diff --git a/Sources/NIOCore/AsyncSequences/NIOAsyncSequenceProducerStrategies.swift b/Sources/NIOCore/AsyncSequences/NIOAsyncSequenceProducerStrategies.swift
index 5fe444b9bd..6de186197c 100644
--- a/Sources/NIOCore/AsyncSequences/NIOAsyncSequenceProducerStrategies.swift
+++ b/Sources/NIOCore/AsyncSequences/NIOAsyncSequenceProducerStrategies.swift
@@ -22,6 +22,7 @@ public enum NIOAsyncSequenceProducerBackPressureStrategies {
     public struct HighLowWatermark: NIOAsyncSequenceProducerBackPressureStrategy {
         private let lowWatermark: Int
         private let highWatermark: Int
+        private var hasOustandingDemand: Bool = true
 
         /// Initializes a new ``NIOAsyncSequenceProducerBackPressureStrategies/HighLowWatermark``.
         ///
@@ -36,12 +37,29 @@ public enum NIOAsyncSequenceProducerBackPressureStrategies {
 
         public mutating func didYield(bufferDepth: Int) -> Bool {
             // We are demanding more until we reach the high watermark
-            bufferDepth < self.highWatermark
+            if bufferDepth < self.highWatermark {
+                precondition(self.hasOustandingDemand)
+                return true
+            } else {
+                self.hasOustandingDemand = false
+                return false
+            }
         }
 
         public mutating func didConsume(bufferDepth: Int) -> Bool {
             // We start demanding again once we are below the low watermark
-            bufferDepth < self.lowWatermark
+            if bufferDepth < self.lowWatermark {
+                if self.hasOustandingDemand {
+                    // We are below and have outstanding demand
+                    return true
+                } else {
+                    // We are below but don't have outstanding demand but need more
+                    self.hasOustandingDemand = true
+                    return true
+                }
+            } else {
+                return self.hasOustandingDemand
+            }
         }
     }
 }
diff --git a/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceProducer+HighLowWatermarkBackPressureStrategyTests.swift b/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceProducer+HighLowWatermarkBackPressureStrategyTests.swift
index 3506dc9ce8..f7a6790ecf 100644
--- a/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceProducer+HighLowWatermarkBackPressureStrategyTests.swift
+++ b/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceProducer+HighLowWatermarkBackPressureStrategyTests.swift
@@ -51,10 +51,10 @@ final class NIOAsyncSequenceProducerBackPressureStrategiesHighLowWatermarkTests:
     }
 
     func testDidConsume_whenAboveLowWatermark() {
-        XCTAssertFalse(self.strategy.didConsume(bufferDepth: 6))
+        XCTAssertTrue(self.strategy.didConsume(bufferDepth: 6))
     }
 
     func testDidConsume_whenAtLowWatermark() {
-        XCTAssertFalse(self.strategy.didConsume(bufferDepth: 5))
+        XCTAssertTrue(self.strategy.didConsume(bufferDepth: 5))
     }
 }
diff --git a/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceTests.swift b/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceTests.swift
index 3720976224..7a7583f59e 100644
--- a/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceTests.swift
+++ b/Tests/NIOCoreTests/AsyncSequences/NIOAsyncSequenceTests.swift
@@ -149,6 +149,42 @@ final class NIOAsyncSequenceProducerTests: XCTestCase {
         XCTAssertEqual(self.source.yield(contentsOf: [7, 8, 9, 10, 11]), .stopProducing)
     }
 
+    func testWatermarkBackpressure_whenBelowLowwatermark_andOutstandingDemand() async {
+        let newSequence = NIOAsyncSequenceProducer.makeSequence(
+            elementType: Int.self,
+            backPressureStrategy: NIOAsyncSequenceProducerBackPressureStrategies.HighLowWatermark(
+                lowWatermark: 2,
+                highWatermark: 5
+            ),
+            finishOnDeinit: false,
+            delegate: self.delegate
+        )
+        let iterator = newSequence.sequence.makeAsyncIterator()
+        var eventsIterator = self.delegate.events.makeAsyncIterator()
+        let source = newSequence.source
+
+        XCTAssertEqual(source.yield(1), .produceMore)
+        XCTAssertEqual(source.yield(2), .produceMore)
+        XCTAssertEqual(source.yield(3), .produceMore)
+        XCTAssertEqual(source.yield(4), .produceMore)
+        XCTAssertEqual(source.yield(5), .stopProducing)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 1)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 2)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 3)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 4)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 5)
+        XCTAssertEqualWithoutAutoclosure(await eventsIterator.next(), .produceMore)
+        XCTAssertEqual(source.yield(6), .produceMore)
+        XCTAssertEqual(source.yield(7), .produceMore)
+        XCTAssertEqual(source.yield(8), .produceMore)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 6)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 7)
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), 8)
+        source.finish()
+        XCTAssertEqualWithoutAutoclosure(await iterator.next(), nil)
+        XCTAssertEqualWithoutAutoclosure(await eventsIterator.next(), .didTerminate)
+    }
+
     // MARK: - Yield
 
     func testYield_whenInitial_andStopDemanding() async {