diff --git a/testsuite/devserver.go b/testsuite/devserver.go
index 8b922a66f..ba10b5e7e 100644
--- a/testsuite/devserver.go
+++ b/testsuite/devserver.go
@@ -339,9 +339,9 @@ func extractZip(r io.Reader, toExtract string, w io.Writer) error {
 // Returns a connected client created using the provided options.
 func waitServerReady(ctx context.Context, options client.Options) (client.Client, error) {
 	var returnedClient client.Client
-	lastErr := retryFor(600, 100*time.Millisecond, func() error {
+	lastErr := retryFor(ctx, 600, 100*time.Millisecond, func() error {
 		var err error
-		returnedClient, err = client.Dial(options)
+		returnedClient, err = client.DialContext(ctx, options)
 		return err
 	})
 	if lastErr != nil {
@@ -351,7 +351,7 @@ func waitServerReady(ctx context.Context, options client.Options) (client.Client
 }
 
 // retryFor retries some function until it returns nil or runs out of attempts. Wait interval between attempts.
-func retryFor(maxAttempts int, interval time.Duration, cond func() error) error {
+func retryFor(ctx context.Context, maxAttempts int, interval time.Duration, cond func() error) error {
 	if maxAttempts < 1 {
 		// this is used internally, okay to panic
 		panic("maxAttempts should be at least 1")
@@ -363,7 +363,12 @@ func retryFor(maxAttempts int, interval time.Duration, cond func() error) error
 		} else {
 			lastErr = curE
 		}
-		time.Sleep(interval)
+		select {
+		case <-ctx.Done():
+			return ctx.Err()
+		case <-time.After(interval):
+			// Try again.
+		}
 	}
 	return lastErr
 }
diff --git a/testsuite/devserver_internal_test.go b/testsuite/devserver_internal_test.go
new file mode 100644
index 000000000..92ecfe794
--- /dev/null
+++ b/testsuite/devserver_internal_test.go
@@ -0,0 +1,62 @@
+// The MIT License
+//
+// Copyright (c) 2020 Temporal Technologies Inc.  All rights reserved.
+//
+// Copyright (c) 2020 Uber Technologies, Inc.
+//
+// Permission is hereby granted, free of charge, to any person obtaining a copy
+// of this software and associated documentation files (the "Software"), to deal
+// in the Software without restriction, including without limitation the rights
+// to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
+// copies of the Software, and to permit persons to whom the Software is
+// furnished to do so, subject to the following conditions:
+//
+// The above copyright notice and this permission notice shall be included in
+// all copies or substantial portions of the Software.
+//
+// THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
+// IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
+// FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE
+// AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
+// LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
+// OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN
+// THE SOFTWARE.
+
+package testsuite
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+	"go.temporal.io/sdk/client"
+	"go.temporal.io/sdk/internal/log"
+)
+
+func TestWaitServerReady_respectsTimeout(t *testing.T) {
+	ctx, cancel := context.WithTimeout(context.Background(), time.Millisecond)
+	defer cancel()
+
+	hostPort, err := getFreeHostPort()
+	require.NoError(t, err, "get free host port")
+
+	startTime := time.Now()
+	_, err = waitServerReady(ctx, client.Options{
+		HostPort:  hostPort,
+		Namespace: "default",
+		Logger:    log.NewNopLogger(),
+	})
+	require.Error(t, err, "Dial should fail")
+	assert.ErrorIs(t, err, context.DeadlineExceeded)
+	assert.WithinDuration(t,
+		startTime.Add(time.Millisecond),
+		time.Now(),
+		5*time.Millisecond,
+		// Even though the timeout is only a millisecond,
+		// we'll allow for a slack of up to 5 milliseconds
+		// to account for slow CI machines.
+		// Anything smaller than 1 second is fine to use here.
+	)
+}