diff --git a/clientconn.go b/clientconn.go
index c3c7691dc..f6b39e4a6 100644
--- a/clientconn.go
+++ b/clientconn.go
@@ -625,13 +625,18 @@ func (ac *addrConn) transportMonitor() {
 		// the addrConn is idle (i.e., no RPC in flight).
 		case <-ac.shutdownChan:
 			return
-		case <-t.Error():
+		case <-t.Done():
 			ac.mu.Lock()
 			if ac.state == Shutdown {
 				// ac.tearDown(...) has been invoked.
 				ac.mu.Unlock()
 				return
 			}
+			if t.Err() == transport.ErrConnDrain {
+				ac.mu.Unlock()
+				ac.tearDown(errConnDrain)
+				return
+			}
 			ac.state = TransientFailure
 			ac.stateCV.Broadcast()
 			ac.mu.Unlock()
diff --git a/stream.go b/stream.go
index a182e077d..2940cbbd3 100644
--- a/stream.go
+++ b/stream.go
@@ -184,7 +184,7 @@ func NewClientStream(ctx context.Context, desc *StreamDesc, cc *ClientConn, meth
 	// when there is no pending I/O operations on this stream.
 	go func() {
 		select {
-		case <-t.Error():
+		case <-t.Done():
 			// Incur transport error, simply exit.
 		case <-s.Done():
 			// TODO: The trace of the RPC is terminated here when there is no pending
diff --git a/transport/http2_client.go b/transport/http2_client.go
index 4f22be09e..bde77f112 100644
--- a/transport/http2_client.go
+++ b/transport/http2_client.go
@@ -71,6 +71,7 @@ type http2Client struct {
 	shutdownChan chan struct{}
 	// errorChan is closed to notify the I/O error to the caller.
 	errorChan chan struct{}
+	err       error
 
 	framer *framer
 	hBuf   *bytes.Buffer  // the buffer for HPACK encoding
@@ -97,6 +98,7 @@ type http2Client struct {
 	maxStreams int
 	// the per-stream outbound flow control window size set by the peer.
 	streamSendQuota uint32
+	goAwayID        uint32
 }
 
 // newHTTP2Client constructs a connected ClientTransport to addr based on HTTP2
@@ -279,7 +281,7 @@ func (t *http2Client) NewStream(ctx context.Context, callHdr *CallHdr) (_ *Strea
 	checkStreamsQuota := t.streamsQuota != nil
 	t.mu.Unlock()
 	if checkStreamsQuota {
-		sq, err := wait(ctx, nil, t.shutdownChan, t.streamsQuota.acquire())
+		sq, err := wait(ctx, nil, nil, t.shutdownChan, t.streamsQuota.acquire())
 		if err != nil {
 			return nil, err
 		}
@@ -288,7 +290,7 @@ func (t *http2Client) NewStream(ctx context.Context, callHdr *CallHdr) (_ *Strea
 			t.streamsQuota.add(sq - 1)
 		}
 	}
-	if _, err := wait(ctx, nil, t.shutdownChan, t.writableChan); err != nil {
+	if _, err := wait(ctx, nil, nil, t.shutdownChan, t.writableChan); err != nil {
 		// Return the quota back now because there is no stream returned to the caller.
 		if _, ok := err.(StreamError); ok && checkStreamsQuota {
 			t.streamsQuota.add(1)
@@ -480,6 +482,12 @@ func (t *http2Client) GracefulClose() error {
 		return nil
 	}
 	t.state = draining
+	// Notify the streams which were initiated after the server sent GOAWAY.
+	for i := t.goAwayID + 2; i < t.nextID; i += 2 {
+		if s, ok := t.activeStreams[i]; ok {
+			close(s.goAway)
+		}
+	}
 	active := len(t.activeStreams)
 	t.mu.Unlock()
 	if active == 0 {
@@ -500,13 +508,13 @@ func (t *http2Client) Write(s *Stream, data []byte, opts *Options) error {
 			size := http2MaxFrameLen
 			s.sendQuotaPool.add(0)
 			// Wait until the stream has some quota to send the data.
-			sq, err := wait(s.ctx, s.done, t.shutdownChan, s.sendQuotaPool.acquire())
+			sq, err := wait(s.ctx, s.done, s.goAway, t.shutdownChan, s.sendQuotaPool.acquire())
 			if err != nil {
 				return err
 			}
 			t.sendQuotaPool.add(0)
 			// Wait until the transport has some quota to send the data.
-			tq, err := wait(s.ctx, s.done, t.shutdownChan, t.sendQuotaPool.acquire())
+			tq, err := wait(s.ctx, s.done, s.goAway, t.shutdownChan, t.sendQuotaPool.acquire())
 			if err != nil {
 				if _, ok := err.(StreamError); ok || err == io.EOF {
 					t.sendQuotaPool.cancel()
@@ -540,7 +548,7 @@ func (t *http2Client) Write(s *Stream, data []byte, opts *Options) error {
 		// Indicate there is a writer who is about to write a data frame.
 		t.framer.adjustNumWriters(1)
 		// Got some quota. Try to acquire writing privilege on the transport.
-		if _, err := wait(s.ctx, s.done, t.shutdownChan, t.writableChan); err != nil {
+		if _, err := wait(s.ctx, s.done, s.goAway, t.shutdownChan, t.writableChan); err != nil {
 			if _, ok := err.(StreamError); ok || err == io.EOF {
 				// Return the connection quota back.
 				t.sendQuotaPool.add(len(p))
@@ -723,7 +731,18 @@ func (t *http2Client) handlePing(f *http2.PingFrame) {
 }
 
 func (t *http2Client) handleGoAway(f *http2.GoAwayFrame) {
-	// TODO(zhaoq): GoAwayFrame handler to be implemented
+	t.mu.Lock()
+	t.goAwayID = f.LastStreamID
+	t.err = ErrDrain
+	close(t.errorChan)
+
+	// Notify the streams which were initiated after the server sent GOAWAY.
+	//for i := f.LastStreamID + 2; i < t.nextID; i += 2 {
+	//	if s, ok := t.activeStreams[i]; ok {
+	//		close(s.goAway)
+	//	}
+	//}
+	t.mu.Unlock()
 }
 
 func (t *http2Client) handleWindowUpdate(f *http2.WindowUpdateFrame) {
@@ -928,10 +947,14 @@ func (t *http2Client) controller() {
 	}
 }
 
-func (t *http2Client) Error() <-chan struct{} {
+func (t *http2Client) Done() <-chan struct{} {
 	return t.errorChan
 }
 
+func (t *http2Client) Err() error {
+	return t.err
+}
+
 func (t *http2Client) notifyError(err error) {
 	t.mu.Lock()
 	defer t.mu.Unlock()
diff --git a/transport/http2_server.go b/transport/http2_server.go
index 9e35fdd85..2467630a1 100644
--- a/transport/http2_server.go
+++ b/transport/http2_server.go
@@ -451,7 +451,7 @@ func (t *http2Server) WriteHeader(s *Stream, md metadata.MD) error {
 	}
 	s.headerOk = true
 	s.mu.Unlock()
-	if _, err := wait(s.ctx, nil, t.shutdownChan, t.writableChan); err != nil {
+	if _, err := wait(s.ctx, nil, nil, t.shutdownChan, t.writableChan); err != nil {
 		return err
 	}
 	t.hBuf.Reset()
@@ -491,7 +491,7 @@ func (t *http2Server) WriteStatus(s *Stream, statusCode codes.Code, statusDesc s
 		headersSent = true
 	}
 	s.mu.Unlock()
-	if _, err := wait(s.ctx, nil, t.shutdownChan, t.writableChan); err != nil {
+	if _, err := wait(s.ctx, nil, nil, t.shutdownChan, t.writableChan); err != nil {
 		return err
 	}
 	t.hBuf.Reset()
@@ -540,7 +540,7 @@ func (t *http2Server) Write(s *Stream, data []byte, opts *Options) error {
 	}
 	s.mu.Unlock()
 	if writeHeaderFrame {
-		if _, err := wait(s.ctx, nil, t.shutdownChan, t.writableChan); err != nil {
+		if _, err := wait(s.ctx, nil, nil, t.shutdownChan, t.writableChan); err != nil {
 			return err
 		}
 		t.hBuf.Reset()
@@ -568,13 +568,13 @@ func (t *http2Server) Write(s *Stream, data []byte, opts *Options) error {
 		size := http2MaxFrameLen
 		s.sendQuotaPool.add(0)
 		// Wait until the stream has some quota to send the data.
-		sq, err := wait(s.ctx, nil, t.shutdownChan, s.sendQuotaPool.acquire())
+		sq, err := wait(s.ctx, nil, nil, t.shutdownChan, s.sendQuotaPool.acquire())
 		if err != nil {
 			return err
 		}
 		t.sendQuotaPool.add(0)
 		// Wait until the transport has some quota to send the data.
-		tq, err := wait(s.ctx, nil, t.shutdownChan, t.sendQuotaPool.acquire())
+		tq, err := wait(s.ctx, nil, nil, t.shutdownChan, t.sendQuotaPool.acquire())
 		if err != nil {
 			if _, ok := err.(StreamError); ok {
 				t.sendQuotaPool.cancel()
@@ -600,7 +600,7 @@ func (t *http2Server) Write(s *Stream, data []byte, opts *Options) error {
 		t.framer.adjustNumWriters(1)
 		// Got some quota. Try to acquire writing privilege on the
 		// transport.
-		if _, err := wait(s.ctx, nil, t.shutdownChan, t.writableChan); err != nil {
+		if _, err := wait(s.ctx, nil, nil, t.shutdownChan, t.writableChan); err != nil {
 			if _, ok := err.(StreamError); ok {
 				// Return the connection quota back.
 				t.sendQuotaPool.add(ps)
diff --git a/transport/transport.go b/transport/transport.go
index 4dab57459..4a7b83c57 100644
--- a/transport/transport.go
+++ b/transport/transport.go
@@ -53,6 +53,10 @@ import (
 	"google.golang.org/grpc/metadata"
 )
 
+var (
+	ErrDrain = ConnectionErrorf("transport: Server stopped accepting new RPCs")
+)
+
 // recvMsg represents the received msg from the transport. All transport
 // protocol specific info has been removed.
 type recvMsg struct {
@@ -120,10 +124,11 @@ func (b *recvBuffer) get() <-chan item {
 // recvBufferReader implements io.Reader interface to read the data from
 // recvBuffer.
 type recvBufferReader struct {
-	ctx  context.Context
-	recv *recvBuffer
-	last *bytes.Reader // Stores the remaining data in the previous calls.
-	err  error
+	ctx    context.Context
+	goAway chan struct{}
+	recv   *recvBuffer
+	last   *bytes.Reader // Stores the remaining data in the previous calls.
+	err    error
 }
 
 // Read reads the next len(p) bytes from last. If last is drained, it tries to
@@ -141,6 +146,8 @@ func (r *recvBufferReader) Read(p []byte) (n int, err error) {
 	select {
 	case <-r.ctx.Done():
 		return 0, ContextErr(r.ctx.Err())
+	case <-r.goAway:
+		return 0, ErrConnDrain
 	case i := <-r.recv.get():
 		r.recv.load()
 		m := i.(*recvMsg)
@@ -171,6 +178,8 @@ type Stream struct {
 	cancel context.CancelFunc
 	// done is closed when the final status arrives.
 	done chan struct{}
+	// goAway
+	goAway chan struct{}
 	// method records the associated RPC method of the stream.
 	method       string
 	recvCompress string
@@ -220,6 +229,10 @@ func (s *Stream) Done() <-chan struct{} {
 	return s.done
 }
 
+func (s *Stream) GoAway() <-chan struct{} {
+	return s.goAway
+}
+
 // Header acquires the key-value pairs of header metadata once it
 // is available. It blocks until i) the metadata is ready or ii) there is no
 // header metadata or iii) the stream is cancelled/expired.
@@ -422,7 +435,18 @@ type ClientTransport interface {
 	// this in order to take action (e.g., close the current transport
 	// and create a new one) in error case. It should not return nil
 	// once the transport is initiated.
-	Error() <-chan struct{}
+	//Error() <-chan struct{}
+
+	// Done returns a channel that is closed when some I/O error
+	// happens or ClientTranspor receives the draining signal from the server
+	// (e.g., GOAWAY frame in HTTP/2). Typically the caller should have
+	// a goroutine to monitor this in order to take action (e.g., close
+	// the current transport and create a new one) in error case. It should
+	// not return nil once the transport is initiated.
+	Done() <-chan struct{}
+
+	// Err returns ...
+	Err() error
 }
 
 // ServerTransport is the common interface for all gRPC server-side transport
@@ -482,7 +506,10 @@ func (e ConnectionError) Error() string {
 }
 
 // ErrConnClosing indicates that the transport is closing.
-var ErrConnClosing = ConnectionError{Desc: "transport is closing"}
+var (
+	ErrConnClosing = ConnectionError{Desc: "transport is closing"}
+	ErrConnDrain   = ConnectionError{Desc: "transport is being drained"}
+)
 
 // StreamError is an error that only affects one stream within a connection.
 type StreamError struct {
@@ -509,9 +536,10 @@ func ContextErr(err error) StreamError {
 // If it receives from ctx.Done, it returns 0, the StreamError for ctx.Err.
 // If it receives from done, it returns 0, io.EOF if ctx is not done; otherwise
 // it return the StreamError for ctx.Err.
+// If it receives from goAway, it returns 0, ErrConnDrain.
 // If it receives from closing, it returns 0, ErrConnClosing.
 // If it receives from proceed, it returns the received integer, nil.
-func wait(ctx context.Context, done, closing <-chan struct{}, proceed <-chan int) (int, error) {
+func wait(ctx context.Context, done, goAway, closing <-chan struct{}, proceed <-chan int) (int, error) {
 	select {
 	case <-ctx.Done():
 		return 0, ContextErr(ctx.Err())
@@ -523,6 +551,8 @@ func wait(ctx context.Context, done, closing <-chan struct{}, proceed <-chan int
 		default:
 		}
 		return 0, io.EOF
+	case <-goAway:
+		return 0, ErrConnDrain
 	case <-closing:
 		return 0, ErrConnClosing
 	case i := <-proceed:
diff --git a/transport/transport_test.go b/transport/transport_test.go
index ce015da29..a98f27e5b 100644
--- a/transport/transport_test.go
+++ b/transport/transport_test.go
@@ -271,8 +271,8 @@ func TestClientSendAndReceive(t *testing.T) {
 func TestClientErrorNotify(t *testing.T) {
 	server, ct := setUp(t, 0, math.MaxUint32, normal)
 	go server.stop()
-	// ct.reader should detect the error and activate ct.Error().
-	<-ct.Error()
+	// ct.reader should detect the error and activate ct.Done().
+	<-ct.Done()
 	ct.Close()
 }
 
@@ -309,7 +309,7 @@ func TestClientMix(t *testing.T) {
 		s.stop()
 	}(s)
 	go func(ct ClientTransport) {
-		<-ct.Error()
+		<-ct.Done()
 		ct.Close()
 	}(ct)
 	for i := 0; i < 1000; i++ {
@@ -700,7 +700,7 @@ func TestClientWithMisbehavedServer(t *testing.T) {
 		}
 	}
 	// http2Client.errChan is closed due to connection flow control window size violation.
-	<-conn.Error()
+	<-conn.Done()
 	ct.Close()
 	server.stop()
 }