diff --git a/packages/transaction-controller/CHANGELOG.md b/packages/transaction-controller/CHANGELOG.md
index c849a4287ea..7c6473e911e 100644
--- a/packages/transaction-controller/CHANGELOG.md
+++ b/packages/transaction-controller/CHANGELOG.md
@@ -7,6 +7,22 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+### Added
+
+- Add new `updateTransaction` overload that accepts an object with `transactionId` and `callback` properties ([#7784](https://github.com/MetaMask/core/pull/7784))
+- Add new `UpdateTransactionRequest` type for the new `updateTransaction` overload parameters ([#7784](https://github.com/MetaMask/core/pull/7784))
+- Add new `TransactionController:updateTransactionObj` messenger action for the new `updateTransaction` overload ([#7784](https://github.com/MetaMask/core/pull/7784))
+- Add new `TransactionControllerUpdateTransactionObjAction` type for the new messenger action ([#7784](https://github.com/MetaMask/core/pull/7784))
+
+### Changed
+
+- **DEPRECATED**: The `updateTransaction(transactionMeta, note)` signature is now deprecated ([#7784](https://github.com/MetaMask/core/pull/7784))
+  - Use `updateTransaction({ transactionId, callback })` instead.
+  - This signature will be removed in a future version.
+- **DEPRECATED**: The `TransactionControllerUpdateTransactionAction` type is now deprecated ([#7784](https://github.com/MetaMask/core/pull/7784))
+  - Use `TransactionControllerUpdateTransactionObjAction` instead.
+  - This type will be removed in a future version.
+
 ## [62.12.0]
 
 ### Added
diff --git a/packages/transaction-controller/src/TransactionController.test.ts b/packages/transaction-controller/src/TransactionController.test.ts
index 4b7f34ff0c5..1b4e954d48f 100644
--- a/packages/transaction-controller/src/TransactionController.test.ts
+++ b/packages/transaction-controller/src/TransactionController.test.ts
@@ -8368,6 +8368,68 @@ describe('TransactionController', () => {
       });
     });
 
+    describe('TransactionController:updateTransactionObj', () => {
+      it('calls updateTransaction with callback via messenger', () => {
+        const transaction = {
+          ...TRANSACTION_META_MOCK,
+          txParams: {
+            from: ACCOUNT_MOCK,
+            to: ACCOUNT_2_MOCK,
+          },
+        };
+        const { controller, messenger } = setupController({
+          options: {
+            state: {
+              transactions: [transaction],
+            },
+          },
+        });
+
+        const result = messenger.call(
+          'TransactionController:updateTransactionObj',
+          {
+            transactionId: transaction.id,
+            callback: (txMeta: TransactionMeta) => {
+              txMeta.txParams.value = '0x3';
+            },
+          },
+        );
+
+        expect(controller.state.transactions[0].txParams.value).toBe('0x3');
+        expect(result).toBeDefined();
+        expect(result.id).toBe(transaction.id);
+      });
+
+      it('returns updated transaction metadata', () => {
+        const transaction = {
+          ...TRANSACTION_META_MOCK,
+          txParams: {
+            from: ACCOUNT_MOCK,
+            to: ACCOUNT_2_MOCK,
+          },
+        };
+        const { messenger } = setupController({
+          options: {
+            state: {
+              transactions: [transaction],
+            },
+          },
+        });
+
+        const result = messenger.call(
+          'TransactionController:updateTransactionObj',
+          {
+            transactionId: transaction.id,
+            callback: (txMeta: TransactionMeta) => {
+              txMeta.txParams.value = '0x4';
+            },
+          },
+        );
+
+        expect(result.txParams.value).toBe('0x4');
+      });
+    });
+
     describe('TransactionController:getGasFeeTokens', () => {
       it('returns gas fee tokens', async () => {
         const { messenger } = setupController();
diff --git a/packages/transaction-controller/src/TransactionController.ts b/packages/transaction-controller/src/TransactionController.ts
index 09b42639521..624de35b79b 100644
--- a/packages/transaction-controller/src/TransactionController.ts
+++ b/packages/transaction-controller/src/TransactionController.ts
@@ -359,10 +359,29 @@ export type TransactionControllerGetTransactionsAction = {
  *
  * @param transactionMeta - The new transaction to store in state.
  * @param note - A note or update reason to be logged.
+ * @deprecated Use TransactionControllerUpdateTransactionObjAction instead.
  */
 export type TransactionControllerUpdateTransactionAction = {
   type: `${typeof controllerName}:updateTransaction`;
-  handler: TransactionController['updateTransaction'];
+  handler: (transactionMeta: TransactionMeta, note: string) => void;
+};
+
+/**
+ * Request object for updating a transaction using a callback.
+ */
+export type UpdateTransactionRequest = {
+  /** The ID of the transaction to update. */
+  transactionId: string;
+  /** A callback that receives the current transaction and returns the updated transaction or void. */
+  callback: (transactionMeta: TransactionMeta) => TransactionMeta | void;
+};
+
+/**
+ * Updates an existing transaction in state using a callback function.
+ */
+export type TransactionControllerUpdateTransactionObjAction = {
+  type: `${typeof controllerName}:updateTransactionObj`;
+  handler: (request: UpdateTransactionRequest) => Readonly<TransactionMeta>;
 };
 
 /** Add a single transaction to be submitted after approval. */
@@ -420,6 +439,7 @@ export type TransactionControllerActions =
   | TransactionControllerGetTransactionsAction
   | TransactionControllerUpdateCustodialTransactionAction
   | TransactionControllerUpdateTransactionAction
+  | TransactionControllerUpdateTransactionObjAction
   | TransactionControllerEmulateNewTransaction
   | TransactionControllerEmulateTransactionUpdate;
 
@@ -1861,8 +1881,34 @@ export class TransactionController extends BaseController<
    *
    * @param transactionMeta - The new transaction to store in state.
    * @param note - A note or update reason to be logged.
+   * @deprecated Use the object form `updateTransaction({ transactionId, callback })` instead.
+   */
+  updateTransaction(transactionMeta: TransactionMeta, note: string): void;
+
+  /**
+   * Updates an existing transaction in state using a callback function.
+   *
+   * @param request - The update request containing transactionId and callback.
+   * @param request.transactionId - The ID of the transaction to update.
+   * @param request.callback - A callback that receives the current transaction and returns the updated transaction or void.
+   * @returns The updated transaction metadata.
    */
-  updateTransaction(transactionMeta: TransactionMeta, note: string): void {
+  updateTransaction(
+    request: UpdateTransactionRequest,
+  ): Readonly<TransactionMeta>;
+
+  updateTransaction(
+    transactionMetaOrRequest: TransactionMeta | UpdateTransactionRequest,
+    note?: string,
+  ): void | Readonly<TransactionMeta> {
+    // New form: object with transactionId and callback
+    if ('callback' in transactionMetaOrRequest) {
+      const { transactionId, callback } = transactionMetaOrRequest;
+      return this.#updateTransactionInternal({ transactionId }, callback);
+    }
+
+    // Old form (deprecated): transactionMeta and note
+    const transactionMeta = transactionMetaOrRequest;
     const { id: transactionId } = transactionMeta;
 
     this.#updateTransactionInternal({ transactionId }, () => ({
@@ -1870,6 +1916,8 @@ export class TransactionController extends BaseController<
     }));
 
     log('Transaction updated', { transactionId, note });
+
+    return undefined;
   }
 
   /**
@@ -4649,6 +4697,11 @@ export class TransactionController extends BaseController<
       `${controllerName}:updateTransaction`,
       this.updateTransaction.bind(this),
     );
+
+    this.messenger.registerActionHandler(
+      `${controllerName}:updateTransactionObj`,
+      (request: UpdateTransactionRequest) => this.updateTransaction(request),
+    );
   }
 
   #deleteTransaction(transactionId: string): void {
diff --git a/packages/transaction-controller/src/index.ts b/packages/transaction-controller/src/index.ts
index eb635910979..1f853120f0b 100644
--- a/packages/transaction-controller/src/index.ts
+++ b/packages/transaction-controller/src/index.ts
@@ -33,6 +33,8 @@ export type {
   TransactionControllerUnapprovedTransactionAddedEvent,
   TransactionControllerUpdateCustodialTransactionAction,
   TransactionControllerUpdateTransactionAction,
+  TransactionControllerUpdateTransactionObjAction,
+  UpdateTransactionRequest,
   TransactionControllerMessenger,
   TransactionControllerOptions,
 } from './TransactionController';