diff --git a/zebra-network/src/peer/client.rs b/zebra-network/src/peer/client.rs
index 93ac3b187..6e55775b9 100644
--- a/zebra-network/src/peer/client.rs
+++ b/zebra-network/src/peer/client.rs
@@ -11,13 +11,19 @@ use futures::{
 };
 use tower::Service;
 
-use crate::protocol::{
-    external::types::Version,
-    internal::{Request, Response},
+use crate::{
+    peer::error::AlreadyErrored,
+    protocol::{
+        external::types::Version,
+        internal::{Request, Response},
+    },
 };
 
 use super::{ErrorSlot, PeerError, SharedPeerError};
 
+#[cfg(test)]
+mod tests;
+
 /// The "client" duplex half of a peer connection.
 pub struct Client {
     /// Used to shut down the corresponding heartbeat.
@@ -68,8 +74,6 @@ pub(super) struct ClientRequestReceiver {
 
 /// A message from the `peer::Client` to the `peer::Server`,
 /// after it has been received by the `peer::Server`.
-///
-///
 #[derive(Debug)]
 #[must_use = "tx.send() must be called before drop"]
 pub(super) struct InProgressClientRequest {
@@ -129,10 +133,29 @@ impl From<ClientRequest> for InProgressClientRequest {
 }
 
 impl ClientRequestReceiver {
-    /// Forwards to `inner.close()`
+    /// Forwards to `inner.close()`.
     pub fn close(&mut self) {
         self.inner.close()
     }
+
+    /// Closes `inner`, then gets the next pending [`Request`].
+    ///
+    /// Closing the channel ensures that:
+    /// - the request stream terminates, and
+    /// - task notifications are not required.
+    pub fn close_and_flush_next(&mut self) -> Option<InProgressClientRequest> {
+        self.inner.close();
+
+        // # Correctness
+        //
+        // The request stream terminates, because the sender is closed,
+        // and the channel has a limited capacity.
+        // Task notifications are not required, because the sender is closed.
+        self.inner
+            .try_next()
+            .expect("channel is closed")
+            .map(Into::into)
+    }
 }
 
 impl Stream for ClientRequestReceiver {
@@ -227,6 +250,62 @@ impl<T: std::fmt::Debug> Drop for MustUseOneshotSender<T> {
     }
 }
 
+impl Client {
+    /// Check if this connection's heartbeat task has exited.
+    fn check_heartbeat(&mut self, cx: &mut Context<'_>) -> Result<(), SharedPeerError> {
+        if let Poll::Ready(()) = self
+            .shutdown_tx
+            .as_mut()
+            .expect("only taken on drop")
+            .poll_canceled(cx)
+        {
+            // Make sure there is an error in the slot
+            let heartbeat_error: SharedPeerError = PeerError::HeartbeatTaskExited.into();
+            let original_error = self.error_slot.try_update_error(heartbeat_error.clone());
+            debug!(
+                ?original_error,
+                latest_error = ?heartbeat_error,
+                "client heartbeat task exited"
+            );
+
+            if let Err(AlreadyErrored { original_error }) = original_error {
+                Err(original_error)
+            } else {
+                Err(heartbeat_error)
+            }
+        } else {
+            Ok(())
+        }
+    }
+
+    /// Poll for space in the shared request sender channel.
+    fn poll_request(&mut self, cx: &mut Context<'_>) -> Poll<Result<(), SharedPeerError>> {
+        if ready!(self.server_tx.poll_ready(cx)).is_err() {
+            Poll::Ready(Err(self
+                .error_slot
+                .try_get_error()
+                .expect("failed servers must set their error slot")))
+        } else if let Some(error) = self.error_slot.try_get_error() {
+            Poll::Ready(Err(error))
+        } else {
+            Poll::Ready(Ok(()))
+        }
+    }
+
+    /// Shut down the resources held by the client half of this peer connection.
+    ///
+    /// Stops further requests to the remote peer, and stops the heartbeat task.
+    fn shutdown(&mut self) {
+        // Prevent any senders from sending more messages to this peer.
+        self.server_tx.close_channel();
+
+        // Stop the heartbeat task
+        if let Some(shutdown_tx) = self.shutdown_tx.take() {
+            let _ = shutdown_tx.send(CancelHeartbeatTask);
+        }
+    }
+}
+
 impl Service<Request> for Client {
     type Response = Response;
     type Error = SharedPeerError;
@@ -234,24 +313,27 @@ impl Service<Request> for Client {
         Pin<Box<dyn Future<Output = Result<Self::Response, Self::Error>> + Send + 'static>>;
 
     fn poll_ready(&mut self, cx: &mut Context<'_>) -> Poll<Result<(), Self::Error>> {
-        // CORRECTNESS
+        // # Correctness
         //
         // The current task must be scheduled for wakeup every time we return
         // `Poll::Pending`.
         //
+        // `poll_canceled` schedules the client task for wakeup
+        // if the heartbeat task exits and drops the cancel handle.
+        //
         //`ready!` returns `Poll::Pending` when `server_tx` is unready, and
         // schedules this task for wakeup.
-        //
-        // Since `shutdown_tx` is used for oneshot communication to the heartbeat
-        // task, it will never be `Pending`.
-        //
-        // TODO: should the Client exit if the heartbeat task exits and drops
-        // `shutdown_tx`?
-        if ready!(self.server_tx.poll_ready(cx)).is_err() {
-            Poll::Ready(Err(self
-                .error_slot
-                .try_get_error()
-                .expect("failed servers must set their error slot")))
+
+        let mut result = self.check_heartbeat(cx);
+
+        if result.is_ok() {
+            result = ready!(self.poll_request(cx));
+        }
+
+        if let Err(error) = result {
+            self.shutdown();
+
+            Poll::Ready(Err(error))
         } else {
             Poll::Ready(Ok(()))
         }
@@ -297,10 +379,15 @@ impl Service<Request> for Client {
 
 impl Drop for Client {
     fn drop(&mut self) {
-        let _ = self
-            .shutdown_tx
-            .take()
-            .expect("must not drop twice")
-            .send(CancelHeartbeatTask);
+        // Make sure there is an error in the slot
+        let drop_error: SharedPeerError = PeerError::ClientDropped.into();
+        let original_error = self.error_slot.try_update_error(drop_error.clone());
+        debug!(
+            ?original_error,
+            latest_error = ?drop_error,
+            "client struct dropped"
+        );
+
+        self.shutdown();
     }
 }
diff --git a/zebra-network/src/peer/client/tests.rs b/zebra-network/src/peer/client/tests.rs
new file mode 100644
index 000000000..78babc731
--- /dev/null
+++ b/zebra-network/src/peer/client/tests.rs
@@ -0,0 +1,3 @@
+//! Tests for the [`Client`] part of peer connections
+
+mod vectors;
diff --git a/zebra-network/src/peer/client/tests/vectors.rs b/zebra-network/src/peer/client/tests/vectors.rs
new file mode 100644
index 000000000..3d18d790e
--- /dev/null
+++ b/zebra-network/src/peer/client/tests/vectors.rs
@@ -0,0 +1,233 @@
+//! Fixed peer [`Client`] test vectors.
+
+use futures::{
+    channel::{mpsc, oneshot},
+    FutureExt,
+};
+use tower::ServiceExt;
+
+use crate::{
+    peer::{CancelHeartbeatTask, Client, ErrorSlot},
+    protocol::external::types::Version,
+    PeerError,
+};
+
+#[tokio::test]
+async fn client_service_ready_ok() {
+    zebra_test::init();
+
+    let (shutdown_tx, mut shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Ok(Client { .. }))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, None));
+
+    let result = shutdown_rx.try_recv();
+    assert!(matches!(result, Ok(None)));
+
+    // Unlike oneshots, open futures::mpsc channels return Err when empty
+    let result = server_rx.try_next();
+    assert!(matches!(result, Err(_)));
+}
+
+#[tokio::test]
+async fn client_service_ready_heartbeat_exit() {
+    zebra_test::init();
+
+    let (shutdown_tx, shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    shared_error_slot
+        .try_update_error(PeerError::HeartbeatTaskExited.into())
+        .expect("unexpected earlier error in tests");
+    std::mem::drop(shutdown_rx);
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Err(_))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    // Unlike oneshots, closed futures::mpsc channels return None
+    let result = server_rx.try_next();
+    assert!(matches!(result, Ok(None)));
+}
+
+#[tokio::test]
+async fn client_service_ready_request_drop() {
+    zebra_test::init();
+
+    let (shutdown_tx, mut shutdown_rx) = oneshot::channel();
+    let (server_tx, server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    shared_error_slot
+        .try_update_error(PeerError::ConnectionDropped.into())
+        .expect("unexpected earlier error in tests");
+    std::mem::drop(server_rx);
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Err(_))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    let result = shutdown_rx.try_recv();
+    assert!(matches!(result, Ok(Some(CancelHeartbeatTask))));
+}
+
+#[tokio::test]
+async fn client_service_ready_request_close() {
+    zebra_test::init();
+
+    let (shutdown_tx, mut shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    shared_error_slot
+        .try_update_error(PeerError::ConnectionClosed.into())
+        .expect("unexpected earlier error in tests");
+    server_rx.close();
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Err(_))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    let result = shutdown_rx.try_recv();
+    assert!(matches!(result, Ok(Some(CancelHeartbeatTask))));
+
+    let result = server_rx.try_next();
+    assert!(matches!(result, Ok(None)));
+}
+
+#[tokio::test]
+async fn client_service_ready_error_in_slot() {
+    zebra_test::init();
+
+    let (shutdown_tx, mut shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    shared_error_slot
+        .try_update_error(PeerError::Overloaded.into())
+        .expect("unexpected earlier error in tests");
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Err(_))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    let result = shutdown_rx.try_recv();
+    assert!(matches!(result, Ok(Some(CancelHeartbeatTask))));
+
+    let result = server_rx.try_next();
+    assert!(matches!(result, Ok(None)));
+}
+
+#[tokio::test]
+async fn client_service_ready_multiple_errors() {
+    zebra_test::init();
+
+    let (shutdown_tx, shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let mut client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    shared_error_slot
+        .try_update_error(PeerError::DuplicateHandshake.into())
+        .expect("unexpected earlier error in tests");
+    std::mem::drop(shutdown_rx);
+    server_rx.close();
+
+    let result = client.ready().now_or_never();
+    assert!(matches!(result, Some(Err(_))));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    let result = server_rx.try_next();
+    assert!(matches!(result, Ok(None)));
+}
+
+#[tokio::test]
+async fn client_service_drop_cleanup() {
+    zebra_test::init();
+
+    let (shutdown_tx, mut shutdown_rx) = oneshot::channel();
+    let (server_tx, mut server_rx) = mpsc::channel(1);
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let client = Client {
+        shutdown_tx: Some(shutdown_tx),
+        server_tx,
+        error_slot: shared_error_slot.clone(),
+        version: Version(0),
+    };
+
+    std::mem::drop(client);
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    let result = shutdown_rx.try_recv();
+    assert!(matches!(result, Ok(Some(CancelHeartbeatTask))));
+
+    let result = server_rx.try_next();
+    assert!(matches!(result, Ok(None)));
+}
diff --git a/zebra-network/src/peer/connection.rs b/zebra-network/src/peer/connection.rs
index f5e29ad15..26305ceff 100644
--- a/zebra-network/src/peer/connection.rs
+++ b/zebra-network/src/peer/connection.rs
@@ -38,6 +38,9 @@ use crate::{
     BoxError,
 };
 
+#[cfg(test)]
+mod tests;
+
 #[derive(Debug)]
 pub(super) enum Handler {
     /// Indicates that the handler has finished processing the request.
@@ -420,9 +423,9 @@ pub struct Connection<S, Tx> {
     /// The `inbound` service, used to answer requests from this connection's peer.
     pub(super) svc: S,
 
-    /// A channel that receives network requests from the rest of Zebra.
+    /// A channel for requests that Zebra's internal services want to send to remote peers.
     ///
-    /// This channel produces `InProgressClientRequest`s.
+    /// This channel accepts [`Request`]s, and produces [`InProgressClientRequest`]s.
     pub(super) client_rx: ClientRequestReceiver,
 
     /// A slot for an error shared between the Connection and the Client that uses it.
@@ -430,7 +433,13 @@ pub struct Connection<S, Tx> {
     /// `None` unless the connection or client have errored.
     pub(super) error_slot: ErrorSlot,
 
-    /// A channel for sending requests to the connected peer.
+    /// A channel for sending Zcash messages to the connected peer.
+    ///
+    /// This channel accepts [`Message`]s.
+    ///
+    /// The corresponding peer message receiver is passed to [`Connection::run`].
+    ///
+    /// TODO: add a timeout when sending messages to the remote peer (#3234)
     pub(super) peer_tx: Tx,
 
     /// A connection tracker that reduces the open connection count when dropped.
@@ -442,8 +451,7 @@ pub struct Connection<S, Tx> {
     ///
     /// If this connection tracker or `Connection`s are leaked,
     /// the number of active connections will appear higher than it actually is.
-    ///
-    /// Eventually, Zebra could stop making connections entirely.
+    /// If enough connections leak, Zebra will stop making new connections.
     #[allow(dead_code)]
     pub(super) connection_tracker: ConnectionTracker,
 
@@ -461,6 +469,9 @@ where
     Tx: Sink<Message, Error = SerializationError> + Unpin,
 {
     /// Consume this `Connection` to form a spawnable future containing its event loop.
+    ///
+    /// `peer_rx` is a channel for receiving Zcash [`Message`]s from the connected peer.
+    /// The corresponding peer message receiver is [`Connection.peer_tx`].
     pub async fn run<Rx>(mut self, mut peer_rx: Rx)
     where
         Rx: Stream<Item = Result<Message, SerializationError>> + Unpin,
@@ -484,6 +495,8 @@ where
         //
         // If there is a pending request, we wait only on an incoming peer message, and
         // check whether it can be interpreted as a response to the pending request.
+        //
+        // TODO: turn this comment into a module-level comment, after splitting the module.
         loop {
             self.update_state_metrics(None);
 
@@ -516,7 +529,11 @@ where
                         }
                         Either::Right((None, _)) => {
                             trace!("client_rx closed, ending connection");
-                            return;
+
+                            // There are no requests to be flushed,
+                            // but we need to set an error and update metrics.
+                            self.shutdown(PeerError::ClientDropped);
+                            break;
                         }
                         Either::Right((Some(req), _)) => {
                             let span = req.span.clone();
@@ -646,6 +663,8 @@ where
                                     tx,
                                     ..
                                 } => {
+                                    // We replaced the original state, which means `fail_with` won't see it.
+                                    // So we do the state request cleanup manually.
                                     let e = SharedPeerError::from(e);
                                     let _ = tx.send(Err(e.clone()));
                                     self.fail_with(e);
@@ -663,107 +682,35 @@ where
                             };
                         }
                         Either::Left((Either::Left(_), _peer_fut)) => {
+                            // The client receiver was dropped, so we don't need to send on `tx` here.
                             trace!(parent: &span, "client request was cancelled");
                             self.state = State::AwaitingRequest;
                         }
                     }
                 }
-                // We've failed, but we need to flush all pending client
-                // requests before we can return and complete the future.
-                State::Failed => {
-                    match self.client_rx.next().await {
-                        Some(InProgressClientRequest { tx, span, .. }) => {
-                            trace!(
-                                parent: &span,
-                                "sending an error response to a pending request on a failed connection"
-                            );
-                            // Correctness
-                            //
-                            // Error slots use a threaded `std::sync::Mutex`, so
-                            // accessing the slot can block the async task's
-                            // current thread. So we only hold the lock for long
-                            // enough to get a reference to the error.
-                            let e = self
-                                .error_slot
-                                .try_get_error()
-                                .expect("cannot enter failed state without setting error slot");
-                            let _ = tx.send(Err(e));
-                            // Continue until we've errored all queued reqs
-                            continue;
-                        }
-                        None => return,
-                    }
-                }
+                // This connection has failed: stop the event loop, and complete the future.
+                State::Failed => break,
             }
         }
+
+        assert!(
+            self.error_slot.try_get_error().is_some(),
+            "closing connections must call fail_with() or shutdown() to set the error slot"
+        );
     }
 
-    /// Marks the peer as having failed with error `e`.
+    /// Fail this connection.
     ///
-    /// # Panics
-    ///
-    /// If `self` has already failed with a previous error.
-    fn fail_with<E>(&mut self, e: E)
-    where
-        E: Into<SharedPeerError>,
-    {
-        let e = e.into();
-        debug!(%e,
-               connection_state = ?self.state,
+    /// If the connection has errored already, re-use the original error.
+    /// Otherwise, fail the connection with `error`.
+    fn fail_with(&mut self, error: impl Into<SharedPeerError>) {
+        let error = error.into();
+
+        debug!(%error,
                client_receiver = ?self.client_rx,
                "failing peer service with error");
 
-        // Update the shared error slot
-        //
-        // # Correctness
-        //
-        // Error slots use a threaded `std::sync::Mutex`, so accessing the slot
-        // can block the async task's current thread. We only perform a single
-        // slot update per `Client`, and panic to enforce this constraint.
-        //
-        // This assertion typically fails due to these bugs:
-        // * we mark a connection as failed without using fail_with
-        // * we call fail_with without checking for a failed connection
-        //   state
-        // * we continue processing messages after calling fail_with
-        //
-        // See the original bug #1510 and PR #1531, and the later bug #1599
-        // and PR #1600.
-        let error_result = self.error_slot.try_update_error(e.clone());
-
-        if let Err(AlreadyErrored { original_error }) = error_result {
-            panic!(
-                "multiple failures for connection: \n\
-                 failed connections should stop processing pending requests and responses, \n\
-                 then close the connection. \n\
-                 state: {:?} \n\
-                 client receiver: {:?} \n\
-                 original error: {:?} \n\
-                 new error: {:?}",
-                self.state, self.client_rx, original_error, e,
-            );
-        }
-
-        // We want to close the client channel and set State::Failed so
-        // that we can flush any pending client requests. However, we may have
-        // an outstanding client request in State::AwaitingResponse, so
-        // we need to deal with it first if it exists.
-        self.client_rx.close();
-        let old_state = std::mem::replace(&mut self.state, State::Failed);
-        self.update_state_metrics(None);
-
-        if let State::AwaitingResponse { tx, .. } = old_state {
-            // # Correctness
-            //
-            // We know the slot has Some(e) because we just set it above,
-            // and the error slot is never unset.
-            //
-            // Accessing the error slot locks a threaded std::sync::Mutex, which
-            // can block the current async task thread. We briefly lock the mutex
-            // to get a reference to the error.
-            let e = self.error_slot.try_get_error().unwrap();
-            let _ = tx.send(Err(e));
-        }
+        self.shutdown(error);
     }
 
     /// Handle an incoming client request, possibly generating outgoing messages to the
@@ -1273,19 +1220,89 @@ impl<S, Tx> Connection<S, Tx> {
             );
         }
     }
+
+    /// Marks the peer as having failed with `error`, and performs connection cleanup.
+    ///
+    /// If the connection has errored already, re-use the original error.
+    /// Otherwise, fail the connection with `error`.
+    fn shutdown(&mut self, error: impl Into<SharedPeerError>) {
+        let mut error = error.into();
+
+        // Close channels first, so other tasks can start shutting down.
+        //
+        // TODO: close peer_tx and peer_rx, after:
+        // - adapting them using a struct with a Stream impl, rather than closures
+        // - making the struct forward `close` to the inner channel
+        self.client_rx.close();
+
+        // Update the shared error slot
+        //
+        // # Correctness
+        //
+        // Error slots use a threaded `std::sync::Mutex`, so accessing the slot
+        // can block the async task's current thread. We only perform a single
+        // slot update per `Client`. We ignore subsequent error slot updates.
+        let slot_result = self.error_slot.try_update_error(error.clone());
+
+        if let Err(AlreadyErrored { original_error }) = slot_result {
+            debug!(
+                new_error = %error,
+                %original_error,
+                connection_state = ?self.state,
+                "multiple errors on connection: \
+                 failed connections should stop processing pending requests and responses, \
+                 then close the connection"
+            );
+
+            error = original_error;
+        } else {
+            debug!(%error,
+                   connection_state = ?self.state,
+                   "shutting down peer service with error");
+        }
+
+        // Prepare to flush any pending client requests.
+        //
+        // We've already closed the client channel, so setting State::Failed
+        // will make the main loop flush any pending requests.
+        //
+        // However, we may have an outstanding client request in State::AwaitingResponse,
+        // so we need to deal with it first.
+        if let State::AwaitingResponse { tx, .. } =
+            std::mem::replace(&mut self.state, State::Failed)
+        {
+            // # Correctness
+            //
+            // We know the slot has Some(error), because we just set it above,
+            // and the error slot is never unset.
+            //
+            // Accessing the error slot locks a threaded std::sync::Mutex, which
+            // can block the current async task thread. We briefly lock the mutex
+            // to clone the error.
+            let _ = tx.send(Err(error.clone()));
+        }
+
+        // Make the timer and metrics consistent with the Failed state.
+        self.request_timer = None;
+        self.update_state_metrics(None);
+
+        // Finally, flush pending client requests.
+        while let Some(InProgressClientRequest { tx, span, .. }) =
+            self.client_rx.close_and_flush_next()
+        {
+            trace!(
+                parent: &span,
+                %error,
+                "sending an error response to a pending request on a failed connection"
+            );
+            let _ = tx.send(Err(error.clone()));
+        }
+    }
 }
 
 impl<S, Tx> Drop for Connection<S, Tx> {
     fn drop(&mut self) {
-        if let State::AwaitingResponse { tx, .. } =
-            std::mem::replace(&mut self.state, State::Failed)
-        {
-            if let Some(error) = self.error_slot.try_get_error() {
-                let _ = tx.send(Err(error));
-            } else {
-                let _ = tx.send(Err(PeerError::ConnectionDropped.into()));
-            }
-        }
+        self.shutdown(PeerError::ConnectionDropped);
 
         self.erase_state_metrics();
     }
diff --git a/zebra-network/src/peer/connection/tests.rs b/zebra-network/src/peer/connection/tests.rs
new file mode 100644
index 000000000..d82199e8e
--- /dev/null
+++ b/zebra-network/src/peer/connection/tests.rs
@@ -0,0 +1,3 @@
+//! Tests for peer connections
+
+mod vectors;
diff --git a/zebra-network/src/peer/connection/tests/vectors.rs b/zebra-network/src/peer/connection/tests/vectors.rs
new file mode 100644
index 000000000..b98b3e45c
--- /dev/null
+++ b/zebra-network/src/peer/connection/tests/vectors.rs
@@ -0,0 +1,410 @@
+//! Fixed test vectors for peer connections.
+//!
+//! TODO:
+//! - connection tests when awaiting requests (#3232)
+//! - connection tests with closed/dropped peer_outbound_tx (#3233)
+
+use futures::{channel::mpsc, FutureExt};
+use tokio_util::codec::FramedWrite;
+use tower::service_fn;
+use zebra_chain::parameters::Network;
+
+use crate::{
+    peer::{client::ClientRequestReceiver, connection::State, Connection, ErrorSlot},
+    peer_set::ActiveConnectionCounter,
+    protocol::external::Codec,
+    PeerError,
+};
+
+#[tokio::test]
+async fn connection_run_loop_ok() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    // The real stream and sink are from a split TCP connection,
+    // but that doesn't change how the state machine behaves.
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // The run loop will wait forever for a request from Zebra or the peer,
+    // without any errors, channel closes, or bytes written.
+    //
+    // But the connection closes if we drop the future, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    assert_eq!(result, None);
+
+    let error = shared_error_slot.try_get_error();
+    assert!(
+        matches!(error, None),
+        "unexpected connection error: {:?}",
+        error
+    );
+
+    assert!(!client_tx.is_closed());
+    assert!(!peer_inbound_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_future_drop() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // now_or_never implicitly drops the connection future.
+    let result = connection.now_or_never();
+    assert_eq!(result, None);
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(client_tx.is_closed());
+    assert!(peer_inbound_tx.is_closed());
+
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_client_close() {
+    zebra_test::init();
+
+    let (mut client_tx, client_rx) = mpsc::channel(1);
+
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // Explicitly close the client channel.
+    client_tx.close_channel();
+
+    // If we drop the future, the connection will close anyway, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    assert_eq!(result, Some(()));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(client_tx.is_closed());
+    assert!(peer_inbound_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_client_drop() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // Drop the client channel.
+    std::mem::drop(client_tx);
+
+    // If we drop the future, the connection will close anyway, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    assert_eq!(result, Some(()));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(peer_inbound_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_inbound_close() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    let (mut peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // Explicitly close the inbound peer channel.
+    peer_inbound_tx.close_channel();
+
+    // If we drop the future, the connection will close anyway, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    assert_eq!(result, Some(()));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(client_tx.is_closed());
+    assert!(peer_inbound_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_inbound_drop() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    let connection = Connection {
+        state: State::AwaitingRequest,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // Drop the inbound peer channel.
+    std::mem::drop(peer_inbound_tx);
+
+    // If we drop the future, the connection will close anyway, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    assert_eq!(result, Some(()));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(client_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
+
+#[tokio::test]
+async fn connection_run_loop_failed() {
+    zebra_test::init();
+
+    let (client_tx, client_rx) = mpsc::channel(1);
+
+    let (peer_inbound_tx, peer_inbound_rx) = mpsc::channel(1);
+
+    let mut peer_outbound_bytes = Vec::<u8>::new();
+    let peer_outbound_tx = FramedWrite::new(
+        &mut peer_outbound_bytes,
+        Codec::builder()
+            .for_network(Network::Mainnet)
+            .with_metrics_addr_label("test".into())
+            .finish(),
+    );
+
+    let unused_inbound_service =
+        service_fn(|_| async { unreachable!("inbound service should never be called") });
+
+    let shared_error_slot = ErrorSlot::default();
+
+    // Simulate an internal connection error.
+    shared_error_slot
+        .try_update_error(PeerError::ClientRequestTimeout.into())
+        .expect("unexpected previous error in tests");
+
+    let connection = Connection {
+        state: State::Failed,
+        request_timer: None,
+        svc: unused_inbound_service,
+        client_rx: ClientRequestReceiver::from(client_rx),
+        error_slot: shared_error_slot.clone(),
+        peer_tx: peer_outbound_tx,
+        connection_tracker: ActiveConnectionCounter::new_counter().track_connection(),
+        metrics_label: "test".to_string(),
+        last_metrics_state: None,
+    };
+
+    let connection = connection.run(peer_inbound_rx);
+
+    // If we drop the future, the connection will close anyway, so we avoid the drop by cloning it.
+    let connection = connection.shared();
+    let connection_guard = connection.clone();
+    let result = connection.now_or_never();
+    // Because the peer error mutex is a sync mutex,
+    // the connection can't exit until it reaches the outer async loop.
+    assert_eq!(result, Some(()));
+
+    let error = shared_error_slot.try_get_error();
+    assert!(matches!(error, Some(_)));
+
+    assert!(client_tx.is_closed());
+    assert!(peer_inbound_tx.is_closed());
+
+    // We need to drop the future, because it holds a mutable reference to the bytes.
+    std::mem::drop(connection_guard);
+    assert_eq!(peer_outbound_bytes, Vec::<u8>::new());
+}
diff --git a/zebra-network/src/peer/error.rs b/zebra-network/src/peer/error.rs
index 2f4743b1a..21053660e 100644
--- a/zebra-network/src/peer/error.rs
+++ b/zebra-network/src/peer/error.rs
@@ -33,6 +33,14 @@ pub enum PeerError {
     #[error("Internal connection dropped")]
     ConnectionDropped,
 
+    /// Zebra dropped the [`Client`].
+    #[error("Internal client dropped")]
+    ClientDropped,
+
+    /// Zebra's internal heartbeat task exited.
+    #[error("Internal heartbeat task exited")]
+    HeartbeatTaskExited,
+
     /// The remote peer did not respond to a [`peer::Client`] request in time.
     #[error("Client request timed out")]
     ClientRequestTimeout,
@@ -62,6 +70,8 @@ impl PeerError {
         match self {
             PeerError::ConnectionClosed => "ConnectionClosed".into(),
             PeerError::ConnectionDropped => "ConnectionDropped".into(),
+            PeerError::ClientDropped => "ClientDropped".into(),
+            PeerError::HeartbeatTaskExited => "HeartbeatTaskExited".into(),
             PeerError::ClientRequestTimeout => "ClientRequestTimeout".into(),
             // TODO: add error kinds or summaries to `SerializationError`
             PeerError::Serialization(inner) => format!("Serialization({})", inner).into(),
@@ -129,7 +139,7 @@ impl ErrorSlot {
     }
 }
 
-/// Error used when the `ErrorSlot` already contains an error.
+/// Error returned when the `ErrorSlot` already contains an error.
 #[derive(Clone, Debug)]
 pub struct AlreadyErrored {
     /// The original error in the error slot.
diff --git a/zebra-network/src/peer/handshake.rs b/zebra-network/src/peer/handshake.rs
index 17d784547..337b918aa 100644
--- a/zebra-network/src/peer/handshake.rs
+++ b/zebra-network/src/peer/handshake.rs
@@ -789,12 +789,12 @@ where
             // in this block, see constants.rs for more.
             let (server_tx, server_rx) = mpsc::channel(0);
             let (shutdown_tx, shutdown_rx) = oneshot::channel();
-            let slot = ErrorSlot::default();
+            let error_slot = ErrorSlot::default();
 
             let client = Client {
                 shutdown_tx: Some(shutdown_tx),
                 server_tx: server_tx.clone(),
-                error_slot: slot.clone(),
+                error_slot: error_slot.clone(),
                 version: remote_version,
             };
 
@@ -921,7 +921,7 @@ where
                 request_timer: None,
                 svc: inbound_service,
                 client_rx: server_rx.into(),
-                error_slot: slot,
+                error_slot,
                 peer_tx,
                 connection_tracker,
                 metrics_label: connected_addr.get_transient_addr_label(),
diff --git a/zebra-network/src/peer_set/set.rs b/zebra-network/src/peer_set/set.rs
index 9735be21a..6f6641a28 100644
--- a/zebra-network/src/peer_set/set.rs
+++ b/zebra-network/src/peer_set/set.rs
@@ -433,6 +433,14 @@ where
                         "service was canceled, dropping service"
                     );
                 }
+                Poll::Ready(Some(Err((key, UnreadyError::CancelHandleDropped(_))))) => {
+                    // Similarly, services with dropped cancel handes can have duplicates.
+                    trace!(
+                        ?key,
+                        duplicate_connection = self.cancel_handles.contains_key(&key),
+                        "cancel handle was dropped, dropping service"
+                    );
+                }
 
                 // Unready -> Errored
                 Poll::Ready(Some(Err((key, UnreadyError::Inner(error))))) => {
diff --git a/zebra-network/src/peer_set/unready_service.rs b/zebra-network/src/peer_set/unready_service.rs
index 4881dcd84..97fc8d7e0 100644
--- a/zebra-network/src/peer_set/unready_service.rs
+++ b/zebra-network/src/peer_set/unready_service.rs
@@ -12,6 +12,9 @@ use tower::Service;
 
 use crate::peer_set::set::CancelClientWork;
 
+#[cfg(test)]
+mod tests;
+
 /// A Future that becomes satisfied when an `S`-typed service is ready.
 ///
 /// May fail due to cancellation, i.e. if the service is removed from discovery.
@@ -26,9 +29,11 @@ pub(super) struct UnreadyService<K, S, Req> {
     pub(super) _req: PhantomData<Req>,
 }
 
+#[derive(Debug, Eq, PartialEq)]
 pub(super) enum Error<E> {
     Inner(E),
     Canceled,
+    CancelHandleDropped(oneshot::Canceled),
 }
 
 impl<K, S: Service<Req>, Req> Future for UnreadyService<K, S, Req> {
@@ -37,12 +42,22 @@ impl<K, S: Service<Req>, Req> Future for UnreadyService<K, S, Req> {
     fn poll(self: Pin<&mut Self>, cx: &mut Context<'_>) -> Poll<Self::Output> {
         let this = self.project();
 
-        if let Poll::Ready(Ok(CancelClientWork)) = this.cancel.poll(cx) {
+        if let Poll::Ready(oneshot_result) = this.cancel.poll(cx) {
             let key = this.key.take().expect("polled after ready");
-            return Poll::Ready(Err((key, Error::Canceled)));
+
+            // # Correctness
+            //
+            // Return an error if the service is explicitly canceled,
+            // or its cancel handle is dropped, implicitly cancelling it.
+            match oneshot_result {
+                Ok(CancelClientWork) => return Poll::Ready(Err((key, Error::Canceled))),
+                Err(canceled_error) => {
+                    return Poll::Ready(Err((key, Error::CancelHandleDropped(canceled_error))))
+                }
+            }
         }
 
-        // CORRECTNESS
+        // # Correctness
         //
         // The current task must be scheduled for wakeup every time we return
         // `Poll::Pending`.
@@ -54,7 +69,7 @@ impl<K, S: Service<Req>, Req> Future for UnreadyService<K, S, Req> {
         let res = ready!(this
             .service
             .as_mut()
-            .expect("poll after ready")
+            .expect("polled after ready")
             .poll_ready(cx));
 
         let key = this.key.take().expect("polled after ready");
diff --git a/zebra-network/src/peer_set/unready_service/tests.rs b/zebra-network/src/peer_set/unready_service/tests.rs
new file mode 100644
index 000000000..19e513250
--- /dev/null
+++ b/zebra-network/src/peer_set/unready_service/tests.rs
@@ -0,0 +1,3 @@
+//! Tests for unready services.
+
+mod vectors;
diff --git a/zebra-network/src/peer_set/unready_service/tests/vectors.rs b/zebra-network/src/peer_set/unready_service/tests/vectors.rs
new file mode 100644
index 000000000..7d89882d7
--- /dev/null
+++ b/zebra-network/src/peer_set/unready_service/tests/vectors.rs
@@ -0,0 +1,86 @@
+//! Fixed test vectors for unready services.
+//!
+//! TODO: test that inner service errors are handled correctly (#3204)
+
+use std::marker::PhantomData;
+
+use futures::channel::oneshot;
+
+use zebra_test::mock_service::MockService;
+
+use crate::{
+    peer_set::{
+        set::CancelClientWork,
+        unready_service::{Error, UnreadyService},
+    },
+    Request, Response, SharedPeerError,
+};
+
+#[derive(Copy, Clone, Debug, PartialEq, Eq, Hash)]
+struct MockKey;
+
+#[tokio::test]
+async fn unready_service_result_ok() {
+    zebra_test::init();
+
+    let (_cancel_sender, cancel) = oneshot::channel();
+
+    let mock_client: MockService<Request, Response, _, Error<SharedPeerError>> =
+        MockService::build().for_unit_tests();
+    let unready_service = UnreadyService {
+        key: Some(MockKey),
+        cancel,
+        service: Some(mock_client),
+        _req: PhantomData::default(),
+    };
+
+    let result = unready_service.await;
+    assert!(matches!(result, Ok((MockKey, MockService { .. }))));
+}
+
+#[tokio::test]
+async fn unready_service_result_canceled() {
+    zebra_test::init();
+
+    let (cancel_sender, cancel) = oneshot::channel();
+
+    let mock_client: MockService<Request, Response, _, Error<SharedPeerError>> =
+        MockService::build().for_unit_tests();
+    let unready_service = UnreadyService {
+        key: Some(MockKey),
+        cancel,
+        service: Some(mock_client),
+        _req: PhantomData::default(),
+    };
+
+    cancel_sender
+        .send(CancelClientWork)
+        .expect("unexpected oneshot send failure in tests");
+
+    let result = unready_service.await;
+    assert!(matches!(result, Err((MockKey, Error::Canceled))));
+}
+
+#[tokio::test]
+async fn unready_service_result_cancel_handle_dropped() {
+    zebra_test::init();
+
+    let (cancel_sender, cancel) = oneshot::channel();
+
+    let mock_client: MockService<Request, Response, _, Error<SharedPeerError>> =
+        MockService::build().for_unit_tests();
+    let unready_service = UnreadyService {
+        key: Some(MockKey),
+        cancel,
+        service: Some(mock_client),
+        _req: PhantomData::default(),
+    };
+
+    std::mem::drop(cancel_sender);
+
+    let result = unready_service.await;
+    assert!(matches!(
+        result,
+        Err((MockKey, Error::CancelHandleDropped(_)))
+    ));
+}