diff --git a/eng/versioning/version_client.txt b/eng/versioning/version_client.txt
index 9146424072ccf..586ecf1aee088 100644
--- a/eng/versioning/version_client.txt
+++ b/eng/versioning/version_client.txt
@@ -253,7 +253,7 @@ com.azure.spring:spring-cloud-azure-stream-binder-servicebus;4.14.0;4.15.0-beta.
 com.azure.spring:spring-cloud-azure-trace-sleuth;4.14.0;4.15.0-beta.1
 com.azure.resourcemanager:azure-resourcemanager;2.35.0;2.36.0-beta.1
 com.azure.resourcemanager:azure-resourcemanager-appplatform;2.35.0;2.36.0-beta.1
-com.azure.resourcemanager:azure-resourcemanager-appservice;2.35.0;2.36.0-beta.1
+com.azure.resourcemanager:azure-resourcemanager-appservice;2.35.1;2.36.0-beta.1
 com.azure.resourcemanager:azure-resourcemanager-authorization;2.35.0;2.36.0-beta.1
 com.azure.resourcemanager:azure-resourcemanager-cdn;2.35.0;2.36.0-beta.1
 com.azure.resourcemanager:azure-resourcemanager-compute;2.35.0;2.36.0-beta.1
diff --git a/sdk/resourcemanager/azure-resourcemanager-appservice/CHANGELOG.md b/sdk/resourcemanager/azure-resourcemanager-appservice/CHANGELOG.md
index 3dabe3e828511..6a6ca7c59a1c7 100644
--- a/sdk/resourcemanager/azure-resourcemanager-appservice/CHANGELOG.md
+++ b/sdk/resourcemanager/azure-resourcemanager-appservice/CHANGELOG.md
@@ -10,6 +10,12 @@
 
 ### Other Changes
 
+## 2.35.1 (2024-01-31)
+
+### Bugs Fixed
+
+- Mitigated backend error when creating Function App in Azure Container Apps environment.
+
 ## 2.35.0 (2024-01-26)
 
 ### Other Changes
diff --git a/sdk/resourcemanager/azure-resourcemanager-appservice/assets.json b/sdk/resourcemanager/azure-resourcemanager-appservice/assets.json
index 26a70e3f1c87c..4fc71fe5aae4c 100644
--- a/sdk/resourcemanager/azure-resourcemanager-appservice/assets.json
+++ b/sdk/resourcemanager/azure-resourcemanager-appservice/assets.json
@@ -2,5 +2,5 @@
   "AssetsRepo": "Azure/azure-sdk-assets",
   "AssetsRepoPrefixPath": "java",
   "TagPrefix": "java/resourcemanager/azure-resourcemanager-appservice",
-  "Tag": "java/resourcemanager/azure-resourcemanager-appservice_9c589b3b57"
+  "Tag": "java/resourcemanager/azure-resourcemanager-appservice_bff069b4d9"
 }
diff --git a/sdk/resourcemanager/azure-resourcemanager-appservice/src/main/java/com/azure/resourcemanager/appservice/implementation/FunctionAppImpl.java b/sdk/resourcemanager/azure-resourcemanager-appservice/src/main/java/com/azure/resourcemanager/appservice/implementation/FunctionAppImpl.java
index 80dfc3a9c28f8..b0377ed15b609 100644
--- a/sdk/resourcemanager/azure-resourcemanager-appservice/src/main/java/com/azure/resourcemanager/appservice/implementation/FunctionAppImpl.java
+++ b/sdk/resourcemanager/azure-resourcemanager-appservice/src/main/java/com/azure/resourcemanager/appservice/implementation/FunctionAppImpl.java
@@ -645,6 +645,8 @@ private void adaptForFunctionAppOnACA() {
             siteConfigInner.withLinuxFxVersion(this.siteConfig.linuxFxVersion());
             siteConfigInner.withMinimumElasticInstanceCount(this.siteConfig.minimumElasticInstanceCount());
             siteConfigInner.withFunctionAppScaleLimit(this.siteConfig.functionAppScaleLimit());
+            // TODO(xiaofei) remove after backend fix this bug
+            siteConfigInner.withAppSettings(new ArrayList<>());
             this.innerModel().withSiteConfig(siteConfigInner);
         }
     }