diff --git a/src/diffusers/models/upsampling.py b/src/diffusers/models/upsampling.py
index fd5ed28c7070..cf07e45b0c5c 100644
--- a/src/diffusers/models/upsampling.py
+++ b/src/diffusers/models/upsampling.py
@@ -19,6 +19,7 @@
 import torch.nn.functional as F
 
 from ..utils import deprecate
+from ..utils.import_utils import is_torch_version
 from .normalization import RMSNorm
 
 
@@ -151,11 +152,10 @@ def forward(self, hidden_states: torch.Tensor, output_size: Optional[int] = None
         if self.use_conv_transpose:
             return self.conv(hidden_states)
 
-        # Cast to float32 to as 'upsample_nearest2d_out_frame' op does not support bfloat16
-        # TODO(Suraj): Remove this cast once the issue is fixed in PyTorch
-        # https://github.com/pytorch/pytorch/issues/86679
+        # Cast to float32 to as 'upsample_nearest2d_out_frame' op does not support bfloat16 until PyTorch 2.1
+        # https://github.com/pytorch/pytorch/issues/86679#issuecomment-1783978767
         dtype = hidden_states.dtype
-        if dtype == torch.bfloat16:
+        if dtype == torch.bfloat16 and is_torch_version("<", "2.1"):
             hidden_states = hidden_states.to(torch.float32)
 
         # upsample_nearest_nhwc fails with large batch sizes. see https://github.com/huggingface/diffusers/issues/984
@@ -170,8 +170,8 @@ def forward(self, hidden_states: torch.Tensor, output_size: Optional[int] = None
             else:
                 hidden_states = F.interpolate(hidden_states, size=output_size, mode="nearest")
 
-        # If the input is bfloat16, we cast back to bfloat16
-        if dtype == torch.bfloat16:
+        # Cast back to original dtype
+        if dtype == torch.bfloat16 and is_torch_version("<", "2.1"):
             hidden_states = hidden_states.to(dtype)
 
         # TODO(Suraj, Patrick) - clean up after weight dicts are correctly renamed
diff --git a/src/diffusers/utils/testing_utils.py b/src/diffusers/utils/testing_utils.py
index be3e9983c80f..7dc3f414d55c 100644
--- a/src/diffusers/utils/testing_utils.py
+++ b/src/diffusers/utils/testing_utils.py
@@ -252,6 +252,18 @@ def require_torch_2(test_case):
     )
 
 
+def require_torch_version_greater_equal(torch_version):
+    """Decorator marking a test that requires torch with a specific version or greater."""
+
+    def decorator(test_case):
+        correct_torch_version = is_torch_available() and is_torch_version(">=", torch_version)
+        return unittest.skipUnless(
+            correct_torch_version, f"test requires torch with the version greater than or equal to {torch_version}"
+        )(test_case)
+
+    return decorator
+
+
 def require_torch_gpu(test_case):
     """Decorator marking a test that requires CUDA and PyTorch."""
     return unittest.skipUnless(is_torch_available() and torch_device == "cuda", "test requires PyTorch+CUDA")(
diff --git a/tests/models/test_layers_utils.py b/tests/models/test_layers_utils.py
index 66e142f8c66a..415bb12b73c6 100644
--- a/tests/models/test_layers_utils.py
+++ b/tests/models/test_layers_utils.py
@@ -27,6 +27,7 @@
 from diffusers.utils.testing_utils import (
     backend_manual_seed,
     require_torch_accelerator_with_fp64,
+    require_torch_version_greater_equal,
     torch_device,
 )
 
@@ -120,6 +121,21 @@ def test_upsample_default(self):
         expected_slice = torch.tensor([-0.2173, -1.2079, -1.2079, 0.2952, 1.1254, 1.1254, 0.2952, 1.1254, 1.1254])
         assert torch.allclose(output_slice.flatten(), expected_slice, atol=1e-3)
 
+    @require_torch_version_greater_equal("2.1")
+    def test_upsample_bfloat16(self):
+        torch.manual_seed(0)
+        sample = torch.randn(1, 32, 32, 32).to(torch.bfloat16)
+        upsample = Upsample2D(channels=32, use_conv=False)
+        with torch.no_grad():
+            upsampled = upsample(sample)
+
+        assert upsampled.shape == (1, 32, 64, 64)
+        output_slice = upsampled[0, -1, -3:, -3:]
+        expected_slice = torch.tensor(
+            [-0.2173, -1.2079, -1.2079, 0.2952, 1.1254, 1.1254, 0.2952, 1.1254, 1.1254], dtype=torch.bfloat16
+        )
+        assert torch.allclose(output_slice.flatten(), expected_slice, atol=1e-3)
+
     def test_upsample_with_conv(self):
         torch.manual_seed(0)
         sample = torch.randn(1, 32, 32, 32)