diff --git a/src/cli/cli.cpp b/src/cli/cli.cpp
index 3844d695e..b159577d1 100644
--- a/src/cli/cli.cpp
+++ b/src/cli/cli.cpp
@@ -262,7 +262,7 @@ void Interpreter::ProcessLine(char *aBuf)
     LogInput(args);
 
 #if OPENTHREAD_CONFIG_DIAG_ENABLE
-    if (otDiagIsEnabled(GetInstancePtr()) && (args[0] != "diag"))
+    if (otDiagIsEnabled(GetInstancePtr()) && (args[0] != "diag") && (args[0] != "factoryreset"))
     {
         OutputLine("under diagnostics mode, execute 'diag stop' before running any other commands.");
         ExitNow(error = OT_ERROR_INVALID_STATE);