diff --git a/Source/Engine/AI/Behavior.cpp b/Source/Engine/AI/Behavior.cpp
index 71821a57e..f08b733ad 100644
--- a/Source/Engine/AI/Behavior.cpp
+++ b/Source/Engine/AI/Behavior.cpp
@@ -15,30 +15,27 @@ void BehaviorKnowledge::InitMemory(BehaviorTree* tree)
     ASSERT_LOW_LAYER(!Tree && tree);
     Tree = tree;
     Blackboard = Variant::NewValue(tree->Graph.Root->BlackboardType);
+    RelevantNodes.Resize(tree->Graph.NodesCount, false);
+    RelevantNodes.SetAll(false);
     if (!Memory && tree->Graph.NodesStatesSize)
-    {
         Memory = Allocator::Allocate(tree->Graph.NodesStatesSize);
-        for (const auto& node : tree->Graph.Nodes)
-        {
-            if (node.Instance)
-                node.Instance->InitState(Behavior, Memory);
-        }
-    }
 }
 
 void BehaviorKnowledge::FreeMemory()
 {
     if (Memory)
     {
+        // Release any outstanding nodes state and memory
         ASSERT_LOW_LAYER(Tree);
         for (const auto& node : Tree->Graph.Nodes)
         {
-            if (node.Instance)
+            if (node.Instance && node.Instance->_executionIndex != -1 && RelevantNodes[node.Instance->_executionIndex])
                 node.Instance->ReleaseState(Behavior, Memory);
         }
         Allocator::Free(Memory);
         Memory = nullptr;
     }
+    RelevantNodes.Clear();
     Blackboard.DeleteValue();
     Tree = nullptr;
 }
@@ -118,7 +115,7 @@ void Behavior::OnLateUpdate()
     context.Knowledge = &_knowledge;
     context.Memory = _knowledge.Memory;
     context.DeltaTime = updateDeltaTime;
-    const BehaviorUpdateResult result = tree->Graph.Root->Update(context);
+    const BehaviorUpdateResult result = tree->Graph.Root->InvokeUpdate(context);
     if (result != BehaviorUpdateResult::Running)
     {
         _result = result;
diff --git a/Source/Engine/AI/BehaviorKnowledge.h b/Source/Engine/AI/BehaviorKnowledge.h
index 48f77ffa9..a39e70eea 100644
--- a/Source/Engine/AI/BehaviorKnowledge.h
+++ b/Source/Engine/AI/BehaviorKnowledge.h
@@ -2,6 +2,8 @@
 
 #pragma once
 
+#include "Engine/Core/Types/Variant.h"
+#include "Engine/Core/Collections/BitArray.h"
 #include "Engine/Scripting/ScriptingObject.h"
 
 class Behavior;
@@ -28,17 +30,18 @@ API_CLASS() class FLAXENGINE_API BehaviorKnowledge : public ScriptingObject
     /// <summary>
     /// Raw memory chunk with all Behavior Tree nodes state.
     /// </summary>
-    API_FIELD(ReadOnly) void* Memory = nullptr;
+    void* Memory = nullptr;
+
+    /// <summary>
+    /// Array with per-node bit indicating whether node is relevant (active in graph with state created).
+    /// </summary>
+    BitArray<> RelevantNodes;
 
     /// <summary>
     /// Instance of the behaviour blackboard (structure or class).
     /// </summary>
     API_FIELD() Variant Blackboard;
 
-    // TODO: sensors data
-    // TODO: goals
-    // TODO: GetGoal/HasGoal
-
     /// <summary>
     /// Initializes the knowledge for a certain tree.
     /// </summary>
diff --git a/Source/Engine/AI/BehaviorTree.cpp b/Source/Engine/AI/BehaviorTree.cpp
index e2330097e..653e44335 100644
--- a/Source/Engine/AI/BehaviorTree.cpp
+++ b/Source/Engine/AI/BehaviorTree.cpp
@@ -15,6 +15,7 @@ REGISTER_BINARY_ASSET(BehaviorTree, "FlaxEngine.BehaviorTree", false);
 
 bool SortBehaviorTreeChildren(GraphBox* const& a, GraphBox* const& b)
 {
+    // Sort by node X coordinate on surface
     auto aNode = (BehaviorTreeGraph::Node*)a->Parent;
     auto bNode = (BehaviorTreeGraph::Node*)b->Parent;
     auto aEntry = aNode->Meta.GetEntry(11);
@@ -35,32 +36,19 @@ bool BehaviorTreeGraph::Load(ReadStream* stream, bool loadMeta)
         return true;
 
     // Build node instances hierarchy
+    Node* root = nullptr;
     for (Node& node : Nodes)
     {
-        if (auto* nodeCompound = ScriptingObject::Cast<BehaviorTreeCompoundNode>(node.Instance))
+        if (node.Instance == Root)
         {
-            auto& children = node.Boxes[1].Connections;
-
-            // Sort children from left to right (based on placement on a graph surface)
-            Sorting::QuickSort(children.Get(), children.Count(), SortBehaviorTreeChildren);
-
-            // Find all children (of output box)
-            for (const GraphBox* childBox : children)
-            {
-                const Node* child = childBox ? (Node*)childBox->Parent : nullptr;
-                if (child && child->Instance)
-                {
-                    nodeCompound->Children.Add(child->Instance);
-                }
-            }
-        }
-        if (node.Instance)
-        {
-            // Count total states memory size
-            node.Instance->_memoryOffset = NodesStatesSize;
-            NodesStatesSize += node.Instance->GetStateSize();
+            root = &node;
+            break;
         }
     }
+    if (root)
+    {
+        LoadRecursive(*root);
+    }
 
     return false;
 }
@@ -70,6 +58,7 @@ void BehaviorTreeGraph::Clear()
     VisjectGraph<BehaviorTreeGraphNode>::Clear();
 
     Root = nullptr;
+    NodesCount = 0;
     NodesStatesSize = 0;
 }
 
@@ -103,6 +92,35 @@ bool BehaviorTreeGraph::onNodeLoaded(Node* n)
     return VisjectGraph<BehaviorTreeGraphNode>::onNodeLoaded(n);
 }
 
+void BehaviorTreeGraph::LoadRecursive(Node& node)
+{
+    // Count total states memory size
+    ASSERT_LOW_LAYER(node.Instance);
+    node.Instance->_memoryOffset = NodesStatesSize;
+    node.Instance->_executionIndex = NodesCount;
+    NodesStatesSize += node.Instance->GetStateSize();
+    NodesCount++;
+
+    if (auto* nodeCompound = ScriptingObject::Cast<BehaviorTreeCompoundNode>(node.Instance))
+    {
+        auto& children = node.Boxes[1].Connections;
+
+        // Sort children from left to right (based on placement on a graph surface)
+        Sorting::QuickSort(children.Get(), children.Count(), SortBehaviorTreeChildren);
+
+        // Find all children (of output box)
+        for (const GraphBox* childBox : children)
+        {
+            Node* child = childBox ? (Node*)childBox->Parent : nullptr;
+            if (child && child->Instance)
+            {
+                nodeCompound->Children.Add(child->Instance);
+                LoadRecursive(*child);
+            }
+        }
+    }
+}
+
 BehaviorTree::BehaviorTree(const SpawnParams& params, const AssetInfo* info)
     : BinaryAsset(params, info)
 {
diff --git a/Source/Engine/AI/BehaviorTree.h b/Source/Engine/AI/BehaviorTree.h
index cedd437b2..f81228162 100644
--- a/Source/Engine/AI/BehaviorTree.h
+++ b/Source/Engine/AI/BehaviorTree.h
@@ -29,6 +29,8 @@ class BehaviorTreeGraph : public VisjectGraph<BehaviorTreeGraphNode>
 public:
     // Instance of the graph root node.
     BehaviorTreeRootNode* Root = nullptr;
+    // Total count of used nodes.
+    int32 NodesCount = 0;
     // Total size of the nodes states memory.
     int32 NodesStatesSize = 0;
 
@@ -36,6 +38,9 @@ public:
     bool Load(ReadStream* stream, bool loadMeta) override;
     void Clear() override;
     bool onNodeLoaded(Node* n) override;
+
+private:
+    void LoadRecursive(Node& node);
 };
 
 /// <summary>
diff --git a/Source/Engine/AI/BehaviorTreeNode.h b/Source/Engine/AI/BehaviorTreeNode.h
index ac62d7b5f..69e3bcb46 100644
--- a/Source/Engine/AI/BehaviorTreeNode.h
+++ b/Source/Engine/AI/BehaviorTreeNode.h
@@ -12,10 +12,13 @@ API_CLASS(Abstract) class FLAXENGINE_API BehaviorTreeNode : public SerializableS
 {
     DECLARE_SCRIPTING_TYPE_WITH_CONSTRUCTOR_IMPL(BehaviorTreeNode, SerializableScriptingObject);
     friend class BehaviorTreeGraph;
+    friend class BehaviorKnowledge;
 
 protected:
     // Raw memory byte offset from the start of the behavior memory block.
     API_FIELD(ReadOnly) int32 _memoryOffset = 0;
+    // Execution index of the node within tree.
+    API_FIELD(ReadOnly) int32 _executionIndex = -1;
 
 public:
     /// <summary>
@@ -67,6 +70,9 @@ public:
         return BehaviorUpdateResult::Success;
     }
 
+    // Helper utility to update node with state creation/cleanup depending on node relevancy.
+    BehaviorUpdateResult InvokeUpdate(const BehaviorUpdateContext& context);
+
     // [SerializableScriptingObject]
     void Serialize(SerializeStream& stream, const void* otherObj) override;
     void Deserialize(DeserializeStream& stream, ISerializeModifier* modifier) override;
diff --git a/Source/Engine/AI/BehaviorTreeNodes.cpp b/Source/Engine/AI/BehaviorTreeNodes.cpp
index 01a0c7978..783ac9157 100644
--- a/Source/Engine/AI/BehaviorTreeNodes.cpp
+++ b/Source/Engine/AI/BehaviorTreeNodes.cpp
@@ -1,8 +1,32 @@
 // Copyright (c) 2012-2023 Wojciech Figat. All rights reserved.
 
 #include "BehaviorTreeNodes.h"
+#include "BehaviorKnowledge.h"
 #include "Engine/Serialization/Serialization.h"
 
+BehaviorUpdateResult BehaviorTreeNode::InvokeUpdate(const BehaviorUpdateContext& context)
+{
+    ASSERT_LOW_LAYER(_executionIndex != -1);
+    if (context.Knowledge->RelevantNodes.Get(_executionIndex) == false)
+    {
+        // Node becomes relevant so initialize it's state
+        context.Knowledge->RelevantNodes.Set(_executionIndex, true);
+        InitState(context.Behavior, context.Memory);
+    }
+
+    // Node-specific update
+    const BehaviorUpdateResult result = Update(context);
+
+    // Check if node is not relevant anymore
+    if (result != BehaviorUpdateResult::Running)
+    {
+        context.Knowledge->RelevantNodes.Set(_executionIndex, false);
+        ReleaseState(context.Behavior, context.Memory);
+    }
+
+    return result;
+}
+
 void BehaviorTreeNode::Serialize(SerializeStream& stream, const void* otherObj)
 {
     SerializableScriptingObject::Serialize(stream, otherObj);
@@ -31,7 +55,7 @@ BehaviorUpdateResult BehaviorTreeCompoundNode::Update(BehaviorUpdateContext cont
     for (int32 i = 0; i < Children.Count() && result == BehaviorUpdateResult::Success; i++)
     {
         BehaviorTreeNode* child = Children[i];
-        result = child->Update(context);
+        result = child->InvokeUpdate(context);
     }
     return result;
 }
@@ -56,7 +80,7 @@ BehaviorUpdateResult BehaviorTreeSequenceNode::Update(BehaviorUpdateContext cont
     if (state->CurrentChildIndex == -1)
         return BehaviorUpdateResult::Failed;
 
-    auto result = Children[state->CurrentChildIndex]->Update(context);
+    auto result = Children[state->CurrentChildIndex]->InvokeUpdate(context);
 
     switch (result)
     {