diff --git a/index.js b/index.js
index f6e4fe2..8e49f87 100644
--- a/index.js
+++ b/index.js
@@ -622,14 +622,29 @@ export function useLocalStorage(key, initialValue) {
     getLocalStorageServerSnapshot
   );
 
+  // Tracks whether the item was explicitly removed via setState(null/undefined).
+  // This lets us distinguish "never initialized" from "intentionally cleared",
+  // which the storage API itself has no concept of.
+  const wasRemovedRef = React.useRef(false);
+
+  // Reset the removal flag when the key changes — switching keys means
+  // we're managing a different value entirely, so start fresh.
+  const prevKeyRef = React.useRef(key);
+  if (prevKeyRef.current !== key) {
+    prevKeyRef.current = key;
+    wasRemovedRef.current = false;
+  }
+
   const setState = React.useCallback(
     (v) => {
       try {
         const nextState = typeof v === "function" ? v(JSON.parse(store)) : v;
 
         if (nextState === undefined || nextState === null) {
+          wasRemovedRef.current = true;
           removeLocalStorageItem(key);
         } else {
+          wasRemovedRef.current = false;
           setLocalStorageItem(key, nextState);
         }
       } catch (e) {
@@ -640,15 +655,27 @@ export function useLocalStorage(key, initialValue) {
   );
 
   React.useEffect(() => {
+    // Only seed the initial value if the key is absent AND the user hasn't
+    // explicitly cleared it. Without this guard, calling setState(null) would
+    // remove the item, but this effect would immediately write initialValue back.
     if (
       getLocalStorageItem(key) === null &&
-      typeof initialValue !== "undefined"
+      typeof initialValue !== "undefined" &&
+      !wasRemovedRef.current
     ) {
       setLocalStorageItem(key, initialValue);
     }
   }, [key, initialValue]);
 
-  return [store ? JSON.parse(store) : initialValue, setState];
+  // If the item is absent because it was explicitly removed, return null.
+  // If it was never set, fall back to initialValue as before.
+  const resolvedValue = store
+    ? JSON.parse(store)
+    : wasRemovedRef.current
+    ? null
+    : initialValue;
+
+  return [resolvedValue, setState];
 }
 
 export function useLockBodyScroll() {