diff --git a/src/core/meshcop/dataset.cpp b/src/core/meshcop/dataset.cpp
index f672ae30f..cd5f4eb27 100644
--- a/src/core/meshcop/dataset.cpp
+++ b/src/core/meshcop/dataset.cpp
@@ -518,7 +518,7 @@ void Dataset::Remove(uint8_t *aStart, uint8_t aLength)
     mLength -= aLength;
 }
 
-otError Dataset::ApplyConfiguration(Instance &aInstance) const
+otError Dataset::ApplyConfiguration(Instance &aInstance, bool *aIsMasterKeyUpdated) const
 {
     ThreadNetif &netif = aInstance.GetThreadNetif();
     Mac::Mac &   mac   = netif.GetMac();
@@ -528,6 +528,11 @@ otError Dataset::ApplyConfiguration(Instance &aInstance) const
 
     VerifyOrExit(IsValid(), error = OT_ERROR_PARSE);
 
+    if (aIsMasterKeyUpdated)
+    {
+        *aIsMasterKeyUpdated = false;
+    }
+
     while (cur < end)
     {
         switch (cur->GetType())
@@ -578,6 +583,13 @@ otError Dataset::ApplyConfiguration(Instance &aInstance) const
         case Tlv::kNetworkMasterKey:
         {
             const NetworkMasterKeyTlv *key = static_cast<const NetworkMasterKeyTlv *>(cur);
+
+            if (aIsMasterKeyUpdated &&
+                memcmp(&key->GetNetworkMasterKey(), &netif.GetKeyManager().GetMasterKey(), OT_MASTER_KEY_SIZE))
+            {
+                *aIsMasterKeyUpdated = true;
+            }
+
             netif.GetKeyManager().SetMasterKey(key->GetNetworkMasterKey());
             break;
         }
diff --git a/src/core/meshcop/dataset.hpp b/src/core/meshcop/dataset.hpp
index 1644cf2a1..34d6be0bc 100644
--- a/src/core/meshcop/dataset.hpp
+++ b/src/core/meshcop/dataset.hpp
@@ -224,13 +224,14 @@ public:
     /**
      * This method applies the Active or Pending Dataset to the Thread interface.
      *
-     * @param[in]  aInstance  A reference to the OpenThread instance.
+     * @param[in]  aInstance           A reference to the OpenThread instance.
+     * @param[out] aIsMasterKeyUpdated A pointer to where to place whether master key was updated.
      *
      * @retval OT_ERROR_NONE   Successfully applied configuration.
      * @retval OT_ERROR_PARSE  The dataset has at least one TLV with invalid format.
      *
      */
-    otError ApplyConfiguration(Instance &aInstance) const;
+    otError ApplyConfiguration(Instance &aInstance, bool *aIsMasterKeyUpdated = NULL) const;
 
     /**
      * This method converts a Pending Dataset to an Active Dataset.
diff --git a/src/core/meshcop/dataset_manager.cpp b/src/core/meshcop/dataset_manager.cpp
index 7a058b712..80c971ad8 100644
--- a/src/core/meshcop/dataset_manager.cpp
+++ b/src/core/meshcop/dataset_manager.cpp
@@ -149,6 +149,7 @@ otError DatasetManager::Set(const Dataset &aDataset)
     otError          error = OT_ERROR_NONE;
     const Timestamp *timestamp;
     int              compare;
+    bool             isMasterkeyUpdated = false;
 
     timestamp = aDataset.GetTimestamp();
 
@@ -159,13 +160,13 @@ otError DatasetManager::Set(const Dataset &aDataset)
 
         if (mLocal.GetType() == Tlv::kActiveTimestamp)
         {
-            SuccessOrExit(error = aDataset.ApplyConfiguration(GetInstance()));
+            SuccessOrExit(error = aDataset.ApplyConfiguration(GetInstance(), &isMasterkeyUpdated));
         }
     }
 
     compare = mLocal.Compare(timestamp);
 
-    if (compare > 0)
+    if (isMasterkeyUpdated || compare > 0)
     {
         ThreadNetif &netif = GetNetif();