diff --git a/core/shared/src/main/scala/fs2/Stream.scala b/core/shared/src/main/scala/fs2/Stream.scala
index 9f6faad245..9fd98ef5c4 100644
--- a/core/shared/src/main/scala/fs2/Stream.scala
+++ b/core/shared/src/main/scala/fs2/Stream.scala
@@ -1477,7 +1477,11 @@ final class Stream[+F[_], +O] private[fs2] (private[fs2] val underlying: Pull[F,
         }
 
         def endSupply(result: Either[Throwable, Unit]): F2[Unit] =
-          buffer.update(_.copy(endOfSupply = Some(result))) *> supply.releaseN(Int.MaxValue)
+          buffer.update(_.copy(endOfSupply = Some(result))) *> supply.releaseN(
+            // enough supply for 2 iterations of the race loop in case of upstream
+            // interruption: so that downstream can terminate immediately
+            outputLong * 2
+          )
 
         def endDemand(result: Either[Throwable, Unit]): F2[Unit] =
           buffer.update(_.copy(endOfDemand = Some(result))) *> demand.releaseN(Int.MaxValue)
diff --git a/core/shared/src/test/scala/fs2/StreamCombinatorsSuite.scala b/core/shared/src/test/scala/fs2/StreamCombinatorsSuite.scala
index fb49f21339..3bf473d795 100644
--- a/core/shared/src/test/scala/fs2/StreamCombinatorsSuite.scala
+++ b/core/shared/src/test/scala/fs2/StreamCombinatorsSuite.scala
@@ -23,7 +23,7 @@ package fs2
 
 import cats.effect.kernel.Deferred
 import cats.effect.kernel.Ref
-import cats.effect.std.{Semaphore, Queue}
+import cats.effect.std.{Queue, Semaphore}
 import cats.effect.testkit.TestControl
 import cats.effect.{IO, SyncIO}
 import cats.syntax.all._
@@ -34,6 +34,7 @@ import org.scalacheck.Prop.forAll
 
 import scala.concurrent.duration._
 import scala.concurrent.TimeoutException
+import scala.util.control.NoStackTrace
 
 class StreamCombinatorsSuite extends Fs2Suite {
   override def munitIOTimeout = 1.minute
@@ -834,6 +835,74 @@ class StreamCombinatorsSuite extends Fs2Suite {
         )
         .assertEquals(0.millis)
     }
+
+    test("upstream failures are propagated downstream") {
+      TestControl.executeEmbed {
+        case object SevenNotAllowed extends NoStackTrace
+
+        val source = Stream
+          .iterate(0)(_ + 1)
+          .covary[IO]
+          .evalTap(n => IO.raiseError(SevenNotAllowed).whenA(n == 7))
+
+        val downstream = source.groupWithin(100, 2.seconds).map(_.toList)
+
+        val expected = List(List(1, 2, 3, 4, 5, 6))
+
+        downstream.assertEmits(expected).intercept[SevenNotAllowed.type]
+      }
+    }
+
+    test(
+      "upstream interruption causes immediate downstream termination with all elements being emitted"
+    ) {
+
+      val sourceTimeout = 5.5.seconds
+      val downstreamTimeout = sourceTimeout + 2.seconds
+
+      TestControl
+        .executeEmbed {
+          val source: Stream[IO, Int] =
+            Stream
+              .iterate(0)(_ + 1)
+              .covary[IO]
+              .meteredStartImmediately(1.second)
+              .interruptAfter(sourceTimeout)
+
+          // large chunkSize and timeout (no emissions expected in the window
+          // specified, unless source ends, due to interruption or
+          // natural termination (i.e runs out of elements)
+          val downstream: Stream[IO, Chunk[Int]] =
+            source.groupWithin(Int.MaxValue, 1.day)
+
+          downstream.compile.lastOrError
+            .timeout(downstreamTimeout)
+            .map(_.toList)
+            .timed
+        }
+        .assertEquals(
+          // downstream ended immediately (i.e timeLapsed = sourceTimeout)
+          // emitting whatever was accumulated at the time of interruption
+          (sourceTimeout, List(0, 1, 2, 3, 4, 5))
+        )
+    }
+
+    test("stress test: all elements are processed") {
+      val rangeLength = 10000
+
+      Stream
+        .eval(Ref.of[IO, Int](0))
+        .flatMap { counter =>
+          Stream
+            .range(0, rangeLength)
+            .covary[IO]
+            .groupWithin(4096, 100.micros)
+            .evalTap(ch => counter.update(_ + ch.size)) *> Stream.eval(counter.get)
+        }
+        .compile
+        .lastOrError
+        .assertEquals(rangeLength)
+    }
   }
 
   property("head")(forAll((s: Stream[Pure, Int]) => assertEquals(s.head.toList, s.toList.take(1))))