diff --git a/subsys/net/lib/sockets/sockets.c b/subsys/net/lib/sockets/sockets.c
index 3a0705266d5f8..8a9b8ce8dfb26 100644
--- a/subsys/net/lib/sockets/sockets.c
+++ b/subsys/net/lib/sockets/sockets.c
@@ -525,10 +525,22 @@ int zsock_connect_ctx(struct net_context *ctx, const struct sockaddr *addr,
 			cb = zsock_connected_cb;
 		}
 
-		SET_ERRNO(net_context_recv(ctx, zsock_received_cb, K_NO_WAIT,
-					   ctx->user_data));
-		SET_ERRNO(net_context_connect(ctx, addr, addrlen, cb, timeout,
-					      ctx->user_data));
+		if (net_context_get_type(ctx) == SOCK_STREAM) {
+			/* For STREAM sockets net_context_recv() only installs
+			 * recv callback w/o side effects, and it has to be done
+			 * first to avoid race condition, when TCP stream data
+			 * arrives right after connect.
+			 */
+			SET_ERRNO(net_context_recv(ctx, zsock_received_cb,
+						   K_NO_WAIT, ctx->user_data));
+			SET_ERRNO(net_context_connect(ctx, addr, addrlen, cb,
+						      timeout, ctx->user_data));
+		} else {
+			SET_ERRNO(net_context_connect(ctx, addr, addrlen, cb,
+						      timeout, ctx->user_data));
+			SET_ERRNO(net_context_recv(ctx, zsock_received_cb,
+						   K_NO_WAIT, ctx->user_data));
+		}
 	}
 
 	return 0;
diff --git a/tests/net/socket/udp/src/main.c b/tests/net/socket/udp/src/main.c
index 11200157c2a42..310f130d5d85f 100644
--- a/tests/net/socket/udp/src/main.c
+++ b/tests/net/socket/udp/src/main.c
@@ -1293,6 +1293,96 @@ ZTEST(net_socket_udp, test_23_v6_dgram_overflow)
 			    BUF_AND_SIZE(test_str_all_tx_bufs));
 }
 
+static void test_dgram_connected(int sock_c, int sock_s1, int sock_s2,
+				 struct sockaddr *addr_c, socklen_t addrlen_c,
+				 struct sockaddr *addr_s1, socklen_t addrlen_s1,
+				 struct sockaddr *addr_s2, socklen_t addrlen_s2)
+{
+	uint8_t tx_buf = 0xab;
+	uint8_t rx_buf;
+	int rv;
+
+	rv = bind(sock_c, addr_c, addrlen_c);
+	zassert_equal(rv, 0, "client bind failed");
+
+	rv = bind(sock_s1, addr_s1, addrlen_s1);
+	zassert_equal(rv, 0, "server bind failed");
+
+	rv = bind(sock_s2, addr_s2, addrlen_s2);
+	zassert_equal(rv, 0, "server bind failed");
+
+	rv = connect(sock_c, addr_s1, addrlen_s1);
+	zassert_equal(rv, 0, "connect failed");
+
+	/* Verify that a datagram can be received from the connected address */
+	rv = sendto(sock_s1, &tx_buf, sizeof(tx_buf), 0, addr_c, addrlen_c);
+	zassert_equal(rv, sizeof(tx_buf), "send failed %d", errno);
+
+	/* Give the packet a chance to go through the net stack */
+	k_msleep(10);
+
+	rx_buf = 0;
+	rv = recv(sock_c, &rx_buf, sizeof(rx_buf), MSG_DONTWAIT);
+	zassert_equal(rv, sizeof(rx_buf), "recv failed");
+	zassert_equal(rx_buf, tx_buf, "wrong data");
+
+	/* Verify that a datagram is not received from other address */
+	rv = sendto(sock_s2, &tx_buf, sizeof(tx_buf), 0, addr_c, addrlen_c);
+	zassert_equal(rv, sizeof(tx_buf), "send failed");
+
+	/* Give the packet a chance to go through the net stack */
+	k_msleep(10);
+
+	rv = recv(sock_c, &rx_buf, sizeof(rx_buf), MSG_DONTWAIT);
+	zassert_equal(rv, -1, "recv should've failed");
+	zassert_equal(errno, EAGAIN, "incorrect errno");
+
+	rv = close(sock_c);
+	zassert_equal(rv, 0, "close failed");
+	rv = close(sock_s1);
+	zassert_equal(rv, 0, "close failed");
+	rv = close(sock_s2);
+	zassert_equal(rv, 0, "close failed");
+}
+
+ZTEST(net_socket_udp, test_24_v4_dgram_connected)
+{
+	int client_sock;
+	int server_sock_1;
+	int server_sock_2;
+	struct sockaddr_in client_addr;
+	struct sockaddr_in server_addr_1;
+	struct sockaddr_in server_addr_2;
+
+	prepare_sock_udp_v4(MY_IPV4_ADDR, CLIENT_PORT, &client_sock, &client_addr);
+	prepare_sock_udp_v4(MY_IPV4_ADDR, SERVER_PORT, &server_sock_1, &server_addr_1);
+	prepare_sock_udp_v4(MY_IPV4_ADDR, SERVER_PORT + 1, &server_sock_2, &server_addr_2);
+
+	test_dgram_connected(client_sock, server_sock_1, server_sock_2,
+			     (struct sockaddr *)&client_addr, sizeof(client_addr),
+			     (struct sockaddr *)&server_addr_1, sizeof(server_addr_1),
+			     (struct sockaddr *)&server_addr_2, sizeof(server_addr_2));
+}
+
+ZTEST(net_socket_udp, test_25_v6_dgram_connected)
+{
+	int client_sock;
+	int server_sock_1;
+	int server_sock_2;
+	struct sockaddr_in6 client_addr;
+	struct sockaddr_in6 server_addr_1;
+	struct sockaddr_in6 server_addr_2;
+
+	prepare_sock_udp_v6(MY_IPV6_ADDR, CLIENT_PORT, &client_sock, &client_addr);
+	prepare_sock_udp_v6(MY_IPV6_ADDR, SERVER_PORT, &server_sock_1, &server_addr_1);
+	prepare_sock_udp_v6(MY_IPV6_ADDR, SERVER_PORT + 1, &server_sock_2, &server_addr_2);
+
+	test_dgram_connected(client_sock, server_sock_1, server_sock_2,
+			     (struct sockaddr *)&client_addr, sizeof(client_addr),
+			     (struct sockaddr *)&server_addr_1, sizeof(server_addr_1),
+			     (struct sockaddr *)&server_addr_2, sizeof(server_addr_2));
+}
+
 static void after(void *arg)
 {
 	ARG_UNUSED(arg);