diff --git a/changelog/1323.bugfix.rst b/changelog/1323.bugfix.rst
new file mode 100644
index 00000000..0833ae31
--- /dev/null
+++ b/changelog/1323.bugfix.rst
@@ -0,0 +1 @@
+Fix hang with `--dist=loadgroup` if a crashed worker is replaced.
diff --git a/src/xdist/scheduler/loadscope.py b/src/xdist/scheduler/loadscope.py
index 73162dcd..695a4d45 100644
--- a/src/xdist/scheduler/loadscope.py
+++ b/src/xdist/scheduler/loadscope.py
@@ -196,8 +196,10 @@ def remove_node(self, node: WorkerController) -> str | None:
                 "Unable to identify crashitem on a workload with pending items"
             )
 
-        # Made uncompleted work unit available again
-        self.workqueue.update(workload)
+        # Make uncompleted work units available again
+        for scope, work_unit in workload.items():
+            if any(not completed for completed in work_unit.values()):
+                self.workqueue[scope] = work_unit
 
         for node in self.assigned_work:
             self._reschedule(node)
@@ -278,6 +280,12 @@ def _assign_work_unit(self, node: WorkerController) -> None:
             for nodeid, completed in work_unit.items()
             if not completed
         ]
+        if not nodeids_indexes:
+            # Raise since this is an internal error that may result in a hanging worker
+            # See #1323
+            raise RuntimeError(
+                "Trying to assign a work unit with no pending items to a node"
+            )
 
         node.send_runtest_some(nodeids_indexes)
 
diff --git a/testing/acceptance_test.py b/testing/acceptance_test.py
index 1b44985d..cdc8b8fe 100644
--- a/testing/acceptance_test.py
+++ b/testing/acceptance_test.py
@@ -974,6 +974,27 @@ def test_b(): pass
             ]
         )
 
+    def test_loadgroup_does_not_hang_after_restart(
+        self, pytester: pytest.Pytester
+    ) -> None:
+        """Fix test suite never finishing in case a worker has to be restarted
+        after having already finished a test (#1323)."""
+        f = pytester.makepyfile(
+            """
+            import os
+            def test_a(): pass
+            def test_b(): os._exit(1)
+        """
+        )
+        res = pytester.runpytest(f, "-n1", "--dist=loadgroup")
+        res.stdout.fnmatch_lines(
+            [
+                "replacing crashed worker gw*",
+                "worker*crashed while running*",
+                "*5 failed*1 passed*",
+            ]
+        )
+
     def test_max_worker_restart(self, pytester: pytest.Pytester) -> None:
         f = pytester.makepyfile(
             """