diff --git a/CHANGELOG.md b/CHANGELOG.md
index e216151edff..b9ab36e2bb5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,7 @@
 
 ### Bug fixes and improvements
 (Add entries below in the order of server, console, cli, docs, others)
+- server: fix add source API wiping out source's metadata when replace_configuration is true
 - console: add foreign key CRUD functionality to ms sql server tables
 - console: allow tracking of custom SQL functions having composite type (rowtype) input arguments
 - console: allow input object presets in remote schema permissions
@@ -18,7 +19,7 @@
 - server: fix asymptotic performance of fetching from the event_log table
 - console: add `pool_timeout`, `connection_lifetime` and `isolation_level` connection params to connect database form
 - console: add check constraints and comments to MS SQL Server tables' read-only modify page
-- console: add create table functionality for MS SQL Server 
+- console: add create table functionality for MS SQL Server
 - console: update connect database form with SSL certificates
 - console: add drop table functionality to MS SQL Server tables
 - console: allow renaming data sources
diff --git a/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs b/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
index 884961ed66b..ad8c207878f 100644
--- a/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
+++ b/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
@@ -46,13 +46,14 @@ runAddSource
   => AddSource b -> m EncJSON
 runAddSource (AddSource name sourceConfig replaceConfiguration) = do
   sources <- scSources <$> askSchemaCache
-  let sourceMetadata = mkSourceMetadata @b name sourceConfig
 
   metadataModifier <- MetadataModifier <$>
     if HM.member name sources then
-      if replaceConfiguration then pure $ metaSources.ix name .~ sourceMetadata
+      if replaceConfiguration then pure $ metaSources.ix name.toSourceMetadata @b.smConfiguration .~ sourceConfig
       else throw400 AlreadyExists $ "source with name " <> name <<> " already exists"
-    else pure $ metaSources %~ OMap.insert name sourceMetadata
+    else do
+      let sourceMetadata = mkSourceMetadata @b name sourceConfig
+      pure $ metaSources %~ OMap.insert name sourceMetadata
 
   buildSchemaCacheFor (MOSource name) metadataModifier
   pure successMsg