diff --git a/embed/etcd.go b/embed/etcd.go
index 5b7a17ca99a..c5c0d2d699f 100644
--- a/embed/etcd.go
+++ b/embed/etcd.go
@@ -192,11 +192,29 @@ func (e *Etcd) Config() Config {
 func (e *Etcd) Close() {
 	e.closeOnce.Do(func() { close(e.stopc) })
 
-	// (gRPC server) stops accepting new connections,
-	// RPCs, and blocks until all pending RPCs are finished
+	timeout := 2 * time.Second
+	if e.Server != nil {
+		timeout = e.Server.Cfg.ReqTimeout()
+	}
 	for _, sctx := range e.sctxs {
 		for gs := range sctx.grpcServerC {
-			gs.GracefulStop()
+			ch := make(chan struct{})
+			go func() {
+				defer close(ch)
+				// close listeners to stop accepting new connections,
+				// will block on any existing transports
+				gs.GracefulStop()
+			}()
+			// wait until all pending RPCs are finished
+			select {
+			case <-ch:
+			case <-time.After(timeout):
+				// took too long, manually close open transports
+				// e.g. watch streams
+				gs.Stop()
+				// concurrent GracefulStop should be interrupted
+				<-ch
+			}
 		}
 	}