diff --git a/proxy/src/config.rs b/proxy/src/config.rs
index c6e737fd1..b1763b36d 100644
--- a/proxy/src/config.rs
+++ b/proxy/src/config.rs
@@ -49,6 +49,9 @@ pub struct Config {
     /// Timeout after which to cancel telemetry reports.
     pub report_timeout: Duration,
 
+    /// Timeout after which to cancel binding a request.
+    pub bind_timeout: Duration,
+
     pub pod_name: Option<String>,
     pub pod_namespace: Option<String>,
     pub pod_zone: Option<String>,
@@ -139,6 +142,7 @@ pub const ENV_PUBLIC_LISTENER: &str = "CONDUIT_PROXY_PUBLIC_LISTENER";
 pub const ENV_CONTROL_LISTENER: &str = "CONDUIT_PROXY_CONTROL_LISTENER";
 const ENV_PRIVATE_CONNECT_TIMEOUT: &str = "CONDUIT_PROXY_PRIVATE_CONNECT_TIMEOUT";
 const ENV_PUBLIC_CONNECT_TIMEOUT: &str = "CONDUIT_PROXY_PUBLIC_CONNECT_TIMEOUT";
+pub const ENV_BIND_TIMEOUT: &str = "CONDUIT_PROXY_BIND_TIMEOUT";
 
 const ENV_NODE_NAME: &str = "CONDUIT_PROXY_NODE_NAME";
 const ENV_POD_NAME: &str = "CONDUIT_PROXY_POD_NAME";
@@ -157,6 +161,7 @@ const DEFAULT_PRIVATE_LISTENER: &str = "tcp://127.0.0.1:4140";
 const DEFAULT_PUBLIC_LISTENER: &str = "tcp://0.0.0.0:4143";
 const DEFAULT_CONTROL_LISTENER: &str = "tcp://0.0.0.0:4190";
 const DEFAULT_PRIVATE_CONNECT_TIMEOUT_MS: u64 = 20;
+const DEFAULT_BIND_TIMEOUT_MS: u64 = 10_000; // ten seconds, as in Linkerd.
 const DEFAULT_RESOLV_CONF: &str = "/etc/resolv.conf";
 
 // ===== impl Config =====
@@ -174,6 +179,7 @@ impl<'a> TryFrom<&'a Strings> for Config {
         let private_forward = parse(strings, ENV_PRIVATE_FORWARD, str::parse);
         let public_connect_timeout = parse(strings, ENV_PUBLIC_CONNECT_TIMEOUT, parse_number);
         let private_connect_timeout = parse(strings, ENV_PRIVATE_CONNECT_TIMEOUT, parse_number);
+        let bind_timeout = parse(strings, ENV_BIND_TIMEOUT, parse_number);
         let resolv_conf_path = strings.get(ENV_RESOLV_CONF);
         let event_buffer_capacity = parse(strings, ENV_EVENT_BUFFER_CAPACITY, parse_number);
         let metrics_flush_interval_secs =
@@ -226,6 +232,8 @@ impl<'a> TryFrom<&'a Strings> for Config {
                                         .unwrap_or(DEFAULT_METRICS_FLUSH_INTERVAL_SECS)),
             report_timeout:
                 Duration::from_secs(report_timeout?.unwrap_or(DEFAULT_REPORT_TIMEOUT_SECS)),
+            bind_timeout:
+                Duration::from_millis(bind_timeout?.unwrap_or(DEFAULT_BIND_TIMEOUT_MS)),
             pod_name: pod_name?,
             pod_namespace: pod_namespace?,
             pod_zone: pod_zone?,
diff --git a/proxy/src/lib.rs b/proxy/src/lib.rs
index b56920cee..456d2dacd 100644
--- a/proxy/src/lib.rs
+++ b/proxy/src/lib.rs
@@ -223,7 +223,9 @@ where
                 bind,
                 control,
                 config.default_destination_namespace().cloned(),
-                config.default_destination_zone().cloned());
+                config.default_destination_zone().cloned(),
+                config.bind_timeout,
+            );
 
             let fut = serve(
                 outbound_listener,
diff --git a/proxy/src/outbound.rs b/proxy/src/outbound.rs
index 5d1c5bf94..394ca58df 100644
--- a/proxy/src/outbound.rs
+++ b/proxy/src/outbound.rs
@@ -1,4 +1,5 @@
 use std::net::SocketAddr;
+use std::time::Duration;
 
 use futures::{Async, Poll};
 use http;
@@ -17,6 +18,7 @@ use control::{self, discovery};
 use control::discovery::Bind as BindTrait;
 use ctx;
 use fully_qualified_authority::FullyQualifiedAuthority;
+use timeout::Timeout;
 
 type BindProtocol<B> = bind::BindProtocol<Arc<ctx::Proxy>, B>;
 
@@ -25,6 +27,7 @@ pub struct Outbound<B> {
     discovery: control::Control,
     default_namespace: Option<String>,
     default_zone: Option<String>,
+    bind_timeout: Duration,
 }
 
 const MAX_IN_FLIGHT: usize = 10_000;
@@ -32,14 +35,18 @@ const MAX_IN_FLIGHT: usize = 10_000;
 // ===== impl Outbound =====
 
 impl<B> Outbound<B> {
-    pub fn new(bind: Bind<Arc<ctx::Proxy>, B>, discovery: control::Control,
-               default_namespace: Option<String>, default_zone: Option<String>)
+    pub fn new(bind: Bind<Arc<ctx::Proxy>, B>,
+               discovery: control::Control,
+               default_namespace: Option<String>,
+               default_zone: Option<String>,
+               bind_timeout: Duration,)
                -> Outbound<B> {
         Self {
             bind,
             discovery,
             default_namespace,
             default_zone,
+            bind_timeout,
         }
     }
 }
@@ -59,10 +66,10 @@ where
     type Error = <Self::Service as tower::Service>::Error;
     type Key = (Destination, Protocol);
     type RouteError = ();
-    type Service = InFlightLimit<Buffer<Balance<
+    type Service = InFlightLimit<Timeout<Buffer<Balance<
         load::WithPendingRequests<Discovery<B>>,
-        choose::PowerOfTwoChoices<rand::ThreadRng>,
-    >>>;
+        choose::PowerOfTwoChoices<rand::ThreadRng>
+    >>>>;
 
     fn recognize(&self, req: &Self::Request) -> Option<Self::Key> {
         let local = req.uri().authority_part().and_then(|authority| {
@@ -131,11 +138,16 @@ where
 
         let balance = tower_balance::power_of_two_choices(loaded, rand::thread_rng());
 
-        Buffer::new(balance, self.bind.executor())
-            .map(|buffer| {
-                InFlightLimit::new(buffer, MAX_IN_FLIGHT)
-            })
-            .map_err(|_| {})
+        // use the same executor as the underlying `Bind` for the `Buffer` and
+        // `Timeout`.
+        let handle = self.bind.executor();
+
+        let buffer = Buffer::new(balance, handle).map_err(|_| {})?;
+
+        let timeout = Timeout::new(buffer, self.bind_timeout, handle);
+
+        Ok(InFlightLimit::new(timeout, MAX_IN_FLIGHT))
+
     }
 }
 
diff --git a/proxy/src/timeout.rs b/proxy/src/timeout.rs
index 5c605781b..ecc2fb0fd 100644
--- a/proxy/src/timeout.rs
+++ b/proxy/src/timeout.rs
@@ -11,7 +11,6 @@ use tokio_core::reactor::{Timeout as ReactorTimeout, Handle};
 use tokio_io;
 use tower::Service;
 
-
 /// A timeout that wraps an underlying operation.
 #[derive(Debug, Clone)]
 pub struct Timeout<U> {
@@ -53,7 +52,6 @@ impl<U> Timeout<U> {
 impl<S, T, E> Service for Timeout<S>
 where
     S: Service<Response=T, Error=E>,
-    // E: Error,
 {
     type Request = S::Request;
     type Response = T;
@@ -66,9 +64,8 @@ where
 
     fn call(&mut self, req: Self::Request) -> Self::Future {
         let duration = self.duration;
-        // TODO: should this panic or wrap the error?
         let timeout = ReactorTimeout::new(duration, &self.handle)
-            .expect("failed to create timeout!");
+            .expect("reactor gone");
         let inner = self.inner.call(req);
         TimeoutFuture {
             inner,
@@ -82,7 +79,6 @@ where
 impl<C> Connect for Timeout<C>
 where
     C: Connect,
-    // C::Error: Error,
 {
     type Connected = C::Connected;
     type Error = TimeoutError<C::Error>;
@@ -90,9 +86,8 @@ where
 
     fn connect(&self) -> Self::Future {
         let duration = self.duration;
-        // TODO: should this panic or wrap the error?
         let timeout = ReactorTimeout::new(duration, &self.handle)
-            .expect("failed to create timeout!");
+            .expect("reactor gone");
         let inner = self.inner.connect();
         TimeoutFuture {
             inner,
diff --git a/proxy/tests/discovery.rs b/proxy/tests/discovery.rs
index 1179ec005..efaa35567 100644
--- a/proxy/tests/discovery.rs
+++ b/proxy/tests/discovery.rs
@@ -1,6 +1,8 @@
 mod support;
 use self::support::*;
 
+use std::thread;
+
 #[test]
 fn outbound_asks_controller_api() {
     let _ = env_logger::init();
@@ -55,10 +57,36 @@ fn outbound_updates_newer_services() {
 }
 
 #[test]
-#[ignore]
+#[cfg_attr(not(feature = "flaky_tests"), ignore)]
 fn outbound_times_out() {
-    // Currently, the outbound router will wait forever until discovery tells
-    // it where to send the request. It should probably time out eventually.
+    let _ = env_logger::init();
+    let mut env = config::TestEnv::new();
+
+    // set the bind timeout to 100 ms.
+    env.put(config::ENV_BIND_TIMEOUT, "100".to_owned());
+
+    let srv = server::http1().route("/h1", "hello h1").run();
+    let addr = srv.addr.clone();
+    let ctrl = controller::new()
+        // when the proxy requests the destination, sleep for 500 ms, and then
+        // return the correct destination
+        .destination_fn("disco.test.svc.cluster.local", move || {
+            thread::sleep(Duration::from_millis(500));
+            Some(controller::destination_update(addr))
+        })
+        .run();
+
+    let proxy = proxy::new()
+        .controller(ctrl)
+        .outbound(srv)
+        .run_with_test_env(env);
+
+    let client = client::http2(proxy.outbound, "disco.test.svc.cluster.local");
+    let mut req = client.request_builder("/");
+    let rsp = client.request(req.method("GET"));
+
+    // the request should time out
+    assert_eq!(rsp.status(), http::StatusCode::INTERNAL_SERVER_ERROR);
 }
 
 #[test]
diff --git a/proxy/tests/support/controller.rs b/proxy/tests/support/controller.rs
index d3b98bfc7..74bf595e2 100644
--- a/proxy/tests/support/controller.rs
+++ b/proxy/tests/support/controller.rs
@@ -2,6 +2,7 @@
 
 use support::*;
 
+use std::fmt;
 use std::net::IpAddr;
 use std::sync::{Arc, Mutex};
 
@@ -14,9 +15,11 @@ pub fn new() -> Controller {
     Controller::new()
 }
 
+struct Destination(Box<Fn() -> Option<pb::destination::Update> + Send>);
+
 #[derive(Debug)]
 pub struct Controller {
-    destinations: Vec<(String, Option<pb::destination::Update>)>,
+    destinations: Vec<(String, Destination)>,
     reports: Option<mpsc::UnboundedSender<pb::telemetry::ReportRequest>>,
 }
 
@@ -35,14 +38,21 @@ impl Controller {
     }
 
     pub fn destination(mut self, dest: &str, addr: SocketAddr) -> Self {
+        self.destination_fn(dest, move || Some(destination_update(addr)))
+    }
+
+    pub fn destination_fn<F>(mut self, dest: &str, f: F) -> Self
+    where
+        F: Fn() -> Option<pb::destination::Update> + Send + 'static,
+    {
         self.destinations
-            .push((dest.into(), Some(destination_update(addr))));
+            .push((dest.into(), Destination(Box::new(f))));
         self
     }
 
+
     pub fn destination_close(mut self, dest: &str) -> Self {
-        self.destinations.push((dest.into(), None));
-        self
+        self.destination_fn(dest, || None)
     }
 
     pub fn reports(&mut self) -> mpsc::UnboundedReceiver<pb::telemetry::ReportRequest> {
@@ -57,11 +67,17 @@ impl Controller {
 }
 
 type Response = self::http::Response<GrpcBody>;
-type Destinations = Arc<Mutex<Vec<(String, Option<pb::destination::Update>)>>>;
+type Destinations = Arc<Mutex<Vec<(String, Destination)>>>;
 
 const DESTINATION_GET: &str = "/conduit.proxy.destination.Destination/Get";
 const TELEMETRY_REPORT: &str = "/conduit.proxy.telemetry.Telemetry/Report";
 
+impl fmt::Debug for Destination {
+    fn fmt(&self, f: &mut fmt::Formatter) -> fmt::Result {
+        write!(f, "Destination")
+    }
+}
+
 #[derive(Debug)]
 struct Svc {
     destinations: Destinations,
@@ -85,7 +101,8 @@ impl Svc {
                         let mut vec = destinations.lock().unwrap();
                         //TODO: decode `_bytes` and compare with `.0`
                         if !vec.is_empty() {
-                            vec.remove(0).1
+                            let Destination(f) = vec.remove(0).1;
+                            f()
                         } else {
                             None
                         }
@@ -249,7 +266,7 @@ fn run(controller: Controller) -> Listening {
     }
 }
 
-fn destination_update(addr: SocketAddr) -> pb::destination::Update {
+pub fn destination_update(addr: SocketAddr) -> pb::destination::Update {
     pb::destination::Update {
         update: Some(pb::destination::update::Update::Add(
             pb::destination::WeightedAddrSet {
diff --git a/proxy/tests/support/proxy.rs b/proxy/tests/support/proxy.rs
index e94250bcb..eb601a752 100644
--- a/proxy/tests/support/proxy.rs
+++ b/proxy/tests/support/proxy.rs
@@ -58,7 +58,11 @@ impl Proxy {
     }
 
     pub fn run(self) -> Listening {
-        run(self)
+        self.run_with_test_env(config::TestEnv::new())
+    }
+
+    pub fn run_with_test_env(self, mut env: config::TestEnv) -> Listening {
+        run(self, env)
     }
 }
 
@@ -90,7 +94,8 @@ impl conduit_proxy::GetOriginalDst for MockOriginalDst {
     }
 }
 
-fn run(proxy: Proxy) -> Listening {
+
+fn run(proxy: Proxy, mut env: config::TestEnv) -> Listening {
     use self::conduit_proxy::config;
 
     let controller = proxy.controller.expect("proxy controller missing");
@@ -98,7 +103,6 @@ fn run(proxy: Proxy) -> Listening {
     let outbound = proxy.outbound;
     let mut mock_orig_dst = DstInner::default();
 
-    let mut env = config::TestEnv::new();
     env.put(config::ENV_CONTROL_URL, format!("tcp://{}", controller.addr));
     env.put(config::ENV_PRIVATE_LISTENER, "tcp://127.0.0.1:0".to_owned());
     if let Some(ref inbound) = inbound {