diff --git a/esphome/components/ethernet/ethernet_component.cpp b/esphome/components/ethernet/ethernet_component.cpp
index 844a30bd8b..68f57b4589 100644
--- a/esphome/components/ethernet/ethernet_component.cpp
+++ b/esphome/components/ethernet/ethernet_component.cpp
@@ -300,6 +300,7 @@ void EthernetComponent::loop() {
         this->state_ = EthernetComponentState::CONNECTING;
         this->start_connect_();
       } else {
+        this->finish_connect_();
         // When connected and stable, disable the loop to save CPU cycles
         this->disable_loop();
       }
@@ -486,10 +487,33 @@ void EthernetComponent::got_ip6_event_handler(void *arg, esp_event_base_t event_
 }
 #endif /* USE_NETWORK_IPV6 */
 
+void EthernetComponent::finish_connect_() {
+#if USE_NETWORK_IPV6
+  // Retry IPv6 link-local setup if it failed during initial connect
+  // This handles the case where IPv6 setup failed in start_connect_()
+  // because the interface wasn't ready (usually cable unplugged/link down,
+  // rarely a timing issue during state transitions).
+  // By now we're in CONNECTED state so the interface is definitely up.
+  if (!this->ipv6_setup_done_) {
+    esp_err_t err = esp_netif_create_ip6_linklocal(this->eth_netif_);
+    if (err == ESP_OK) {
+      ESP_LOGD(TAG, "IPv6 link-local address created (retry succeeded)");
+    }
+    // Always set the flag to prevent continuous retries
+    // If IPv6 setup fails here with the interface up and stable, it's
+    // likely a persistent issue (IPv6 disabled at router, hardware
+    // limitation, etc.) that won't be resolved by further retries.
+    // The device continues to work with IPv4.
+    this->ipv6_setup_done_ = true;
+  }
+#endif /* USE_NETWORK_IPV6 */
+}
+
 void EthernetComponent::start_connect_() {
   global_eth_component->got_ipv4_address_ = false;
 #if USE_NETWORK_IPV6
   global_eth_component->ipv6_count_ = 0;
+  this->ipv6_setup_done_ = false;
 #endif /* USE_NETWORK_IPV6 */
   this->connect_begin_ = millis();
   this->status_set_warning(LOG_STR("waiting for IP configuration"));
@@ -545,9 +569,22 @@ void EthernetComponent::start_connect_() {
     }
   }
 #if USE_NETWORK_IPV6
+  // Attempt to create IPv6 link-local address
+  // Note: this may fail with ESP_FAIL if the interface is not up yet
+  // (typically cable unplugged, but could be timing during link transitions).
+  // We'll retry in the CONNECTED state if it fails here.
   err = esp_netif_create_ip6_linklocal(this->eth_netif_);
   if (err != ESP_OK) {
-    ESPHL_ERROR_CHECK(err, "Enable IPv6 link local failed");
+    if (err == ESP_ERR_ESP_NETIF_INVALID_PARAMS) {
+      // This is a programming error, not a transient failure
+      ESPHL_ERROR_CHECK(err, "esp_netif_create_ip6_linklocal invalid parameters");
+    } else {
+      // ESP_FAIL means the interface isn't up yet (e.g., cable unplugged, link down)
+      // This is expected during reconnection attempts after network interruptions
+      // We'll retry once we reach CONNECTED state and the interface is actually up
+      ESP_LOGW(TAG, "esp_netif_create_ip6_linklocal failed: %s", esp_err_to_name(err));
+      // Don't mark component as failed - this is a transient error
+    }
   }
 #endif /* USE_NETWORK_IPV6 */
 
diff --git a/esphome/components/ethernet/ethernet_component.h b/esphome/components/ethernet/ethernet_component.h
index bdcda6afb4..3d2713ee5c 100644
--- a/esphome/components/ethernet/ethernet_component.h
+++ b/esphome/components/ethernet/ethernet_component.h
@@ -102,6 +102,7 @@ class EthernetComponent : public Component {
 #endif /* LWIP_IPV6 */
 
   void start_connect_();
+  void finish_connect_();
   void dump_connect_params_();
   /// @brief Set `RMII Reference Clock Select` bit for KSZ8081.
   void ksz8081_set_clock_reference_(esp_eth_mac_t *mac);
@@ -144,6 +145,7 @@ class EthernetComponent : public Component {
   bool got_ipv4_address_{false};
 #if LWIP_IPV6
   uint8_t ipv6_count_{0};
+  bool ipv6_setup_done_{false};
 #endif /* LWIP_IPV6 */
 
   // Pointers at the end (naturally aligned)
diff --git a/requirements.txt b/requirements.txt
index 0b9a37005d..4736e2a024 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -12,7 +12,7 @@ platformio==6.1.18  # When updating platformio, also update /docker/Dockerfile
 esptool==5.0.2
 click==8.1.7
 esphome-dashboard==20250904.0
-aioesphomeapi==40.1.0
+aioesphomeapi==40.2.0
 zeroconf==0.147.2
 puremagic==1.30
 ruamel.yaml==0.18.15 # dashboard_import