diff --git a/.changelog/6793.txt b/.changelog/6793.txt
new file mode 100644
index 0000000000..800912ef4f
--- /dev/null
+++ b/.changelog/6793.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+apigee: Fixed permadiff on consumer_accept_list for `google_apigee_instance`
+```
diff --git a/google/resource_apigee_instance.go b/google/resource_apigee_instance.go
index eed5fc3ae0..2b52c31c8d 100644
--- a/google/resource_apigee_instance.go
+++ b/google/resource_apigee_instance.go
@@ -24,6 +24,31 @@ import (
 	"github.com/hashicorp/terraform-plugin-sdk/v2/helper/schema"
 )
 
+// Supress diffs when the lists of project have the same number of entries to handle the case that
+// API does not return what the user originally provided. Instead, API does some transformation.
+// For example, user provides a list of project number, but API returns a list of project Id.
+func projectListDiffSuppress(_, _, _ string, d *schema.ResourceData) bool {
+	return projectListDiffSuppressFunc(d)
+}
+
+func projectListDiffSuppressFunc(d TerraformResourceDataChange) bool {
+	kLength := "consumer_accept_list.#"
+	oldLength, newLength := d.GetChange(kLength)
+
+	oldInt, ok := oldLength.(int)
+	if !ok {
+		return false
+	}
+
+	newInt, ok := newLength.(int)
+	if !ok {
+		return false
+	}
+	log.Printf("[DEBUG] - suppressing diff with oldInt %d, newInt %d", oldInt, newInt)
+
+	return oldInt == newInt
+}
+
 func resourceApigeeInstance() *schema.Resource {
 	return &schema.Resource{
 		Create: resourceApigeeInstanceCreate,
@@ -60,10 +85,11 @@ func resourceApigeeInstance() *schema.Resource {
 in the format 'organizations/{{org_name}}'.`,
 			},
 			"consumer_accept_list": {
-				Type:     schema.TypeList,
-				Computed: true,
-				Optional: true,
-				ForceNew: true,
+				Type:             schema.TypeList,
+				Computed:         true,
+				Optional:         true,
+				ForceNew:         true,
+				DiffSuppressFunc: projectListDiffSuppress,
 				Description: `Optional. Customer accept list represents the list of projects (id/number) on customer
 side that can privately connect to the service attachment. It is an optional field
 which the customers can provide during the instance creation. By default, the customer
diff --git a/google/resource_apigee_instance_test.go b/google/resource_apigee_instance_test.go
new file mode 100644
index 0000000000..d13a9608fb
--- /dev/null
+++ b/google/resource_apigee_instance_test.go
@@ -0,0 +1,111 @@
+package google
+
+import (
+	"testing"
+)
+
+func TestUnitApigeeInstance_projectListDiffSuppress(t *testing.T) {
+	for _, tc := range apigeeInstanceDiffSuppressTestCases {
+		tc.Test(t)
+	}
+}
+
+type ApigeeInstanceDiffSuppressTestCase struct {
+	Name           string
+	KeysToSuppress []string
+	Before         map[string]interface{}
+	After          map[string]interface{}
+}
+
+var apigeeInstanceDiffSuppressTestCases = []ApigeeInstanceDiffSuppressTestCase{
+	{
+		Name:           "projects with the same length and one project entry is converted to project id",
+		KeysToSuppress: []string{"consumer_accept_list.0"},
+		Before: map[string]interface{}{
+			"consumer_accept_list.#": 2,
+			"consumer_accept_list.0": "45796856818",
+			"consumer_accept_list.1": "12345",
+		},
+		After: map[string]interface{}{
+			"consumer_accept_list.#": 2,
+			"consumer_accept_list.0": "tf-test8v1bd04pxa",
+			"consumer_accept_list.1": "12345",
+		},
+	},
+	{
+		Name:           "projects with the same length and no project conversion",
+		KeysToSuppress: []string{},
+		Before: map[string]interface{}{
+			"consumer_accept_list.#": 2,
+			"consumer_accept_list.0": "tf-test8v1bd04pxa",
+			"consumer_accept_list.1": "12345",
+		},
+		After: map[string]interface{}{
+			"consumer_accept_list.#": 2,
+			"consumer_accept_list.0": "tf-test8v1bd04pxa",
+			"consumer_accept_list.1": "12345",
+		},
+	},
+	{
+		Name:           "projects are empty",
+		KeysToSuppress: []string{},
+		Before:         map[string]interface{}{},
+		After:          map[string]interface{}{},
+	},
+	{
+		Name:           "projects have the different length",
+		KeysToSuppress: []string{},
+		Before:         map[string]interface{}{},
+		After: map[string]interface{}{
+			"consumer_accept_list.#": 2,
+			"consumer_accept_list.0": "tf-test8v1bd04pxa",
+			"consumer_accept_list.1": "12345",
+		},
+	},
+}
+
+func (tc *ApigeeInstanceDiffSuppressTestCase) Test(t *testing.T) {
+	mockResourceDiff := &ResourceDiffMock{
+		Before: tc.Before,
+		After:  tc.After,
+	}
+
+	keysHavingDiff := map[string]bool{}
+
+	for key, val1 := range tc.Before {
+		val2, ok := tc.After[key]
+		if !ok {
+			keysHavingDiff[key] = true
+		} else if val1 != val2 {
+			keysHavingDiff[key] = true
+		}
+	}
+
+	for key, val1 := range tc.After {
+		val2, ok := tc.Before[key]
+		if !ok {
+			keysHavingDiff[key] = true
+		} else if val1 != val2 {
+			keysHavingDiff[key] = true
+		}
+	}
+
+	keySuppressionMap := map[string]bool{}
+	for key := range tc.Before {
+		keySuppressionMap[key] = false
+	}
+	for key := range tc.After {
+		keySuppressionMap[key] = false
+	}
+
+	for _, key := range tc.KeysToSuppress {
+		keySuppressionMap[key] = true
+	}
+
+	for key := range keysHavingDiff {
+		actual := projectListDiffSuppressFunc(mockResourceDiff)
+		if actual != keySuppressionMap[key] {
+			t.Errorf("Test %s: expected key `%s` to be suppressed", tc.Name, key)
+		}
+	}
+}