diff --git a/source/common/conn_pool/conn_pool_base.h b/source/common/conn_pool/conn_pool_base.h
index 29a714410f8cb..802cff1d639c2 100644
--- a/source/common/conn_pool/conn_pool_base.h
+++ b/source/common/conn_pool/conn_pool_base.h
@@ -49,7 +49,7 @@ class ActiveClient : public LinkedObject<ActiveClient>,
 
   // Returns the concurrent stream limit, accounting for if the total stream limit
   // is less than the concurrent stream limit.
-  uint32_t effectiveConcurrentStreamLimit() const {
+  virtual uint32_t effectiveConcurrentStreamLimit() const {
     return std::min(remaining_streams_, concurrent_stream_limit_);
   }
 
@@ -267,6 +267,11 @@ class ConnPoolImplBase : protected Logger::Loggable<Logger::Id::pool> {
     connecting_stream_capacity_ -= delta;
   }
 
+  void incrConnectingAndConnectedStreamCapacity(uint32_t delta) {
+    state_.incrConnectingAndConnectedStreamCapacity(delta);
+    connecting_stream_capacity_ += delta;
+  }
+
   // Called when an upstream is ready to serve pending streams.
   void onUpstreamReady();
 
@@ -309,11 +314,6 @@ class ConnPoolImplBase : protected Logger::Loggable<Logger::Id::pool> {
 
   bool hasActiveStreams() const { return num_active_streams_ > 0; }
 
-  void incrConnectingAndConnectedStreamCapacity(uint32_t delta) {
-    state_.incrConnectingAndConnectedStreamCapacity(delta);
-    connecting_stream_capacity_ += delta;
-  }
-
   Upstream::ClusterConnectivityState& state_;
 
   const Upstream::HostConstSharedPtr host_;
diff --git a/source/common/http/http3/conn_pool.h b/source/common/http/http3/conn_pool.h
index 2db0426630d67..d89c5fa69ab06 100644
--- a/source/common/http/http3/conn_pool.h
+++ b/source/common/http/http3/conn_pool.h
@@ -35,6 +35,11 @@ class ActiveClient : public MultiplexedActiveClientBase {
     return MultiplexedActiveClientBase::newStreamEncoder(response_decoder);
   }
 
+  uint32_t effectiveConcurrentStreamLimit() const override {
+    return std::min<int64_t>(MultiplexedActiveClientBase::effectiveConcurrentStreamLimit(),
+                             quiche_capacity_);
+  }
+
   // Overload the default capacity calculations to return the quic capacity
   // (modified by any stream limits in Envoy config)
   int64_t currentUnusedCapacity() const override {
@@ -54,10 +59,18 @@ class ActiveClient : public MultiplexedActiveClientBase {
     quiche_capacity_ = new_quiche_capacity;
     uint64_t new_capacity = currentUnusedCapacity();
 
-    if (new_capacity < old_capacity) {
-      parent_.decrClusterStreamCapacity(old_capacity - new_capacity);
-    } else if (old_capacity < new_capacity) {
-      parent_.incrClusterStreamCapacity(new_capacity - old_capacity);
+    if (connect_timer_) {
+      if (new_capacity < old_capacity) {
+        parent_.decrConnectingAndConnectedStreamCapacity(old_capacity - new_capacity);
+      } else if (old_capacity < new_capacity) {
+        parent_.incrConnectingAndConnectedStreamCapacity(new_capacity - old_capacity);
+      }
+    } else {
+      if (new_capacity < old_capacity) {
+        parent_.decrClusterStreamCapacity(old_capacity - new_capacity);
+      } else if (old_capacity < new_capacity) {
+        parent_.incrClusterStreamCapacity(new_capacity - old_capacity);
+      }
     }
   }
 
diff --git a/test/integration/multiplexed_upstream_integration_test.cc b/test/integration/multiplexed_upstream_integration_test.cc
index 1a30fda97d9db..ae1e3c8166fb0 100644
--- a/test/integration/multiplexed_upstream_integration_test.cc
+++ b/test/integration/multiplexed_upstream_integration_test.cc
@@ -288,6 +288,32 @@ TEST_P(MultiplexedUpstreamIntegrationTest, ManySimultaneousRequestsTightUpstream
   manySimultaneousRequests(1024, 1024, 10);
 }
 
+TEST_P(MultiplexedUpstreamIntegrationTest, ManySimultaneousRequestsLaxUpstreamLimits) {
+  envoy::config::core::v3::Http2ProtocolOptions config;
+  config.mutable_max_concurrent_streams()->set_value(10000);
+  mergeOptions(config);
+  envoy::config::listener::v3::QuicProtocolOptions options;
+  options.mutable_quic_protocol_options()->mutable_max_concurrent_streams()->set_value(10000);
+  mergeOptions(options);
+
+  if (upstreamProtocol() == Http::CodecType::HTTP3) {
+    config_helper_.addConfigModifier(
+        [&](envoy::config::bootstrap::v3::Bootstrap& bootstrap) -> void {
+          RELEASE_ASSERT(bootstrap.mutable_static_resources()->clusters_size() >= 1, "");
+          ConfigHelper::HttpProtocolOptions protocol_options;
+          protocol_options.mutable_explicit_http_config()
+              ->mutable_http3_protocol_options()
+              ->mutable_quic_protocol_options()
+              ->mutable_max_concurrent_streams()
+              ->set_value(10000);
+          ConfigHelper::setProtocolOptions(
+              *bootstrap.mutable_static_resources()->mutable_clusters(0), protocol_options);
+        });
+  }
+
+  manySimultaneousRequests(1024, 1024, 10);
+}
+
 TEST_P(MultiplexedUpstreamIntegrationTest, ManyLargeSimultaneousRequestWithBufferLimits) {
   config_helper_.setBufferLimits(1024, 1024); // Set buffer limits upstream and downstream.
   manySimultaneousRequests(1024 * 20, 1024 * 20);