diff --git a/grpclb/src/main/java/io/grpc/grpclb/GrpclbState.java b/grpclb/src/main/java/io/grpc/grpclb/GrpclbState.java
index 2ee6befb8e..dc53be584c 100644
--- a/grpclb/src/main/java/io/grpc/grpclb/GrpclbState.java
+++ b/grpclb/src/main/java/io/grpc/grpclb/GrpclbState.java
@@ -203,9 +203,20 @@ final class GrpclbState {
     if (config.getMode() == Mode.ROUND_ROBIN && newState.getState() == IDLE) {
       subchannel.requestConnection();
     }
-    subchannel.getAttributes().get(STATE_INFO).set(newState);
-    maybeUseFallbackBackends();
-    maybeUpdatePicker();
+    AtomicReference<ConnectivityStateInfo> stateInfoRef =
+        subchannel.getAttributes().get(STATE_INFO);
+    // If all RR servers are unhealthy, it's possible that at least one connection is CONNECTING at
+    // every moment which causes RR to stay in CONNECTING. It's better to keep the TRANSIENT_FAILURE
+    // state in that case so that fail-fast RPCs can fail fast.
+    boolean keepState =
+        config.getMode() == Mode.ROUND_ROBIN
+        && stateInfoRef.get().getState() == TRANSIENT_FAILURE
+        && (newState.getState() == CONNECTING || newState.getState() == IDLE);
+    if (!keepState) {
+      stateInfoRef.set(newState);
+      maybeUseFallbackBackends();
+      maybeUpdatePicker();
+    }
   }
 
   /**
diff --git a/grpclb/src/test/java/io/grpc/grpclb/GrpclbLoadBalancerTest.java b/grpclb/src/test/java/io/grpc/grpclb/GrpclbLoadBalancerTest.java
index dbbf9f8dab..abc9074338 100644
--- a/grpclb/src/test/java/io/grpc/grpclb/GrpclbLoadBalancerTest.java
+++ b/grpclb/src/test/java/io/grpc/grpclb/GrpclbLoadBalancerTest.java
@@ -1104,6 +1104,49 @@ public class GrpclbLoadBalancerTest {
     verify(subchannelPool).clear();
   }
 
+  @Test
+  public void roundRobinMode_subchannelStayTransientFailureUntilReady() {
+    InOrder inOrder = inOrder(helper);
+    List<EquivalentAddressGroup> grpclbBalancerList = createResolvedBalancerAddresses(1);
+    deliverResolvedAddresses(Collections.<EquivalentAddressGroup>emptyList(), grpclbBalancerList);
+    verify(mockLbService).balanceLoad(lbResponseObserverCaptor.capture());
+    StreamObserver<LoadBalanceResponse> lbResponseObserver = lbResponseObserverCaptor.getValue();
+
+    // Simulate receiving LB response
+    List<ServerEntry> backends1 = Arrays.asList(
+        new ServerEntry("127.0.0.1", 2000, "token0001"),
+        new ServerEntry("127.0.0.1", 2010, "token0002"));
+    lbResponseObserver.onNext(buildInitialResponse());
+    lbResponseObserver.onNext(buildLbResponse(backends1));
+    assertEquals(2, mockSubchannels.size());
+    Subchannel subchannel1 = mockSubchannels.poll();
+    Subchannel subchannel2 = mockSubchannels.poll();
+
+    deliverSubchannelState(subchannel1, ConnectivityStateInfo.forNonError(CONNECTING));
+    deliverSubchannelState(subchannel2, ConnectivityStateInfo.forNonError(CONNECTING));
+    inOrder.verify(helper).updateBalancingState(eq(CONNECTING), any(SubchannelPicker.class));
+
+    // Switch subchannel1 to TRANSIENT_FAILURE, making the general state TRANSIENT_FAILURE too.
+    Status error = Status.UNAVAILABLE.withDescription("error1");
+    deliverSubchannelState(subchannel1, ConnectivityStateInfo.forTransientFailure(error));
+    inOrder.verify(helper).updateBalancingState(eq(TRANSIENT_FAILURE), pickerCaptor.capture());
+    assertThat(((RoundRobinPicker) pickerCaptor.getValue()).pickList)
+        .containsExactly(new ErrorEntry(error));
+
+    // Switch subchannel1 to IDLE, then to CONNECTING, which are ignored since the previous
+    // subchannel state is TRANSIENT_FAILURE. General state is unchanged.
+    deliverSubchannelState(subchannel1, ConnectivityStateInfo.forNonError(IDLE));
+    deliverSubchannelState(subchannel1, ConnectivityStateInfo.forNonError(CONNECTING));
+    inOrder.verifyNoMoreInteractions();
+
+    // Switch subchannel1 to READY, which will affect the general state
+    deliverSubchannelState(subchannel1, ConnectivityStateInfo.forNonError(READY));
+    inOrder.verify(helper).updateBalancingState(eq(READY), pickerCaptor.capture());
+    assertThat(((RoundRobinPicker) pickerCaptor.getValue()).pickList)
+        .containsExactly(new BackendEntry(subchannel1, getLoadRecorder(), "token0001"));
+    inOrder.verifyNoMoreInteractions();
+  }
+
   @Test
   public void grpclbFallback_initialTimeout_serverListReceivedBeforeTimerExpires() {
     subtestGrpclbFallbackInitialTimeout(false);