diff --git a/src/mtp_down_conn.erl b/src/mtp_down_conn.erl
index 06e38da..53d0f66 100644
--- a/src/mtp_down_conn.erl
+++ b/src/mtp_down_conn.erl
@@ -33,6 +33,7 @@
 -define(APP, mtproto_proxy).
 -define(CONN_TIMEOUT, 10000).
 -define(SEND_TIMEOUT, 15000).
+-define(HANDSHAKE_TIMEOUT, 8000).
 -define(MAX_SOCK_BUF_SIZE, 1024 * 500).    % Decrease if CPU is cheaper than RAM
 -define(MAX_CODEC_BUFFERS, 5 * 1024 * 1024).
 
@@ -172,8 +173,18 @@ handle_info(do_connect, #state{dc_id = DcId} = State) ->
                  [DcId, lager:pr_stacktrace(Stack, {Class, Reason})]), %XXX lager-specific
             erlang:send_after(300, self(), do_connect),
             {noreply, State}
+    end;
+handle_info(handshake_timeout, #state{stage = Stage, dc_id = DcId} = St) ->
+    case Stage of
+        tunnel ->
+            %% race-condition between deadline timer and actual handshake completion
+            %% (so, handshake completed exactly at deadline time)
+            {noreply, St};
+        _ ->
+            {stop, {downstream_handshake_timeout, DcId, Stage}, St}
     end.
 
+
 terminate(_Reason, #state{upstreams = Ups}) ->
     %% Should I do this or dc_pool? Maybe only when reason is 'normal'?
     ?log(warning, "Downstream terminates with reason ~p; len(upstreams)=~p",
@@ -482,15 +493,16 @@ down_handshake1(S) ->
     Nonce = crypto:strong_rand_bytes(16),
     Schema = 1,                                 %AES
     Msg = mtp_rpc:encode_nonce({nonce, KeySelector, Schema, CryptoTs, Nonce}),
+    Deadline = erlang:send_after(?HANDSHAKE_TIMEOUT, self(), handshake_timeout),
     S1 = S#state{stage = handshake_1,
                  %% Use fake encryption codec
                  codec = mtp_codec:new(mtp_noop_codec, mtp_noop_codec:new(),
                                        mtp_full, mtp_full:new(-2, -2),
                                        false, undefined, ?MAX_CODEC_BUFFERS),
-                 stage_state = {KeySelector, Nonce, CryptoTs, Key}},
+                 stage_state = {Deadline, KeySelector, Nonce, CryptoTs, Key}},
     down_send(Msg, S1).
 
-down_handshake2(Pkt, #state{stage_state = {MyKeySelector, CliNonce, MyTs, Key},
+down_handshake2(Pkt, #state{stage_state = {Deadline, MyKeySelector, CliNonce, MyTs, Key},
                             codec = Codec1,
                             sock = Sock} = S) ->
     {nonce, KeySelector, Schema, _CryptoTs, SrvNonce} = mtp_rpc:decode_nonce(Pkt),
@@ -513,7 +525,7 @@ down_handshake2(Pkt, #state{stage_state = {MyKeySelector, CliNonce, MyTs, Key},
               S#state{codec = Codec,
                       stage = handshake_2,
                       addr_bin = iolist_to_binary(mtp_rpc:encode_ip_port(MyIp, MyPort)),
-                      stage_state = SenderPID}).
+                      stage_state = {Deadline, SenderPID}}).
 
 get_middle_key(#{srv_n := Nonce, clt_n := MyNonce, clt_ts := MyTs, srv_ip := SrvIpBinBig, srv_port := SrvPort,
                  clt_ip := CltIpBinBig, clt_port := CltPort, secret := Secret, purpose := Purpose} = _Args) ->
@@ -540,12 +552,13 @@ get_middle_key(#{srv_n := Nonce, clt_n := MyNonce, clt_ts := MyTs, srv_ip := Srv
     {Key, IV}.
 
 
-down_handshake3(Pkt, #state{stage_state = PrevSenderPid, pool = Pool,
+down_handshake3(Pkt, #state{stage_state = {Deadline, PrevSenderPid}, pool = Pool, dc_id = DcId,
                             netloc = {Addr, Port}} = S) ->
+    erlang:cancel_timer(Deadline),
     {handshake, _SenderPid, PeerPid} = mtp_rpc:decode_handshake(Pkt),
     (PeerPid == PrevSenderPid) orelse error({wrong_sender_pid, PeerPid}),
     ok = mtp_dc_pool:ack_connected(Pool, self()),
-    ?log(info, "~s:~w: handshake complete", [inet:ntoa(Addr), Port]),
+    ?log(info, "~s:~w: dc=~w handshake complete", [inet:ntoa(Addr), Port, DcId]),
     {ok, S#state{stage = tunnel,
                  stage_state = undefined}}.