diff --git a/eth/downloader/downloader.go b/eth/downloader/downloader.go
index 85531ce15..f52a97610 100644
--- a/eth/downloader/downloader.go
+++ b/eth/downloader/downloader.go
@@ -27,9 +27,10 @@ const (
 )
 
 var (
-	blockTTL            = 5 * time.Second // Time it takes for a block request to time out
-	crossCheckCycle     = time.Second     // Period after which to check for expired cross checks
-	minDesiredPeerCount = 5               // Amount of peers desired to start syncing
+	blockSoftTTL        = 3 * time.Second  // Request completion threshold for increasing or decreasing a peer's bandwidth
+	blockHardTTL        = 3 * blockSoftTTL // Maximum time allowance before a block request is considered expired
+	crossCheckCycle     = time.Second      // Period after which to check for expired cross checks
+	minDesiredPeerCount = 5                // Amount of peers desired to start syncing
 )
 
 var (
@@ -324,7 +325,7 @@ func (d *Downloader) fetchHashes(p *peer, h common.Hash) error {
 				glog.V(logger.Detail).Infof("Cross checking (%s) with %x/%x", active.id, origin, parent)
 
 				d.checks[origin] = &crossCheck{
-					expire: time.Now().Add(blockTTL),
+					expire: time.Now().Add(blockSoftTTL),
 					parent: parent,
 				}
 				active.getBlocks([]common.Hash{origin})
@@ -429,6 +430,7 @@ out:
 					// Peer did deliver, but some blocks were off, penalize
 					glog.V(logger.Debug).Infof("Failed delivery for peer %s: %v\n", blockPack.peerId, err)
 					peer.Demote()
+					peer.SetIdle()
 					break
 				}
 				if glog.V(logger.Debug) && len(blockPack.blocks) > 0 {
@@ -444,7 +446,7 @@ out:
 			// that badly or poorly behave are removed from the peer set (not banned).
 			// Bad peers are excluded from the available peer set and therefor won't be
 			// reused. XXX We could re-introduce peers after X time.
-			badPeers := d.queue.Expire(blockTTL)
+			badPeers := d.queue.Expire(blockHardTTL)
 			for _, pid := range badPeers {
 				// XXX We could make use of a reputation system here ranking peers
 				// in their performance
@@ -475,7 +477,7 @@ out:
 					}
 					// Get a possible chunk. If nil is returned no chunk
 					// could be returned due to no hashes available.
-					request := d.queue.Reserve(peer, MaxBlockFetch)
+					request := d.queue.Reserve(peer)
 					if request == nil {
 						continue
 					}
diff --git a/eth/downloader/downloader_test.go b/eth/downloader/downloader_test.go
index 66be1ca18..ef94ddbab 100644
--- a/eth/downloader/downloader_test.go
+++ b/eth/downloader/downloader_test.go
@@ -191,7 +191,7 @@ func (dl *downloadTester) badBlocksPeer(id string, td *big.Int, hash common.Hash
 
 func TestDownload(t *testing.T) {
 	minDesiredPeerCount = 4
-	blockTTL = 1 * time.Second
+	blockHardTTL = 1 * time.Second
 
 	targetBlocks := 1000
 	hashes := createHashes(0, targetBlocks)
@@ -240,7 +240,7 @@ func TestMissing(t *testing.T) {
 
 func TestTaking(t *testing.T) {
 	minDesiredPeerCount = 4
-	blockTTL = 1 * time.Second
+	blockHardTTL = 1 * time.Second
 
 	targetBlocks := 1000
 	hashes := createHashes(0, targetBlocks)
@@ -281,7 +281,7 @@ func TestInactiveDownloader(t *testing.T) {
 
 func TestCancel(t *testing.T) {
 	minDesiredPeerCount = 4
-	blockTTL = 1 * time.Second
+	blockHardTTL = 1 * time.Second
 
 	targetBlocks := 1000
 	hashes := createHashes(0, targetBlocks)
@@ -307,7 +307,7 @@ func TestCancel(t *testing.T) {
 
 func TestThrottling(t *testing.T) {
 	minDesiredPeerCount = 4
-	blockTTL = 1 * time.Second
+	blockHardTTL = 1 * time.Second
 
 	targetBlocks := 16 * blockCacheLimit
 	hashes := createHashes(0, targetBlocks)
@@ -461,7 +461,7 @@ func TestInvalidHashOrderAttack(t *testing.T) {
 // Tests that if a malicious peer makes up a random hash chain and tries to push
 // indefinitely, it actually gets caught with it.
 func TestMadeupHashChainAttack(t *testing.T) {
-	blockTTL = 100 * time.Millisecond
+	blockSoftTTL = 100 * time.Millisecond
 	crossCheckCycle = 25 * time.Millisecond
 
 	// Create a long chain of hashes without backing blocks
@@ -495,10 +495,10 @@ func TestMadeupHashChainDrippingAttack(t *testing.T) {
 // Tests that if a malicious peer makes up a random block chain, and tried to
 // push indefinitely, it actually gets caught with it.
 func TestMadeupBlockChainAttack(t *testing.T) {
-	defaultBlockTTL := blockTTL
+	defaultBlockTTL := blockSoftTTL
 	defaultCrossCheckCycle := crossCheckCycle
 
-	blockTTL = 100 * time.Millisecond
+	blockSoftTTL = 100 * time.Millisecond
 	crossCheckCycle = 25 * time.Millisecond
 
 	// Create a long chain of blocks and simulate an invalid chain by dropping every second
@@ -516,7 +516,7 @@ func TestMadeupBlockChainAttack(t *testing.T) {
 		t.Fatalf("synchronisation error mismatch: have %v, want %v", err, ErrCrossCheckFailed)
 	}
 	// Ensure that a valid chain can still pass sync
-	blockTTL = defaultBlockTTL
+	blockSoftTTL = defaultBlockTTL
 	crossCheckCycle = defaultCrossCheckCycle
 
 	tester.hashes = hashes
@@ -530,10 +530,10 @@ func TestMadeupBlockChainAttack(t *testing.T) {
 // attacker make up a valid hashes for random blocks, but also forges the block
 // parents to point to existing hashes.
 func TestMadeupParentBlockChainAttack(t *testing.T) {
-	defaultBlockTTL := blockTTL
+	defaultBlockTTL := blockSoftTTL
 	defaultCrossCheckCycle := crossCheckCycle
 
-	blockTTL = 100 * time.Millisecond
+	blockSoftTTL = 100 * time.Millisecond
 	crossCheckCycle = 25 * time.Millisecond
 
 	// Create a long chain of blocks and simulate an invalid chain by dropping every second
@@ -550,7 +550,7 @@ func TestMadeupParentBlockChainAttack(t *testing.T) {
 		t.Fatalf("synchronisation error mismatch: have %v, want %v", err, ErrCrossCheckFailed)
 	}
 	// Ensure that a valid chain can still pass sync
-	blockTTL = defaultBlockTTL
+	blockSoftTTL = defaultBlockTTL
 	crossCheckCycle = defaultCrossCheckCycle
 
 	tester.blocks = blocks
diff --git a/eth/downloader/peer.go b/eth/downloader/peer.go
index 4abae8d5e..df54eecbd 100644
--- a/eth/downloader/peer.go
+++ b/eth/downloader/peer.go
@@ -5,10 +5,14 @@ package downloader
 
 import (
 	"errors"
+	"math"
 	"sync"
 	"sync/atomic"
+	"time"
 
 	"github.com/ethereum/go-ethereum/common"
+	"github.com/ethereum/go-ethereum/logger"
+	"github.com/ethereum/go-ethereum/logger/glog"
 	"gopkg.in/fatih/set.v0"
 )
 
@@ -27,14 +31,15 @@ type peer struct {
 	head common.Hash // Hash of the peers latest known block
 
 	idle int32 // Current activity state of the peer (idle = 0, active = 1)
-	rep  int32 // Simple peer reputation (not used currently)
+	rep  int32 // Simple peer reputation
 
-	mu sync.RWMutex
+	capacity int32     // Number of blocks allowed to fetch per request
+	started  time.Time // Time instance when the last fetch was started
 
-	ignored *set.Set
+	ignored *set.Set // Set of hashes not to request (didn't have previously)
 
-	getHashes hashFetcherFn
-	getBlocks blockFetcherFn
+	getHashes hashFetcherFn  // Method to retrieve a batch of hashes (mockable for testing)
+	getBlocks blockFetcherFn // Method to retrieve a batch of blocks (mockable for testing)
 }
 
 // newPeer create a new downloader peer, with specific hash and block retrieval
@@ -43,6 +48,7 @@ func newPeer(id string, head common.Hash, getHashes hashFetcherFn, getBlocks blo
 	return &peer{
 		id:        id,
 		head:      head,
+		capacity:  1,
 		getHashes: getHashes,
 		getBlocks: getBlocks,
 		ignored:   set.New(),
@@ -52,6 +58,7 @@ func newPeer(id string, head common.Hash, getHashes hashFetcherFn, getBlocks blo
 // Reset clears the internal state of a peer entity.
 func (p *peer) Reset() {
 	atomic.StoreInt32(&p.idle, 0)
+	atomic.StoreInt32(&p.capacity, 1)
 	p.ignored.Clear()
 }
 
@@ -61,6 +68,8 @@ func (p *peer) Fetch(request *fetchRequest) error {
 	if !atomic.CompareAndSwapInt32(&p.idle, 0, 1) {
 		return errAlreadyFetching
 	}
+	p.started = time.Now()
+
 	// Convert the hash set to a retrievable slice
 	hashes := make([]common.Hash, 0, len(request.Hashes))
 	for hash, _ := range request.Hashes {
@@ -72,10 +81,36 @@ func (p *peer) Fetch(request *fetchRequest) error {
 }
 
 // SetIdle sets the peer to idle, allowing it to execute new retrieval requests.
+// Its block retrieval allowance will also be updated either up- or downwards,
+// depending on whether the previous fetch completed in time or not.
 func (p *peer) SetIdle() {
+	// Update the peer's download allowance based on previous performance
+	scale := 2.0
+	if time.Since(p.started) > blockSoftTTL {
+		scale = 0.5
+	}
+	for {
+		// Calculate the new download bandwidth allowance
+		prev := atomic.LoadInt32(&p.capacity)
+		next := int32(math.Max(1, math.Min(MaxBlockFetch, float64(prev)*scale)))
+		if scale < 1 {
+			glog.V(logger.Detail).Infof("%s: reducing block allowance from %d to %d", p.id, prev, next)
+		}
+		// Try to update the old value
+		if atomic.CompareAndSwapInt32(&p.capacity, prev, next) {
+			break
+		}
+	}
+	// Set the peer to idle to allow further block requests
 	atomic.StoreInt32(&p.idle, 0)
 }
 
+// Capacity retrieves the peers block download allowance based on its previously
+// discovered bandwidth capacity.
+func (p *peer) Capacity() int {
+	return int(atomic.LoadInt32(&p.capacity))
+}
+
 // Promote increases the peer's reputation.
 func (p *peer) Promote() {
 	atomic.AddInt32(&p.rep, 1)
diff --git a/eth/downloader/queue.go b/eth/downloader/queue.go
index 7ea400dc4..69d91512a 100644
--- a/eth/downloader/queue.go
+++ b/eth/downloader/queue.go
@@ -203,7 +203,7 @@ func (q *queue) TakeBlocks() []*Block {
 
 // Reserve reserves a set of hashes for the given peer, skipping any previously
 // failed download.
-func (q *queue) Reserve(p *peer, max int) *fetchRequest {
+func (q *queue) Reserve(p *peer) *fetchRequest {
 	q.lock.Lock()
 	defer q.lock.Unlock()
 
@@ -215,11 +215,17 @@ func (q *queue) Reserve(p *peer, max int) *fetchRequest {
 	if _, ok := q.pendPool[p.id]; ok {
 		return nil
 	}
+	// Calculate an upper limit on the hashes we might fetch (i.e. throttling)
+	space := len(q.blockCache) - len(q.blockPool)
+	for _, request := range q.pendPool {
+		space -= len(request.Hashes)
+	}
 	// Retrieve a batch of hashes, skipping previously failed ones
 	send := make(map[common.Hash]int)
 	skip := make(map[common.Hash]int)
 
-	for len(send) < max && !q.hashQueue.Empty() {
+	capacity := p.Capacity()
+	for len(send) < space && len(send) < capacity && !q.hashQueue.Empty() {
 		hash, priority := q.hashQueue.Pop()
 		if p.ignored.Has(hash) {
 			skip[hash.(common.Hash)] = int(priority)
diff --git a/eth/downloader/queue_test.go b/eth/downloader/queue_test.go
index b1f3591f3..ee6141f71 100644
--- a/eth/downloader/queue_test.go
+++ b/eth/downloader/queue_test.go
@@ -1,8 +1,6 @@
 package downloader
 
 import (
-	"testing"
-
 	"github.com/ethereum/go-ethereum/common"
 	"github.com/ethereum/go-ethereum/core/types"
 	"gopkg.in/fatih/set.v0"
@@ -30,32 +28,3 @@ func createBlocksFromHashSet(hashes *set.Set) []*types.Block {
 
 	return blocks
 }
-
-func TestChunking(t *testing.T) {
-	queue := newQueue()
-	peer1 := newPeer("peer1", common.Hash{}, nil, nil)
-	peer2 := newPeer("peer2", common.Hash{}, nil, nil)
-
-	// 99 + 1 (1 == known genesis hash)
-	hashes := createHashes(0, 99)
-	queue.Insert(hashes)
-
-	chunk1 := queue.Reserve(peer1, 99)
-	if chunk1 == nil {
-		t.Errorf("chunk1 is nil")
-		t.FailNow()
-	}
-	chunk2 := queue.Reserve(peer2, 99)
-	if chunk2 == nil {
-		t.Errorf("chunk2 is nil")
-		t.FailNow()
-	}
-
-	if len(chunk1.Hashes) != 99 {
-		t.Error("expected chunk1 hashes to be 99, got", len(chunk1.Hashes))
-	}
-
-	if len(chunk2.Hashes) != 1 {
-		t.Error("expected chunk1 hashes to be 1, got", len(chunk2.Hashes))
-	}
-}