diff --git a/CHANGELOG.md b/CHANGELOG.md
index 49b83b75..8de6c854 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,7 @@ As such, _Breaking Changes_ are major. _Features_ would map to either major or m
   * Reduce packaged gem size
 * Fixes
   * [@iainbeeston Fix mismatched indentations warning message](https://github.com/mbleigh/acts-as-taggable-on/pull/1150)
+  * [@james-reading Fix issue when reordering tags and @@remove_unused_tags is true](https://github.com/mbleigh/acts-as-taggable-on/pull/1154)
 
 ### [v12.0.0) / 2024-11-09](https://github.com/mbleigh/acts-as-taggable-on/compare/v11.0.0...v12.0.0)
 
diff --git a/lib/acts-as-taggable-on/taggable/core.rb b/lib/acts-as-taggable-on/taggable/core.rb
index f3451616..8b897d9e 100644
--- a/lib/acts-as-taggable-on/taggable/core.rb
+++ b/lib/acts-as-taggable-on/taggable/core.rb
@@ -272,15 +272,17 @@ def save_tags
             # Delete discarded tags and create new tags
           end
 
-          # Destroy old taggings:
-          taggings.not_owned.by_context(context).where(tag_id: old_tags).destroy_all if old_tags.present?
-
-          # Create new taggings:
-          new_tags.each do |tag|
-            if taggable_tenant
-              taggings.create!(tag_id: tag.id, context: context.to_s, taggable: self, tenant: taggable_tenant)
-            else
-              taggings.create!(tag_id: tag.id, context: context.to_s, taggable: self)
+          transaction do
+            # Destroy old taggings:
+            taggings.not_owned.by_context(context).where(tag_id: old_tags).destroy_all if old_tags.present?
+
+            # Create new taggings:
+            new_tags.each do |tag|
+              if taggable_tenant
+                taggings.create!(tag_id: tag.id, context: context.to_s, taggable: self, tenant: taggable_tenant)
+              else
+                taggings.create!(tag_id: tag.id, context: context.to_s, taggable: self)
+              end
             end
           end
         end
diff --git a/lib/acts-as-taggable-on/tagging.rb b/lib/acts-as-taggable-on/tagging.rb
index e8e062dd..50188385 100644
--- a/lib/acts-as-taggable-on/tagging.rb
+++ b/lib/acts-as-taggable-on/tagging.rb
@@ -23,7 +23,7 @@ class Tagging < ActsAsTaggableOn.base_class.constantize # :nodoc:
 
     validates_uniqueness_of :tag_id, scope: %i[taggable_type taggable_id context tagger_id tagger_type]
 
-    after_destroy :remove_unused_tags
+    after_destroy_commit :remove_unused_tags
 
     private
 
diff --git a/spec/acts_as_taggable_on/taggable_spec.rb b/spec/acts_as_taggable_on/taggable_spec.rb
index a708df75..d054cf1f 100644
--- a/spec/acts_as_taggable_on/taggable_spec.rb
+++ b/spec/acts_as_taggable_on/taggable_spec.rb
@@ -92,6 +92,23 @@
     ids = @taggable.tags.map { |t| t.taggings.first.id }
     expect(ids).to eq(ids.sort)
   end
+
+  it 'can reorder tags successfully when @@remove_unused_tags is true' do
+    previous_setting = ActsAsTaggableOn.remove_unused_tags
+    ActsAsTaggableOn.remove_unused_tags = true
+
+    @taggable.tag_list = 'pow, ruby, rails'
+    @taggable.save!
+    @taggable.reload
+    expect(@taggable.tag_list).to eq(%w(pow ruby rails))
+
+    @taggable.tag_list = 'rails, pow, ruby'
+    @taggable.save!
+    @taggable.reload
+    expect(@taggable.tag_list).to eq(%w(rails pow ruby))
+  ensure
+    ActsAsTaggableOn.remove_unused_tags = previous_setting
+  end
 end
 
 RSpec.describe 'Taggable' do