diff --git a/credentials/alts/alts_test.go b/credentials/alts/alts_test.go
index aef9642f8..9a95d4628 100644
--- a/credentials/alts/alts_test.go
+++ b/credentials/alts/alts_test.go
@@ -24,7 +24,6 @@ package alts
 import (
 	"context"
 	"reflect"
-	"runtime"
 	"sync"
 	"testing"
 	"time"
@@ -309,21 +308,12 @@ func (s) TestCheckRPCVersions(t *testing.T) {
 // server, where both client and server offload to a local, fake handshaker
 // service.
 func (s) TestFullHandshake(t *testing.T) {
-	// If GOMAXPROCS is set to less than 2, do not run this test. This test
-	// requires at least 2 goroutines to succeed (one goroutine where a
-	// server listens, another goroutine where a client runs).
-	if runtime.GOMAXPROCS(0) < 2 {
-		return
-	}
-
 	// The vmOnGCP global variable MUST be reset to true after the client
 	// or server credentials have been created, but before the ALTS
 	// handshake begins. If vmOnGCP is not reset and this test is run
 	// anywhere except for a GCP VM, then the ALTS handshake will
 	// immediately fail.
-	once.Do(func() {
-		vmOnGCP = true
-	})
+	once.Do(func() {})
 	vmOnGCP = true
 
 	// Start the fake handshaker service and the server.
diff --git a/credentials/alts/internal/testutil/testutil.go b/credentials/alts/internal/testutil/testutil.go
index 24a61202a..cdc88c8f9 100644
--- a/credentials/alts/internal/testutil/testutil.go
+++ b/credentials/alts/internal/testutil/testutil.go
@@ -136,6 +136,7 @@ type FakeHandshaker struct {
 // DoHandshake performs a fake ALTS handshake.
 func (h *FakeHandshaker) DoHandshake(stream altsgrpc.HandshakerService_DoHandshakeServer) error {
 	var isAssistingClient bool
+	var handshakeFramesReceivedSoFar []byte
 	for {
 		req, err := stream.Recv()
 		if err != nil {
@@ -153,15 +154,38 @@ func (h *FakeHandshaker) DoHandshake(stream altsgrpc.HandshakerService_DoHandsha
 				return fmt.Errorf("processStartClient failure: %v", err)
 			}
 		case *altspb.HandshakerReq_ServerStart:
+			// If we have received the full ClientInit, send the ServerInit and
+			// ServerFinished. Otherwise, wait for more bytes to arrive from the client.
 			isAssistingClient = false
-			resp, err = h.processServerStart(req.ServerStart)
+			handshakeFramesReceivedSoFar = append(handshakeFramesReceivedSoFar, req.ServerStart.InBytes...)
+			sendHandshakeFrame := bytes.Equal(handshakeFramesReceivedSoFar, []byte("ClientInit"))
+			resp, err = h.processServerStart(req.ServerStart, sendHandshakeFrame)
 			if err != nil {
-				return fmt.Errorf("processServerClient failure: %v", err)
+				return fmt.Errorf("processServerStart failure: %v", err)
 			}
 		case *altspb.HandshakerReq_Next:
-			resp, err = h.processNext(req.Next, isAssistingClient)
+			// If we have received all handshake frames, send the handshake result.
+			// Otherwise, wait for more bytes to arrive from the peer.
+			oldHandshakesBytes := len(handshakeFramesReceivedSoFar)
+			handshakeFramesReceivedSoFar = append(handshakeFramesReceivedSoFar, req.Next.InBytes...)
+			isHandshakeComplete := false
+			if isAssistingClient {
+				isHandshakeComplete = bytes.HasPrefix(handshakeFramesReceivedSoFar, []byte("ServerInitServerFinished"))
+			} else {
+				isHandshakeComplete = bytes.HasPrefix(handshakeFramesReceivedSoFar, []byte("ClientInitClientFinished"))
+			}
+			if !isHandshakeComplete {
+				resp = &altspb.HandshakerResp{
+					BytesConsumed: uint32(len(handshakeFramesReceivedSoFar) - oldHandshakesBytes),
+					Status: &altspb.HandshakerStatus{
+						Code: uint32(codes.OK),
+					},
+				}
+				break
+			}
+			resp, err = h.getHandshakeResult(isAssistingClient)
 			if err != nil {
-				return fmt.Errorf("processNext failure: %v", err)
+				return fmt.Errorf("getHandshakeResult failure: %v", err)
 			}
 		default:
 			return fmt.Errorf("handshake request has unexpected type: %v", req)
@@ -192,7 +216,7 @@ func (h *FakeHandshaker) processStartClient(req *altspb.StartClientHandshakeReq)
 	}, nil
 }
 
-func (h *FakeHandshaker) processServerStart(req *altspb.StartServerHandshakeReq) (*altspb.HandshakerResp, error) {
+func (h *FakeHandshaker) processServerStart(req *altspb.StartServerHandshakeReq, sendHandshakeFrame bool) (*altspb.HandshakerResp, error) {
 	if len(req.ApplicationProtocols) != 1 || req.ApplicationProtocols[0] != "grpc" {
 		return nil, fmt.Errorf("unexpected application protocols: %v", req.ApplicationProtocols)
 	}
@@ -203,8 +227,14 @@ func (h *FakeHandshaker) processServerStart(req *altspb.StartServerHandshakeReq)
 	if len(parameters.RecordProtocols) != 1 || parameters.RecordProtocols[0] != "ALTSRP_GCM_AES128_REKEY" {
 		return nil, fmt.Errorf("unexpected record protocols: %v", parameters.RecordProtocols)
 	}
-	if string(req.InBytes) != "ClientInit" {
-		return nil, fmt.Errorf("unexpected in bytes: %v", req.InBytes)
+	if sendHandshakeFrame {
+		return &altspb.HandshakerResp{
+			OutFrames:     []byte("ServerInitServerFinished"),
+			BytesConsumed: uint32(len(req.InBytes)),
+			Status: &altspb.HandshakerStatus{
+				Code: uint32(codes.OK),
+			},
+		}, nil
 	}
 	return &altspb.HandshakerResp{
 		OutFrames:     []byte("ServerInitServerFinished"),
@@ -215,11 +245,8 @@ func (h *FakeHandshaker) processServerStart(req *altspb.StartServerHandshakeReq)
 	}, nil
 }
 
-func (h *FakeHandshaker) processNext(req *altspb.NextHandshakeMessageReq, isAssistingClient bool) (*altspb.HandshakerResp, error) {
+func (h *FakeHandshaker) getHandshakeResult(isAssistingClient bool) (*altspb.HandshakerResp, error) {
 	if isAssistingClient {
-		if !bytes.Equal(req.InBytes, []byte("ServerInitServerFinished")) {
-			return nil, fmt.Errorf("unexpected in bytes: got: %v, want: %v", req.InBytes, []byte("ServerInitServerFinished"))
-		}
 		return &altspb.HandshakerResp{
 			OutFrames:     []byte("ClientFinished"),
 			BytesConsumed: 24,
@@ -248,9 +275,6 @@ func (h *FakeHandshaker) processNext(req *altspb.NextHandshakeMessageReq, isAssi
 			},
 		}, nil
 	}
-	if !bytes.Equal(req.InBytes, []byte("ClientFinished")) {
-		return nil, fmt.Errorf("unexpected in bytes: got: %v, want: %v", req.InBytes, []byte("ClientFinished"))
-	}
 	return &altspb.HandshakerResp{
 		BytesConsumed: 14,
 		Result: &altspb.HandshakerResult{