diff --git a/.changes/unreleased/Fixes-20231016-163953.yaml b/.changes/unreleased/Fixes-20231016-163953.yaml
new file mode 100644
index 00000000000..ea21584bee1
--- /dev/null
+++ b/.changes/unreleased/Fixes-20231016-163953.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: Fix partial parsing not working for semantic model change
+time: 2023-10-16T16:39:53.05058-07:00
+custom:
+  Author: ChenyuLInx
+  Issue: "8859"
diff --git a/core/dbt/parser/partial.py b/core/dbt/parser/partial.py
index 9c088ec096c..7fcfe48f87d 100644
--- a/core/dbt/parser/partial.py
+++ b/core/dbt/parser/partial.py
@@ -922,6 +922,9 @@ def delete_schema_semantic_model(self, schema_file, semantic_model_dict):
             if unique_id in self.saved_manifest.semantic_models:
                 semantic_model = self.saved_manifest.semantic_models[unique_id]
                 if semantic_model.name == semantic_model_name:
+                    # Need to find everything that referenced this semantic model and schedule for parsing
+                    if unique_id in self.saved_manifest.child_map:
+                        self.schedule_nodes_for_parsing(self.saved_manifest.child_map[unique_id])
                     self.saved_manifest.semantic_models.pop(unique_id)
                     schema_file.semantic_models.remove(unique_id)
             elif unique_id in self.saved_manifest.disabled:
diff --git a/tests/functional/semantic_models/fixtures.py b/tests/functional/semantic_models/fixtures.py
index be5d88a7809..8084af09c33 100644
--- a/tests/functional/semantic_models/fixtures.py
+++ b/tests/functional/semantic_models/fixtures.py
@@ -86,6 +86,39 @@
       agg_time_dimension: created_at
 """
 
+semantic_model_people_diff_name_yml = """
+version: 2
+
+semantic_models:
+  - name: semantic_people_diff_name
+    label: "Semantic People"
+    model: ref('people')
+    dimensions:
+      - name: favorite_color
+        label: "Favorite Color"
+        type: categorical
+      - name: created_at
+        label: "Created At"
+        type: TIME
+        type_params:
+          time_granularity: day
+    measures:
+      - name: years_tenure
+        label: "Years Tenure"
+        agg: SUM
+        expr: tenure
+      - name: people
+        label: "People"
+        agg: count
+        expr: id
+    entities:
+      - name: id
+        label: "Primary ID"
+        type: primary
+    defaults:
+      agg_time_dimension: created_at
+"""
+
 semantic_model_descriptions = """
 {% docs semantic_model_description %} foo {% enddocs %}
 {% docs dimension_description %} bar {% enddocs %}
diff --git a/tests/functional/semantic_models/test_semantic_models.py b/tests/functional/semantic_models/test_semantic_models.py
index 11fdfc32456..945b7fdc04b 100644
--- a/tests/functional/semantic_models/test_semantic_models.py
+++ b/tests/functional/semantic_models/test_semantic_models.py
@@ -3,11 +3,13 @@
 from dbt.contracts.graph.manifest import Manifest
 from dbt.exceptions import CompilationError
 from dbt.tests.util import run_dbt
+from dbt.tests.util import write_file
 from tests.functional.semantic_models.fixtures import (
     models_people_sql,
     simple_metricflow_time_spine_sql,
     semantic_model_people_yml,
     models_people_metrics_yml,
+    semantic_model_people_diff_name_yml,
     semantic_model_people_yml_with_docs,
     semantic_model_descriptions,
 )
@@ -71,3 +73,27 @@ def test_unknown_model_raises_issue(self, project):
         with pytest.raises(CompilationError) as excinfo:
             run_dbt(["parse"])
         assert "depends on a node named 'people' which was not found" in str(excinfo.value)
+
+
+class TestSemanticModelPartialParsing:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "people.sql": models_people_sql,
+            "metricflow_time_spine.sql": simple_metricflow_time_spine_sql,
+            "semantic_models.yml": semantic_model_people_yml,
+            "people_metrics.yml": models_people_metrics_yml,
+        }
+
+    def test_semantic_model_deleted_partial_parsing(self, project):
+        # First, use the default saved_queries.yml to define our saved_query, and
+        # run the dbt parse command
+        run_dbt(["parse"])
+        # Next, modify the default semantic_models.yml to remove the saved query.
+        write_file(
+            semantic_model_people_diff_name_yml,
+            project.project_root,
+            "models",
+            "semantic_models.yml",
+        )
+        run_dbt(["compile"])