diff --git a/common/changes/@rushstack/node-core-library/fix-async-concurrency_2022-05-10-00-46.json b/common/changes/@rushstack/node-core-library/fix-async-concurrency_2022-05-10-00-46.json
new file mode 100644
index 00000000000..815d03eee71
--- /dev/null
+++ b/common/changes/@rushstack/node-core-library/fix-async-concurrency_2022-05-10-00-46.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@rushstack/node-core-library",
+      "comment": "Fix and issue where Async.forEachAsync with an async iterator can overflow the max concurrency",
+      "type": "patch"
+    }
+  ],
+  "packageName": "@rushstack/node-core-library"
+}
\ No newline at end of file
diff --git a/libraries/node-core-library/src/Async.ts b/libraries/node-core-library/src/Async.ts
index 5b1bfa27857..194ec1a61ae 100644
--- a/libraries/node-core-library/src/Async.ts
+++ b/libraries/node-core-library/src/Async.ts
@@ -100,12 +100,14 @@ export class Async {
 
       async function queueOperationsAsync(): Promise<void> {
         while (operationsInProgress < concurrency && !iteratorIsComplete && !promiseHasResolvedOrRejected) {
+          // Increment the concurrency while waiting for the iterator.
+          // This function is reentrant, so this ensures that at most `concurrency` executions are waiting
+          operationsInProgress++;
           const currentIteratorResult: IteratorResult<TEntry> = await iterator.next();
           // eslint-disable-next-line require-atomic-updates
           iteratorIsComplete = !!currentIteratorResult.done;
 
           if (!iteratorIsComplete) {
-            operationsInProgress++;
             Promise.resolve(callback(currentIteratorResult.value, arrayIndex++))
               .then(async () => {
                 operationsInProgress--;
@@ -115,6 +117,9 @@ export class Async {
                 promiseHasResolvedOrRejected = true;
                 reject(error);
               });
+          } else {
+            // The iterator is complete and there wasn't a value, so untrack the waiting state.
+            operationsInProgress--;
           }
         }