diff --git a/test/test_distributed.py b/test/test_distributed.py
index 176e0ee84..80fa9f1cc 100644
--- a/test/test_distributed.py
+++ b/test/test_distributed.py
@@ -149,6 +149,14 @@ def _test_fullsync(rank, world_size, backend, q):
         except Exception as e:
             assert isinstance(e, PrefetchTimeoutError)
 
+        # Test that reset/shutdown does not hang while paused
+        dp3 = dp.fullsync()
+        it = iter(dp3)
+        next(it)
+        dp3.pause()
+        it2 = iter(dp3)  # Reset
+        next(it2)
+
         _finalize_distributed_queue(rank, q)
 
     @world_size_parametrize
diff --git a/torchdata/datapipes/iter/util/distributed.py b/torchdata/datapipes/iter/util/distributed.py
index ff534bb98..57ade7040 100644
--- a/torchdata/datapipes/iter/util/distributed.py
+++ b/torchdata/datapipes/iter/util/distributed.py
@@ -114,6 +114,7 @@ def return_next(self):
         return data
 
     def shutdown(self):
+        self._paused = False
         self._executor.shutdown(wait=True)
 
     def pause(self):