diff --git a/.chloggen/fix_supervisor-reports-error-nop-config.yaml b/.chloggen/fix_supervisor-reports-error-nop-config.yaml
new file mode 100644
index 000000000000..0c3891fbf273
--- /dev/null
+++ b/.chloggen/fix_supervisor-reports-error-nop-config.yaml
@@ -0,0 +1,27 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: bug_fix
+
+# The name of the component, or a single word describing the area of concern, (e.g. filelogreceiver)
+component: opampsupervisor
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Report an 'Applied' remote config status when an empty config is received.
+
+# Mandatory: One or more tracking issues related to the change. You can use the PR number here if no issue exists.
+issues: [36682]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
+
+# If your change doesn't affect end users or the exported elements of any package,
+# you should instead start your pull request title with [chore] or use the "Skip Changelog" label.
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/cmd/opampsupervisor/e2e_test.go b/cmd/opampsupervisor/e2e_test.go
index 0ce4f8880991..96935b4bd0d0 100644
--- a/cmd/opampsupervisor/e2e_test.go
+++ b/cmd/opampsupervisor/e2e_test.go
@@ -1562,6 +1562,23 @@ func TestSupervisorRemoteConfigApplyStatus(t *testing.T) {
 		status, ok := remoteConfigStatus.Load().(*protobufs.RemoteConfigStatus)
 		return ok && status.Status == protobufs.RemoteConfigStatuses_RemoteConfigStatuses_FAILED
 	}, 15*time.Second, 100*time.Millisecond, "Remote config status was not set to FAILED for bad config")
+
+	// Test with nop configuration
+	emptyHash := sha256.Sum256([]byte{})
+	server.sendToSupervisor(&protobufs.ServerToAgent{
+		RemoteConfig: &protobufs.AgentRemoteConfig{
+			Config: &protobufs.AgentConfigMap{
+				ConfigMap: map[string]*protobufs.AgentConfigFile{},
+			},
+			ConfigHash: emptyHash[:],
+		},
+	})
+
+	// Check that the status is set to APPLIED
+	require.Eventually(t, func() bool {
+		status, ok := remoteConfigStatus.Load().(*protobufs.RemoteConfigStatus)
+		return ok && status.Status == protobufs.RemoteConfigStatuses_RemoteConfigStatuses_APPLIED
+	}, 5*time.Second, 10*time.Millisecond, "Remote config status was not set to APPLIED for empty config")
 }
 
 func TestSupervisorOpAmpServerPort(t *testing.T) {
diff --git a/cmd/opampsupervisor/supervisor/supervisor.go b/cmd/opampsupervisor/supervisor/supervisor.go
index e446805efb45..4607aa6d5958 100644
--- a/cmd/opampsupervisor/supervisor/supervisor.go
+++ b/cmd/opampsupervisor/supervisor/supervisor.go
@@ -78,6 +78,13 @@ func (c *configState) equal(other *configState) bool {
 	return other.mergedConfig == c.mergedConfig && other.configMapIsEmpty == c.configMapIsEmpty
 }
 
+type agentStartStatus string
+
+var (
+	agentStarting    agentStartStatus = "starting"
+	agentNotStarting agentStartStatus = "notStarting"
+)
+
 // Supervisor implements supervising of OpenTelemetry Collector and uses OpAMPClient
 // to work with an OpAMP Server.
 type Supervisor struct {
@@ -1000,22 +1007,27 @@ func (s *Supervisor) handleRestartCommand() error {
 	return err
 }
 
-func (s *Supervisor) startAgent() {
+func (s *Supervisor) startAgent() (agentStartStatus, error) {
 	if s.cfgState.Load().(*configState).configMapIsEmpty {
 		// Don't start the agent if there is no config to run
 		s.logger.Info("No config present, not starting agent.")
-		return
+		// need to manually trigger updating effective config
+		err := s.opampClient.UpdateEffectiveConfig(context.Background())
+		if err != nil {
+			s.logger.Error("The OpAMP client failed to update the effective config", zap.Error(err))
+		}
+		return agentNotStarting, nil
 	}
 
 	err := s.commander.Start(context.Background())
 	if err != nil {
 		s.logger.Error("Cannot start the agent", zap.Error(err))
-		err = s.opampClient.SetHealth(&protobufs.ComponentHealth{Healthy: false, LastError: fmt.Sprintf("Cannot start the agent: %v", err)})
+		startErr := fmt.Errorf("Cannot start the agent: %w", err)
+		err = s.opampClient.SetHealth(&protobufs.ComponentHealth{Healthy: false, LastError: startErr.Error()})
 		if err != nil {
 			s.logger.Error("Failed to report OpAMP client health", zap.Error(err))
 		}
-
-		return
+		return "", startErr
 	}
 
 	s.agentHasStarted = false
@@ -1024,6 +1036,7 @@ func (s *Supervisor) startAgent() {
 	s.startHealthCheckTicker()
 
 	s.healthChecker = healthchecker.NewHTTPHealthChecker(fmt.Sprintf("http://%s", s.agentHealthCheckEndpoint))
+	return agentStarting, nil
 }
 
 func (s *Supervisor) startHealthCheckTicker() {
@@ -1090,7 +1103,11 @@ func (s *Supervisor) runAgentProcess() {
 	if _, err := os.Stat(s.agentConfigFilePath()); err == nil {
 		// We have an effective config file saved previously. Use it to start the agent.
 		s.logger.Debug("Effective config found, starting agent initial time")
-		s.startAgent()
+		_, err := s.startAgent()
+		if err != nil {
+			s.logger.Error("starting agent failed", zap.Error(err))
+			s.reportConfigStatus(protobufs.RemoteConfigStatuses_RemoteConfigStatuses_FAILED, err.Error())
+		}
 	}
 
 	restartTimer := time.NewTimer(0)
@@ -1114,7 +1131,17 @@ func (s *Supervisor) runAgentProcess() {
 			s.logger.Debug("Restarting agent due to new config")
 			restartTimer.Stop()
 			s.stopAgentApplyConfig()
-			s.startAgent()
+			status, err := s.startAgent()
+			if err != nil {
+				s.logger.Error("starting agent with new config failed", zap.Error(err))
+				s.reportConfigStatus(protobufs.RemoteConfigStatuses_RemoteConfigStatuses_FAILED, err.Error())
+			}
+
+			if status == agentNotStarting {
+				// not starting agent because of nop config, clear timer
+				configApplyTimeoutTimer.Stop()
+				s.reportConfigStatus(protobufs.RemoteConfigStatuses_RemoteConfigStatuses_APPLIED, "")
+			}
 
 		case <-s.commander.Exited():
 			// the agent process exit is expected for restart command and will not attempt to restart
@@ -1146,7 +1173,11 @@ func (s *Supervisor) runAgentProcess() {
 
 		case <-restartTimer.C:
 			s.logger.Debug("Agent starting after start backoff")
-			s.startAgent()
+			_, err := s.startAgent()
+			if err != nil {
+				s.logger.Error("restarting agent failed", zap.Error(err))
+				s.reportConfigStatus(protobufs.RemoteConfigStatuses_RemoteConfigStatuses_FAILED, err.Error())
+			}
 
 		case <-configApplyTimeoutTimer.C:
 			if s.lastHealthFromClient == nil || !s.lastHealthFromClient.Healthy {
@@ -1242,6 +1273,9 @@ func (s *Supervisor) saveLastReceivedOwnTelemetrySettings(set *protobufs.Telemet
 }
 
 func (s *Supervisor) reportConfigStatus(status protobufs.RemoteConfigStatuses, errorMessage string) {
+	if !s.config.Capabilities.ReportsRemoteConfig {
+		s.logger.Debug("supervisor is not configured to report remote config status")
+	}
 	err := s.opampClient.SetRemoteConfigStatus(&protobufs.RemoteConfigStatus{
 		LastRemoteConfigHash: s.remoteConfig.GetConfigHash(),
 		Status:               status,