diff --git a/xds/internal/clients/xdsclient/authority.go b/xds/internal/clients/xdsclient/authority.go
index 4c8fd545f2df..f50e0ba5f1db 100644
--- a/xds/internal/clients/xdsclient/authority.go
+++ b/xds/internal/clients/xdsclient/authority.go
@@ -333,7 +333,9 @@ func (a *authority) adsResourceUpdate(serverConfig *ServerConfig, rType Resource
 //
 // Only executed in the context of a serializer callback.
 func (a *authority) handleADSResourceUpdate(serverConfig *ServerConfig, rType ResourceType, updates map[string]dataAndErrTuple, md xdsresource.UpdateMetadata, onDone func()) {
-	a.handleRevertingToPrimaryOnUpdate(serverConfig)
+	if !a.handleRevertingToPrimaryOnUpdate(serverConfig) {
+		return
+	}
 
 	// We build a list of callback funcs to invoke, and invoke them at the end
 	// of this method instead of inline (when handling the update for a
@@ -551,12 +553,23 @@ func (a *authority) handleADSResourceDoesNotExist(rType ResourceType, resourceNa
 // lower priority servers are closed and the active server is reverted to the
 // highest priority server that sent the update.
 //
+// The return value indicates whether subsequent processing of the resource
+// update should continue or not.
+//
 // This method is only executed in the context of a serializer callback.
-func (a *authority) handleRevertingToPrimaryOnUpdate(serverConfig *ServerConfig) {
-	if a.activeXDSChannel != nil && isServerConfigEqual(serverConfig, a.activeXDSChannel.serverConfig) {
+func (a *authority) handleRevertingToPrimaryOnUpdate(serverConfig *ServerConfig) bool {
+	if a.activeXDSChannel == nil {
+		// This can happen only when all watches on this authority have been
+		// removed, and the xdsChannels have been closed. This update should
+		// have been received prior to closing of the channel, and therefore
+		// must be ignored.
+		return false
+	}
+
+	if isServerConfigEqual(serverConfig, a.activeXDSChannel.serverConfig) {
 		// If the resource update is from the current active server, nothing
 		// needs to be done from fallback point of view.
-		return
+		return true
 	}
 
 	if a.logger.V(2) {
@@ -564,10 +577,23 @@ func (a *authority) handleRevertingToPrimaryOnUpdate(serverConfig *ServerConfig)
 	}
 
 	// If the resource update is not from the current active server, it means
-	// that we have received an update from a higher priority server and we need
-	// to revert back to it. This method guarantees that when an update is
-	// received from a server, all lower priority servers are closed.
+	// that we have received an update either from:
+	// - a server that has a higher priority than the current active server and
+	//   therefore we need to revert back to it and close all lower priority
+	//   servers, or,
+	// - a server that has a lower priority than the current active server. This
+	//   can happen when the server close and the response race against each
+	//   other. We can safely ignore this update, since we have already reverted
+	//   to the higher priority server, and closed all lower priority servers.
 	serverIdx := a.serverIndexForConfig(serverConfig)
+	activeServerIdx := a.serverIndexForConfig(a.activeXDSChannel.serverConfig)
+	if activeServerIdx < serverIdx {
+		return false
+	}
+
+	// At this point, we are guaranteed that we have received a response from a
+	// higher priority server compared to the current active server. So, we
+	// revert to the higher priorty server and close all lower priority ones.
 	a.activeXDSChannel = a.xdsChannelConfigs[serverIdx]
 
 	// Close all lower priority channels.
@@ -605,6 +631,7 @@ func (a *authority) handleRevertingToPrimaryOnUpdate(serverConfig *ServerConfig)
 		}
 		cfg.channel = nil
 	}
+	return true
 }
 
 // watchResource registers a new watcher for the specified resource type and