diff --git a/servicetalk-tcp-netty-internal/src/main/java/io/servicetalk/tcp/netty/internal/TcpConnector.java b/servicetalk-tcp-netty-internal/src/main/java/io/servicetalk/tcp/netty/internal/TcpConnector.java
index 709b12a942..97776f84ba 100644
--- a/servicetalk-tcp-netty-internal/src/main/java/io/servicetalk/tcp/netty/internal/TcpConnector.java
+++ b/servicetalk-tcp-netty-internal/src/main/java/io/servicetalk/tcp/netty/internal/TcpConnector.java
@@ -32,7 +32,10 @@
 import io.netty.channel.Channel;
 import io.netty.channel.ChannelFuture;
 import io.netty.channel.ChannelHandler;
+import io.netty.channel.ChannelHandlerContext;
 import io.netty.channel.ChannelOption;
+import io.netty.channel.ChannelOutboundHandlerAdapter;
+import io.netty.channel.ChannelPromise;
 import io.netty.channel.ConnectTimeoutException;
 import io.netty.channel.EventLoop;
 import io.netty.resolver.AbstractAddressResolver;
@@ -112,24 +115,6 @@ protected void handleSubscribe(final Subscriber<? super C> subscriber) {
                     Future<?> connectFuture = connect0(localAddress, resolvedRemoteAddress, config, autoRead,
                             executionContext, connectHandler);
                     connectHandler.connectFuture(connectFuture);
-                    connectFuture.addListener(f -> {
-                        Throwable cause = f.cause();
-                        if (cause != null) {
-                            if (cause instanceof ConnectTimeoutException) {
-                                String msg = resolvedRemoteAddress instanceof FileDescriptorSocketAddress ?
-                                        "Failed to register: " + resolvedRemoteAddress :
-                                        "Failed to connect: " + resolvedRemoteAddress + " (localAddress: " +
-                                        localAddress + ")";
-                                cause = new io.servicetalk.client.api.ConnectTimeoutException(msg, cause);
-                            } else if (cause instanceof ConnectException) {
-                                cause = new RetryableConnectException((ConnectException) cause);
-                            }
-                            if (f instanceof ChannelFuture) {
-                                assignConnectionError(((ChannelFuture) f).channel(), cause);
-                            }
-                            connectHandler.connectFailed(cause);
-                        }
-                    });
                 } catch (Throwable t) {
                     connectHandler.unexpectedFailure(t);
                 }
@@ -140,13 +125,44 @@ protected void handleSubscribe(final Subscriber<? super C> subscriber) {
     private static Future<?> connect0(@Nullable SocketAddress localAddress, Object resolvedRemoteAddress,
                                       ReadOnlyTcpClientConfig config, boolean autoRead,
                                       ExecutionContext<?> executionContext,
-                                      Consumer<? super Channel> subscriber) {
+                                      ConnectHandler<?> connectHandler) {
         // Create the handler here and ensure in connectWithBootstrap / initFileDescriptorBasedChannel it is added
         // to the ChannelPipeline after registration is complete as otherwise we may miss channelActive events.
         ChannelHandler handler = new io.netty.channel.ChannelInitializer<Channel>() {
             @Override
             protected void initChannel(Channel channel) {
-                subscriber.accept(channel);
+                // We need to intercept the `connect` call in the pipeline and add our listener because right after the
+                // pipeline finishes its `connect(..)` sequence the netty Bootstrap will add the `CLOSE_ON_FAILURE`
+                // listener to the connect future. That will close the channel and complete the close future before we
+                // can call the `ChannelCloseUtils.assignConnectionError` helpers and can cause us to miss the reason
+                // for the channel closing.
+                channel.pipeline().addLast(new ChannelOutboundHandlerAdapter() {
+                    @Override
+                    public void connect(ChannelHandlerContext ctx, SocketAddress remoteAddress,
+                                        SocketAddress localAddress, ChannelPromise promise) throws Exception {
+                        ctx.pipeline().remove(this);
+                        promise.addListener(f -> {
+                            Throwable cause = f.cause();
+                            if (cause != null) {
+                                if (cause instanceof ConnectTimeoutException) {
+                                    String msg = resolvedRemoteAddress instanceof FileDescriptorSocketAddress ?
+                                            "Failed to register: " + resolvedRemoteAddress :
+                                            "Failed to connect: " + resolvedRemoteAddress + " (localAddress: " +
+                                                    localAddress + ")";
+                                    cause = new io.servicetalk.client.api.ConnectTimeoutException(msg, cause);
+                                } else if (cause instanceof ConnectException) {
+                                    cause = new RetryableConnectException((ConnectException) cause);
+                                }
+                                if (f instanceof ChannelFuture) {
+                                    assignConnectionError(((ChannelFuture) f).channel(), cause);
+                                }
+                                connectHandler.connectFailed(cause);
+                            }
+                        });
+                        super.connect(ctx, remoteAddress, localAddress, promise);
+                    }
+                });
+                connectHandler.accept(channel);
             }
         };
 
diff --git a/servicetalk-tcp-netty-internal/src/test/java/io/servicetalk/tcp/netty/internal/AbstractTcpServerTest.java b/servicetalk-tcp-netty-internal/src/test/java/io/servicetalk/tcp/netty/internal/AbstractTcpServerTest.java
index b0b4cff10a..66990e4497 100644
--- a/servicetalk-tcp-netty-internal/src/test/java/io/servicetalk/tcp/netty/internal/AbstractTcpServerTest.java
+++ b/servicetalk-tcp-netty-internal/src/test/java/io/servicetalk/tcp/netty/internal/AbstractTcpServerTest.java
@@ -84,7 +84,6 @@ void setUp() throws Exception {
         client = createClient();
     }
 
-    // Visible for overriding.
     private TcpClient createClient() {
         return new TcpClient(getTcpClientConfig(), getClientTransportObserver());
     }