diff --git a/packages/react-dom/src/__tests__/ReactDOMFizzServer-test.js b/packages/react-dom/src/__tests__/ReactDOMFizzServer-test.js
index 3381005cf5c23..19fde3c4a6059 100644
--- a/packages/react-dom/src/__tests__/ReactDOMFizzServer-test.js
+++ b/packages/react-dom/src/__tests__/ReactDOMFizzServer-test.js
@@ -103,6 +103,7 @@ describe('ReactDOMFizzServer', () => {
         if (
           node.tagName !== 'SCRIPT' &&
           node.tagName !== 'TEMPLATE' &&
+          node.tagName !== 'template' &&
           !node.hasAttribute('hidden') &&
           !node.hasAttribute('aria-hidden')
         ) {
@@ -153,7 +154,6 @@ describe('ReactDOMFizzServer', () => {
     }
   }
 
-  /*
   function rejectText(text, error) {
     const record = textCache.get(text);
     if (record === undefined) {
@@ -169,7 +169,6 @@ describe('ReactDOMFizzServer', () => {
       thenable.pings.forEach(t => t());
     }
   }
-  */
 
   function readText(text) {
     const record = textCache.get(text);
@@ -800,4 +799,79 @@ describe('ReactDOMFizzServer', () => {
       </div>,
     );
   });
+
+  it('client renders a boundary if it errors before finishing the fallback', async () => {
+    function App({isClient}) {
+      return (
+        <Suspense fallback="Loading root...">
+          <div>
+            <Suspense fallback={<AsyncText text="Loading..." />}>
+              <h1>
+                {isClient ? <Text text="Hello" /> : <AsyncText text="Hello" />}
+              </h1>
+            </Suspense>
+          </div>
+        </Suspense>
+      );
+    }
+
+    const loggedErrors = [];
+    let controls;
+    await act(async () => {
+      controls = ReactDOMFizzServer.pipeToNodeWritable(
+        <App isClient={false} />,
+        writable,
+        {
+          onError(x) {
+            loggedErrors.push(x);
+          },
+        },
+      );
+      controls.startWriting();
+    });
+
+    // We're still showing a fallback.
+
+    // Attempt to hydrate the content.
+    const root = ReactDOM.unstable_createRoot(container, {hydrate: true});
+    root.render(<App isClient={true} />);
+    Scheduler.unstable_flushAll();
+
+    // We're still loading because we're waiting for the server to stream more content.
+    expect(getVisibleChildren(container)).toEqual('Loading root...');
+
+    expect(loggedErrors).toEqual([]);
+
+    const theError = new Error('Test');
+    // Error the content, but we don't have a fallback yet.
+    await act(async () => {
+      rejectText('Hello', theError);
+    });
+
+    expect(loggedErrors).toEqual([theError]);
+
+    // We still can't render it on the client because we haven't unblocked the parent.
+    Scheduler.unstable_flushAll();
+    expect(getVisibleChildren(container)).toEqual('Loading root...');
+
+    // Unblock the loading state
+    await act(async () => {
+      resolveText('Loading...');
+    });
+
+    // Now we're able to show the inner boundary.
+    expect(getVisibleChildren(container)).toEqual(<div>Loading...</div>);
+
+    // That will let us client render it instead.
+    Scheduler.unstable_flushAll();
+
+    // The client rendered HTML is now in place.
+    expect(getVisibleChildren(container)).toEqual(
+      <div>
+        <h1>Hello</h1>
+      </div>,
+    );
+
+    expect(loggedErrors).toEqual([theError]);
+  });
 });
diff --git a/packages/react-server/src/ReactFizzServer.js b/packages/react-server/src/ReactFizzServer.js
index 334d8b38797ad..a27a845f422e7 100644
--- a/packages/react-server/src/ReactFizzServer.js
+++ b/packages/react-server/src/ReactFizzServer.js
@@ -419,17 +419,30 @@ function renderSuspenseBoundary(
     task.blockedSegment = parentSegment;
   }
 
+  // This injects an extra segment just to contain an empty tag with an ID.
+  // This means that we're not actually using the assignID anywhere.
+  // TODO: Rethink the assignID approach.
+  pushEmpty(boundarySegment.chunks, request.responseState, newBoundary.id);
+  const innerSegment = createPendingSegment(
+    request,
+    boundarySegment.chunks.length,
+    null,
+    boundarySegment.formatContext,
+  );
+  boundarySegment.status = COMPLETED;
+  boundarySegment.children.push(innerSegment);
+
   // We create suspended task for the fallback because we don't want to actually work
   // on it yet in case we finish the main content, so we queue for later.
   const suspendedFallbackTask = createTask(
     request,
     fallback,
     parentBoundary,
-    boundarySegment,
+    innerSegment,
     fallbackAbortSet,
     task.legacyContext,
     task.context,
-    newBoundary.id, // This is the ID we want to give this fallback so we can replace it later.
+    null,
   );
   // TODO: This should be queued at a separate lower priority queue so that we only work
   // on preparing fallbacks if we don't have any more main content to task on.