diff --git a/changelog.d/8265.bugfix b/changelog.d/8265.bugfix
new file mode 100644
index 000000000..981a836d2
--- /dev/null
+++ b/changelog.d/8265.bugfix
@@ -0,0 +1 @@
+Fix logstanding bug which could lead to incomplete database upgrades on SQLite.
diff --git a/synapse/storage/prepare_database.py b/synapse/storage/prepare_database.py
index 964d8d9eb..229acb2da 100644
--- a/synapse/storage/prepare_database.py
+++ b/synapse/storage/prepare_database.py
@@ -19,12 +19,15 @@ import logging
 import os
 import re
 from collections import Counter
-from typing import TextIO
+from typing import Optional, TextIO
 
 import attr
 
+from synapse.config.homeserver import HomeServerConfig
+from synapse.storage.engines import BaseDatabaseEngine
 from synapse.storage.engines.postgres import PostgresEngine
-from synapse.storage.types import Cursor
+from synapse.storage.types import Connection, Cursor
+from synapse.types import Collection
 
 logger = logging.getLogger(__name__)
 
@@ -47,7 +50,12 @@ class UpgradeDatabaseException(PrepareDatabaseException):
     pass
 
 
-def prepare_database(db_conn, database_engine, config, databases=["main", "state"]):
+def prepare_database(
+    db_conn: Connection,
+    database_engine: BaseDatabaseEngine,
+    config: Optional[HomeServerConfig],
+    databases: Collection[str] = ["main", "state"],
+):
     """Prepares a physical database for usage. Will either create all necessary tables
     or upgrade from an older schema version.
 
@@ -57,15 +65,24 @@ def prepare_database(db_conn, database_engine, config, databases=["main", "state
     Args:
         db_conn:
         database_engine:
-        config (synapse.config.homeserver.HomeServerConfig|None):
+        config :
             application config, or None if we are connecting to an existing
             database which we expect to be configured already
-        databases (list[str]): The name of the databases that will be used
+        databases: The name of the databases that will be used
             with this physical database. Defaults to all databases.
     """
 
     try:
         cur = db_conn.cursor()
+
+        # sqlite does not automatically start transactions for DDL / SELECT statements,
+        # so we start one before running anything. This ensures that any upgrades
+        # are either applied completely, or not at all.
+        #
+        # (psycopg2 automatically starts a transaction as soon as we run any statements
+        # at all, so this is redundant but harmless there.)
+        cur.execute("BEGIN TRANSACTION")
+
         version_info = _get_or_create_schema_state(cur, database_engine)
 
         if version_info: