonVirtualEnvironment(ctx context.Context, w *databr
 	venvPath := i.virtualEnvPath(ctx)
 	log.Debugf(ctx, "Creating Python Virtual Environment at: %s", venvPath)
 	sp.Update("Creating Virtual Environment with Python " + py.Version)
-	_, err = process.Background(ctx, []string{py.Path, "-m", "venv", venvPath})
+	venvArgs := []string{py.Path, "-m", "venv", venvPath}
+	// python -m venv does not replace existing interpreter symlinks unless --clear
+	// is passed. A leftover venv after Homebrew retires its Python then makes
+	// every later labs install fail on a dangling bin/python3.
+	if shouldRecreateVenv(venvPath, i.virtualEnvPython(ctx)) {
+		log.Infof(ctx, "Existing virtualenv at %s has a missing interpreter, recreating it", venvPath)
+		venvArgs = []string{py.Path, "-m", "venv", "--clear", venvPath}
+	}
+	_, err = process.Background(ctx, venvArgs)
 	if err != nil {
 		return fmt.Errorf("create venv: %w", err)
 	}
@@ -270,6 +278,14 @@ func (i *installer) setupPythonVirtualEnvironment(ctx context.Context, w *databr
 	return i.installPythonDependencies(ctx, ".")
 }
 
+func shouldRecreateVenv(venvPath, pythonBin string) bool {
+	if _, err := os.Stat(venvPath); err != nil {
+		return false
+	}
+	_, err := os.Stat(pythonBin)
+	return err != nil
+}
+
 func (i *installer) installPythonDependencies(ctx context.Context, spec string) error {
 	if !i.IsPythonProject() {
 		return nil
diff --git a/cmd/labs/project/installer_venv_test.go b/cmd/labs/project/installer_venv_test.go
new file mode 100644
index 00000000000..94a0347c215
--- /dev/null
+++ b/cmd/labs/project/installer_venv_test.go
@@ -0,0 +1,41 @@
+package project
+
+import (
+	"os"
+	"path/filepath"
+	"runtime"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+)
+
+func TestShouldRecreateVenv(t *testing.T) {
+	dir := t.TempDir()
+	venvPath := filepath.Join(dir, "venv")
+	pythonBin := filepath.Join(venvPath, "bin", "python3")
+	if runtime.GOOS == "windows" {
+		pythonBin = filepath.Join(venvPath, "Scripts", "python.exe")
+	}
+
+	require.False(t, shouldRecreateVenv(venvPath, pythonBin))
+
+	require.NoError(t, os.MkdirAll(filepath.Dir(pythonBin), 0o755))
+	require.True(t, shouldRecreateVenv(venvPath, pythonBin))
+
+	require.NoError(t, os.WriteFile(pythonBin, []byte("python"), 0o755))
+	require.False(t, shouldRecreateVenv(venvPath, pythonBin))
+}
+
+func TestShouldRecreateVenvDanglingInterpreter(t *testing.T) {
+	if runtime.GOOS == "windows" {
+		t.Skip("symlink dangling interpreter check is unix specific")
+	}
+
+	dir := t.TempDir()
+	venvPath := filepath.Join(dir, "venv")
+	binDir := filepath.Join(venvPath, "bin")
+	pythonBin := filepath.Join(binDir, "python3")
+	require.NoError(t, os.MkdirAll(binDir, 0o755))
+	require.NoError(t, os.Symlink(filepath.Join(dir, "missing-python"), pythonBin))
+	require.True(t, shouldRecreateVenv(venvPath, pythonBin))
+}