diff --git a/build.gradle b/build.gradle
index 1ae3996c99..4c683b87e6 100644
--- a/build.gradle
+++ b/build.gradle
@@ -39,7 +39,7 @@ subprojects {
 
                 // TODO: Unreleased dependencies.
                 // These must already be installed in the local maven repository.
-                netty: 'io.netty:netty-codec-http2:5.0.0.Alpha3-SNAPSHOT',
+                netty: 'io.netty:netty-codec-http2:4.1.0.Beta5-SNAPSHOT',
 
                 // Test dependencies.
                 junit: 'junit:junit:4.11',
diff --git a/core/src/main/java/io/grpc/transport/AbstractClientStream.java b/core/src/main/java/io/grpc/transport/AbstractClientStream.java
index 55fb78662e..779a9719f8 100644
--- a/core/src/main/java/io/grpc/transport/AbstractClientStream.java
+++ b/core/src/main/java/io/grpc/transport/AbstractClientStream.java
@@ -125,7 +125,6 @@ public abstract class AbstractClientStream<IdT> extends AbstractStream<IdT>
    * Processes the contents of a received data frame from the server.
    *
    * @param frame the received data frame. Its ownership is transferred to this method.
-   * @param 
    */
   protected void inboundDataReceived(Buffer frame) {
     Preconditions.checkNotNull(frame, "frame");
diff --git a/core/src/main/java/io/grpc/transport/HttpUtil.java b/core/src/main/java/io/grpc/transport/HttpUtil.java
index 48bce6d948..7bd48f191e 100644
--- a/core/src/main/java/io/grpc/transport/HttpUtil.java
+++ b/core/src/main/java/io/grpc/transport/HttpUtil.java
@@ -191,7 +191,7 @@ public final class HttpUtil {
     /**
      * Looks up the {@link Status} from the given HTTP/2 error code.
      *
-     * @param errorCode the HTTP/2 error code.
+     * @param code the HTTP/2 error code.
      * @return a {@link Status} representing the given error.
      */
     public static Status statusForCode(int code) {
diff --git a/lib/netty b/lib/netty
index 44ee2cac43..3df7b4dac7 160000
--- a/lib/netty
+++ b/lib/netty
@@ -1 +1 @@
-Subproject commit 44ee2cac433a6f8640d01a70e8b90b70852aeeae
+Subproject commit 3df7b4dac746c2af2d65528bf85495eb530aba41
diff --git a/netty/src/main/java/io/grpc/transport/netty/Http2Negotiator.java b/netty/src/main/java/io/grpc/transport/netty/Http2Negotiator.java
index 7a3a1814f5..451517fc6f 100644
--- a/netty/src/main/java/io/grpc/transport/netty/Http2Negotiator.java
+++ b/netty/src/main/java/io/grpc/transport/netty/Http2Negotiator.java
@@ -37,8 +37,8 @@ import com.google.common.util.concurrent.SettableFuture;
 
 import io.netty.channel.Channel;
 import io.netty.channel.ChannelHandler;
-import io.netty.channel.ChannelHandlerAdapter;
 import io.netty.channel.ChannelHandlerContext;
+import io.netty.channel.ChannelInboundHandlerAdapter;
 import io.netty.channel.ChannelInitializer;
 import io.netty.handler.codec.http.DefaultHttpRequest;
 import io.netty.handler.codec.http.HttpClientCodec;
@@ -229,7 +229,7 @@ public class Http2Negotiator {
   /**
    * Report protocol upgrade completion using a promise.
    */
-  private static class UpgradeCompletionHandler extends ChannelHandlerAdapter {
+  private static class UpgradeCompletionHandler extends ChannelInboundHandlerAdapter {
     private final SettableFuture<Void> upgradeFuture = SettableFuture.create();
 
     public ListenableFuture<Void> getUpgradeFuture() {
diff --git a/netty/src/main/java/io/grpc/transport/netty/Utils.java b/netty/src/main/java/io/grpc/transport/netty/Utils.java
index 412294052c..798985cc77 100644
--- a/netty/src/main/java/io/grpc/transport/netty/Utils.java
+++ b/netty/src/main/java/io/grpc/transport/netty/Utils.java
@@ -45,12 +45,9 @@ import io.netty.channel.nio.NioEventLoopGroup;
 import io.netty.handler.codec.AsciiString;
 import io.netty.handler.codec.http2.DefaultHttp2Headers;
 import io.netty.handler.codec.http2.Http2Headers;
-import io.netty.util.concurrent.ExecutorServiceFactory;
 
 import java.nio.ByteBuffer;
 import java.util.Map;
-import java.util.concurrent.ExecutorService;
-import java.util.concurrent.Executors;
 
 /**
  * Common utility methods.
@@ -177,13 +174,8 @@ class Utils {
 
     @Override
     public EventLoopGroup create() {
-      return new NioEventLoopGroup(0, new ExecutorServiceFactory() {
-        @Override
-        public ExecutorService newExecutorService(int parallelism) {
-          return Executors.newFixedThreadPool(parallelism, new ThreadFactoryBuilder()
-              .setNameFormat(name + "-%d").build());
-        }
-      });
+      return new NioEventLoopGroup(0, new ThreadFactoryBuilder().setNameFormat(name + "-%d")
+          .build());
     }
 
     @Override