diff --git a/clientv3/integration/watch_test.go b/clientv3/integration/watch_test.go
index 4c9f14757c5..e36f9a9a801 100644
--- a/clientv3/integration/watch_test.go
+++ b/clientv3/integration/watch_test.go
@@ -514,6 +514,9 @@ func TestWatchCompactRevision(t *testing.T) {
 	if wresp.Err() != rpctypes.ErrCompacted {
 		t.Fatalf("wresp.Err() expected %v, but got %v", rpctypes.ErrCompacted, wresp.Err())
 	}
+	if !wresp.Canceled {
+		t.Fatalf("wresp.Canceled expected true, got %+v", wresp)
+	}
 
 	// ensure the channel is closed
 	if wresp, ok = <-wch; ok {
diff --git a/clientv3/watch.go b/clientv3/watch.go
index ee43b2afeba..c4ec08fc892 100644
--- a/clientv3/watch.go
+++ b/clientv3/watch.go
@@ -461,7 +461,7 @@ func (w *watchGrpcStream) run() {
 				if ws := w.nextResume(); ws != nil {
 					wc.Send(ws.initReq.toPB())
 				}
-			case pbresp.Canceled:
+			case pbresp.Canceled && pbresp.CompactRevision == 0:
 				delete(cancelSet, pbresp.WatchId)
 				if ws, ok := w.substreams[pbresp.WatchId]; ok {
 					// signal to stream goroutine to update closingc
diff --git a/etcdserver/api/v3rpc/watch.go b/etcdserver/api/v3rpc/watch.go
index 84c0a5eac8c..a456307fea5 100644
--- a/etcdserver/api/v3rpc/watch.go
+++ b/etcdserver/api/v3rpc/watch.go
@@ -321,11 +321,13 @@ func (sws *serverWatchStream) sendLoop() {
 				}
 			}
 
+			canceled := wresp.CompactRevision != 0
 			wr := &pb.WatchResponse{
 				Header:          sws.newResponseHeader(wresp.Revision),
 				WatchId:         int64(wresp.WatchID),
 				Events:          events,
 				CompactRevision: wresp.CompactRevision,
+				Canceled:        canceled,
 			}
 
 			if _, hasId := ids[wresp.WatchID]; !hasId {
diff --git a/proxy/grpcproxy/watcher.go b/proxy/grpcproxy/watcher.go
index 7387caf4dbd..1a497462f99 100644
--- a/proxy/grpcproxy/watcher.go
+++ b/proxy/grpcproxy/watcher.go
@@ -111,6 +111,7 @@ func (w *watcher) send(wr clientv3.WatchResponse) {
 		Header:          &wr.Header,
 		Created:         wr.Created,
 		CompactRevision: wr.CompactRevision,
+		Canceled:        wr.Canceled,
 		WatchId:         w.id,
 		Events:          events,
 	})