diff --git a/Documentation/grpc-metadata.md b/Documentation/grpc-metadata.md
index b387e880..928f5572 100644
--- a/Documentation/grpc-metadata.md
+++ b/Documentation/grpc-metadata.md
@@ -70,7 +70,8 @@ Metadata can be retrieved from context using `FromContext`:
 
 ```go
 func (s *server) SomeRPC(ctx context.Context, in *pb.SomeRequest) (*pb.SomeResponse, err) {
-    md := metadata.FromContext(ctx)
+    md, ok := metadata.FromContext(ctx)
+    // do something with metadata
 }
 ```
 
diff --git a/test/end2end_test.go b/test/end2end_test.go
index 99f48f63..acfb3828 100644
--- a/test/end2end_test.go
+++ b/test/end2end_test.go
@@ -1598,6 +1598,61 @@ func testExceedMaxStreamsLimit(t *testing.T, e env) {
 	}
 }
 
+func TestStreamsQuotaRecovery(t *testing.T) {
+	defer leakCheck(t)()
+	for _, e := range listTestEnv() {
+		testStreamsQuotaRecovery(t, e)
+	}
+}
+
+func testStreamsQuotaRecovery(t *testing.T, e env) {
+	te := newTest(t, e)
+	te.declareLogNoise(
+		"http2Client.notifyError got notified that the client transport was broken",
+		"Conn.resetTransport failed to create client transport",
+		"grpc: the client connection is closing",
+	)
+	te.maxStream = 1 // Allows 1 live stream.
+	te.startServer()
+	defer te.tearDown()
+
+	cc := te.clientConn()
+	tc := testpb.NewTestServiceClient(cc)
+	ctx, cancel := context.WithCancel(context.Background())
+	if _, err := tc.StreamingInputCall(ctx); err != nil {
+		t.Fatalf("%v.StreamingInputCall(_) = _, %v, want _, <nil>", tc, err)
+	}
+	// Loop until the new max stream setting is effective.
+	for {
+		ctx, cancel := context.WithTimeout(context.Background(), time.Second)
+		defer cancel()
+		_, err := tc.StreamingInputCall(ctx)
+		if err == nil {
+			time.Sleep(time.Second)
+			continue
+		}
+		if grpc.Code(err) == codes.DeadlineExceeded {
+			break
+		}
+		t.Fatalf("%v.StreamingInputCall(_) = _, %v, want _, %d", tc, err, codes.DeadlineExceeded)
+	}
+	cancel()
+
+	var wg sync.WaitGroup
+	for i := 0; i < 100; i++ {
+		wg.Add(1)
+		go func() {
+			defer wg.Done()
+			ctx, cancel := context.WithCancel(context.Background())
+			if _, err := tc.StreamingInputCall(ctx); err != nil {
+				t.Errorf("%v.StreamingInputCall(_) = _, %v, want _, <nil>", tc, err)
+			}
+			cancel()
+		}()
+	}
+	wg.Wait()
+}
+
 func TestCompressServerHasNoSupport(t *testing.T) {
 	defer leakCheck(t)()
 	for _, e := range listTestEnv() {
diff --git a/transport/http2_client.go b/transport/http2_client.go
index 4027614b..10004e4d 100644
--- a/transport/http2_client.go
+++ b/transport/http2_client.go
@@ -293,7 +293,10 @@ func (t *http2Client) NewStream(ctx context.Context, callHdr *CallHdr) (_ *Strea
 		}
 	}
 	if _, err := wait(ctx, t.shutdownChan, t.writableChan); err != nil {
-		// t.streamsQuota will be updated when t.CloseStream is invoked.
+		// Return the quota back now because there is no stream returned to the caller.
+		if _, ok := err.(StreamError); ok && checkStreamsQuota {
+			t.streamsQuota.add(1)
+		}
 		return nil, err
 	}
 	t.mu.Lock()