diff --git a/akka-stream-tests/src/test/scala/akka/stream/scaladsl/StreamRefsSpec.scala b/akka-stream-tests/src/test/scala/akka/stream/scaladsl/StreamRefsSpec.scala
index 5c4efd4fb7..791f8a601d 100644
--- a/akka-stream-tests/src/test/scala/akka/stream/scaladsl/StreamRefsSpec.scala
+++ b/akka-stream-tests/src/test/scala/akka/stream/scaladsl/StreamRefsSpec.scala
@@ -4,18 +4,21 @@
 
 package akka.stream.scaladsl
 
-import akka.NotUsed
+import akka.{ Done, NotUsed }
 import akka.actor.{ Actor, ActorIdentity, ActorLogging, ActorRef, ActorSystem, ActorSystemImpl, Identify, Props }
+import akka.actor.Status.Failure
 import akka.pattern._
 import akka.stream._
 import akka.stream.impl.streamref.{ SinkRefImpl, SourceRefImpl }
 import akka.stream.testkit.TestPublisher
+import akka.stream.testkit.Utils.TE
 import akka.stream.testkit.scaladsl._
-import akka.testkit.{ AkkaSpec, ImplicitSender, TestKit, TestProbe }
+import akka.testkit.{ AkkaSpec, TestKit, TestProbe }
 import akka.util.ByteString
 import com.typesafe.config._
 
 import scala.collection.immutable
+import scala.concurrent.Promise
 import scala.concurrent.{ Await, Future }
 import scala.concurrent.duration._
 import scala.util.control.NoStackTrace
@@ -23,13 +26,15 @@ import scala.util.control.NoStackTrace
 object StreamRefsSpec {
 
   object DataSourceActor {
-    def props(probe: ActorRef): Props =
-      Props(new DataSourceActor(probe)).withDispatcher("akka.test.stream-dispatcher")
+    def props(): Props = Props(new DataSourceActor()).withDispatcher("akka.test.stream-dispatcher")
   }
 
-  class DataSourceActor(probe: ActorRef) extends Actor with ActorLogging {
+  case class Command(cmd: String, probe: ActorRef)
+
+  class DataSourceActor() extends Actor with ActorLogging {
 
     import context.system
+    import context.dispatcher
 
     def receive = {
       case "give" =>
@@ -43,6 +48,26 @@ object StreamRefsSpec {
 
         sender() ! ref
 
+      case "give-nothing-watch" =>
+        val source: Source[String, NotUsed] = Source.future(Future.never.mapTo[String])
+        val (done: Future[Done], ref: SourceRef[String]) =
+          source.watchTermination()(Keep.right).toMat(StreamRefs.sourceRef())(Keep.both).run()
+
+        sender() ! ref
+
+        import context.dispatcher
+        done.pipeTo(sender())
+
+      case "give-only-one-watch" =>
+        val source: Source[String, NotUsed] = Source.single("hello").concat(Source.future(Future.never))
+        val (done: Future[Done], ref: SourceRef[String]) =
+          source.watchTermination()(Keep.right).toMat(StreamRefs.sourceRef())(Keep.both).run()
+
+        sender() ! ref
+
+        import context.dispatcher
+        done.pipeTo(sender())
+
       case "give-infinite" =>
         val source: Source[String, NotUsed] = Source.fromIterator(() => Iterator.from(1)).map("ping-" + _)
         val (_: NotUsed, ref: SourceRef[String]) = source.toMat(StreamRefs.sourceRef())(Keep.both).run()
@@ -57,6 +82,12 @@ object StreamRefsSpec {
         val ref = Source.empty.runWith(StreamRefs.sourceRef())
         sender() ! ref
 
+      case "give-maybe" =>
+        val ((maybe, termination), sourceRef) =
+          Source.maybe[String].watchTermination()(Keep.both).toMat(StreamRefs.sourceRef())(Keep.both).run()
+        sender() ! (maybe -> sourceRef)
+        termination.pipeTo(sender())
+
       case "give-subscribe-timeout" =>
         val ref = Source
           .repeat("is anyone there?")
@@ -65,18 +96,7 @@ object StreamRefsSpec {
           .run()
         sender() ! ref
 
-      //      case "send-bulk" =>
-      //        /*
-      //         * Here we're able to send a source to a remote recipient
-      //         * The source is a "bulk transfer one, in which we're ready to send a lot of data"
-      //         *
-      //         * For them it's a Source; for us it is a Sink we run data "into"
-      //         */
-      //        val source: Source[ByteString, NotUsed] = Source.single(ByteString("huge-file-"))
-      //        val ref: SourceRef[ByteString] = source.runWith(SourceRef.bulkTransfer())
-      //        sender() ! BulkSourceMsg(ref)
-
-      case "receive" =>
+      case Command("receive", probe) =>
         /*
          * We write out code, knowing that the other side will stream the data into it.
          *
@@ -86,12 +106,31 @@ object StreamRefsSpec {
           StreamRefs.sinkRef[String]().to(Sink.actorRef(probe, "<COMPLETE>", f => "<FAILED>: " + f.getMessage)).run()
         sender() ! sink
 
+      case Command("receive-one-cancel", probe) =>
+        // will shutdown the stream after the first element using a kill switch
+        val (sink, done) =
+          StreamRefs
+            .sinkRef[String]()
+            .viaMat(KillSwitches.single)(Keep.both)
+            .alsoToMat(Sink.head)(Keep.both)
+            .mapMaterializedValue {
+              case ((sink, ks), firstF) =>
+                // shutdown the stream after first element
+                firstF.foreach(_ => ks.shutdown())(context.dispatcher)
+                sink
+            }
+            .watchTermination()(Keep.both)
+            .to(Sink.actorRef(probe, "<COMPLETE>", f => "<FAILED>: " + f.getMessage))
+            .run()
+        sender() ! sink
+        done.pipeTo(sender())
+
       case "receive-ignore" =>
         val sink =
           StreamRefs.sinkRef[String]().to(Sink.ignore).run()
         sender() ! sink
 
-      case "receive-subscribe-timeout" =>
+      case Command("receive-subscribe-timeout", probe) =>
         val sink = StreamRefs
           .sinkRef[String]()
           .withAttributes(StreamRefAttributes.subscriptionTimeout(500.millis))
@@ -99,7 +138,7 @@ object StreamRefsSpec {
           .run()
         sender() ! sink
 
-      case "receive-32" =>
+      case Command("receive-32", probe) =>
         val (sink, driver) = StreamRefs.sinkRef[String]().toMat(TestSink.probe(context.system))(Keep.both).run()
 
         import context.dispatcher
@@ -117,22 +156,7 @@ object StreamRefsSpec {
 
         sender() ! sink
 
-      //      case "receive-bulk" =>
-      //        /*
-      //         * We write out code, knowing that the other side will stream the data into it.
-      //         * This will open a dedicated connection per transfer.
-      //         *
-      //         * For them it's a Sink; for us it's a Source.
-      //         */
-      //        val sink: SinkRef[ByteString] =
-      //          SinkRef.bulkTransferSource()
-      //            .to(Sink.actorRef(probe, "<COMPLETE>"))
-      //            .run()
-      //
-      //
-      //        sender() ! BulkSinkMsg(sink)
     }
-
   }
 
   // -------------------------
@@ -171,7 +195,7 @@ object StreamRefsSpec {
   }
 }
 
-class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSender {
+class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) {
   import StreamRefsSpec._
 
   val remoteSystem = ActorSystem("RemoteSystem", StreamRefsSpec.config())
@@ -179,55 +203,61 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
   override protected def beforeTermination(): Unit =
     TestKit.shutdownActorSystem(remoteSystem)
 
-  val p = TestProbe()
-
   // obtain the remoteActor ref via selection in order to use _real_ remoting in this test
   val remoteActor = {
-    val it = remoteSystem.actorOf(DataSourceActor.props(p.ref), "remoteActor")
+    val probe = TestProbe()(remoteSystem)
+    val it = remoteSystem.actorOf(DataSourceActor.props(), "remoteActor")
     val remoteAddress = remoteSystem.asInstanceOf[ActorSystemImpl].provider.getDefaultAddress
-    system.actorSelection(it.path.toStringWithAddress(remoteAddress)) ! Identify("hi")
-    expectMsgType[ActorIdentity].ref.get
+    system.actorSelection(it.path.toStringWithAddress(remoteAddress)).tell(Identify("hi"), probe.ref)
+    probe.expectMsgType[ActorIdentity].ref.get
   }
 
   "A SourceRef" must {
 
     "send messages via remoting" in {
-      remoteActor ! "give"
-      val sourceRef = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
 
-      sourceRef.runWith(Sink.actorRef(p.ref, "<COMPLETE>", _ => "<FAILED>"))
+      val localProbe = TestProbe()
+      sourceRef.runWith(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
 
-      p.expectMsg("hello")
-      p.expectMsg("world")
-      p.expectMsg("<COMPLETE>")
+      localProbe.expectMsg(5.seconds, "hello")
+      localProbe.expectMsg("world")
+      localProbe.expectMsg("<COMPLETE>")
     }
 
     "fail when remote source failed" in {
-      remoteActor ! "give-fail"
-      val sourceRef = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-fail", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
 
-      sourceRef.runWith(Sink.actorRef(p.ref, "<COMPLETE>", t => "<FAILED>: " + t.getMessage))
+      val localProbe = TestProbe()
+      sourceRef.runWith(Sink.actorRef(localProbe.ref, "<COMPLETE>", t => "<FAILED>: " + t.getMessage))
 
-      val f = p.expectMsgType[String]
+      val f = localProbe.expectMsgType[String]
       f should include("Remote stream (")
       // actor name here, for easier identification
       f should include("failed, reason: Booooom!")
     }
 
     "complete properly when remote source is empty" in {
+      val remoteProbe = TestProbe()(remoteSystem)
       // this is a special case since it makes sure that the remote stage is still there when we connect to it
 
-      remoteActor ! "give-complete-asap"
-      val sourceRef = expectMsgType[SourceRef[String]]
+      remoteActor.tell("give-complete-asap", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
 
-      sourceRef.runWith(Sink.actorRef(p.ref, "<COMPLETE>", _ => "<FAILED>"))
+      val localProbe = TestProbe()
+      sourceRef.runWith(Sink.actorRef(localProbe.ref, "<COMPLETE>", _ => "<FAILED>"))
 
-      p.expectMsg("<COMPLETE>")
+      localProbe.expectMsg("<COMPLETE>")
     }
 
     "respect back-pressure from (implied by target Sink)" in {
-      remoteActor ! "give-infinite"
-      val sourceRef = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-infinite", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
 
       val probe = sourceRef.runWith(TestSink.probe)
 
@@ -251,10 +281,12 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
     }
 
     "receive timeout if subscribing too late to the source ref" in {
-      remoteActor ! "give-subscribe-timeout"
-      val remoteSource: SourceRef[String] = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-subscribe-timeout", remoteProbe.ref)
+      val remoteSource: SourceRef[String] = remoteProbe.expectMsgType[SourceRef[String]]
 
       // not materializing it, awaiting the timeout...
+
       Thread.sleep(800) // the timeout is 500ms
 
       val probe = remoteSource.runWith(TestSink.probe[String](system))
@@ -270,8 +302,9 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
 
     // bug #24626
     "not receive subscription timeout when got subscribed" in {
-      remoteActor ! "give-subscribe-timeout"
-      val remoteSource: SourceRef[String] = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-subscribe-timeout", remoteProbe.ref)
+      val remoteSource: SourceRef[String] = remoteProbe.expectMsgType[SourceRef[String]]
       // materialize directly and start consuming, timeout is 500ms
       val eventualStrings: Future[immutable.Seq[String]] = remoteSource
         .throttle(1, 100.millis, 1, ThrottleMode.Shaping)
@@ -283,8 +316,9 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
 
     // bug #24934
     "not receive timeout while data is being sent" in {
-      remoteActor ! "give-infinite"
-      val remoteSource: SourceRef[String] = expectMsgType[SourceRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-infinite", remoteProbe.ref)
+      val remoteSource: SourceRef[String] = remoteProbe.expectMsgType[SourceRef[String]]
 
       val done =
         remoteSource
@@ -294,58 +328,168 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
 
       Await.result(done, 8.seconds)
     }
+
+    "pass cancellation upstream across remoting after elements passed through" in {
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-only-one-watch", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
+
+      val localProbe = TestProbe()
+      val ks =
+        sourceRef
+          .viaMat(KillSwitches.single)(Keep.right)
+          .to(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
+          .run()
+
+      localProbe.expectMsg("hello")
+      ks.shutdown()
+      localProbe.expectMsg("<COMPLETE>")
+      remoteProbe.expectMsg(Done)
+    }
+
+    "pass cancellation upstream across remoting before elements has been emitted" in {
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-nothing-watch", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
+
+      val localProbe = TestProbe()
+      val ks =
+        sourceRef
+          .viaMat(KillSwitches.single)(Keep.right)
+          .to(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
+          .run()
+
+      ks.shutdown()
+      localProbe.expectMsg("<COMPLETE>")
+      remoteProbe.expectMsg(Done)
+    }
+
+    "pass failure upstream across remoting before elements has been emitted" in {
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-nothing-watch", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
+
+      val localProbe = TestProbe()
+      val ks =
+        sourceRef
+          .viaMat(KillSwitches.single)(Keep.right)
+          .to(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
+          .run()
+
+      ks.abort(TE("det gick åt skogen"))
+      localProbe.expectMsg("<FAILED> det gick åt skogen")
+      remoteProbe.expectMsgType[Failure].cause shouldBe a[RemoteStreamRefActorTerminatedException]
+    }
+
+    "pass failure upstream across remoting after elements passed through" in {
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-only-one-watch", remoteProbe.ref)
+      val sourceRef = remoteProbe.expectMsgType[SourceRef[String]]
+
+      val localProbe = TestProbe()
+      val ks =
+        sourceRef
+          .viaMat(KillSwitches.single)(Keep.right)
+          .to(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
+          .run()
+
+      localProbe.expectMsg("hello")
+      ks.abort(TE("det gick åt pipan"))
+      localProbe.expectMsg("<FAILED> det gick åt pipan")
+      remoteProbe.expectMsgType[Failure].cause shouldBe a[RemoteStreamRefActorTerminatedException]
+    }
+
+    "handle concurrent cancel and failure" in {
+      // this is not possible to deterministically trigger but what we try to
+      // do is have a cancel in the SourceRef and a complete on the SinkRef side happen
+      // concurrently before they have managed to tell each other about it
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("give-maybe", remoteProbe.ref)
+      // this is somewhat weird, but we are local to the remote system with the remoteProbe so promise
+      // is not sent across the wire
+      val (remoteControl, sourceRef) = remoteProbe.expectMsgType[(Promise[Option[String]], SourceRef[String])]
+
+      val localProbe = TestProbe()
+      val ks =
+        sourceRef
+          .viaMat(KillSwitches.single)(Keep.right)
+          .to(Sink.actorRef(localProbe.ref, "<COMPLETE>", ex => s"<FAILED> ${ex.getMessage}"))
+          .run()
+
+      // "concurrently"
+      ks.shutdown()
+      remoteControl.success(None)
+
+      // since it is a race we can only confirm that it either completes or fails both sides
+      // if it didn't work
+      val localComplete = localProbe.expectMsgType[String]
+      localComplete should startWith("<COMPLETE>").or(startWith("<FAILED>"))
+      val remoteCompleted = remoteProbe.expectMsgType[AnyRef]
+      remoteCompleted match {
+        case Done       =>
+        case Failure(_) =>
+        case _          => fail()
+      }
+    }
+
   }
 
   "A SinkRef" must {
 
     "receive elements via remoting" in {
-
-      remoteActor ! "receive"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
 
       Source("hello" :: "world" :: Nil).to(remoteSink).run()
 
-      p.expectMsg("hello")
-      p.expectMsg("world")
-      p.expectMsg("<COMPLETE>")
+      elementProbe.expectMsg("hello")
+      elementProbe.expectMsg("world")
+      elementProbe.expectMsg("<COMPLETE>")
     }
 
     "fail origin if remote Sink gets a failure" in {
-
-      remoteActor ! "receive"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
 
       val remoteFailureMessage = "Booom!"
       Source.failed(new Exception(remoteFailureMessage)).to(remoteSink).run()
 
-      val f = p.expectMsgType[String]
+      val f = elementProbe.expectMsgType[String]
       f should include(s"Remote stream (")
       // actor name ere, for easier identification
       f should include(s"failed, reason: $remoteFailureMessage")
     }
 
     "receive hundreds of elements via remoting" in {
-      remoteActor ! "receive"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
 
       val msgs = (1 to 100).toList.map(i => s"payload-$i")
 
       Source(msgs).runWith(remoteSink)
 
-      msgs.foreach(t => p.expectMsg(t))
-      p.expectMsg("<COMPLETE>")
+      msgs.foreach(t => elementProbe.expectMsg(t))
+      elementProbe.expectMsg("<COMPLETE>")
     }
 
     "receive timeout if subscribing too late to the sink ref" in {
-      remoteActor ! "receive-subscribe-timeout"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive-subscribe-timeout", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
 
       // not materializing it, awaiting the timeout...
       Thread.sleep(800) // the timeout is 500ms
 
       val probe = TestSource.probe[String](system).to(remoteSink).run()
 
-      val failure = p.expectMsgType[String]
+      val failure = elementProbe.expectMsgType[String]
       failure should include("Remote side did not subscribe (materialize) handed out Sink reference")
 
       // the local "remote sink" should cancel, since it should notice the origin target actor is dead
@@ -354,8 +498,10 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
 
     // bug #24626
     "not receive timeout if subscribing is already done to the sink ref" in {
-      remoteActor ! "receive-subscribe-timeout"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive-subscribe-timeout", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
       Source
         .repeat("whatever")
         .throttle(1, 100.millis)
@@ -363,15 +509,16 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
         .runWith(remoteSink)
 
       (0 to 9).foreach { _ =>
-        p.expectMsg("whatever")
+        elementProbe.expectMsg("whatever")
       }
-      p.expectMsg("<COMPLETE>")
+      elementProbe.expectMsg("<COMPLETE>")
     }
 
     // bug #24934
     "not receive timeout while data is being sent" in {
-      remoteActor ! "receive-ignore"
-      val remoteSink: SinkRef[String] = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      remoteActor.tell("receive-ignore", remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
 
       val done =
         Source
@@ -386,18 +533,37 @@ class StreamRefsSpec extends AkkaSpec(StreamRefsSpec.config()) with ImplicitSend
     }
 
     "respect back -pressure from (implied by origin Sink)" in {
-      remoteActor ! "receive-32"
-      val sinkRef = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive-32", elementProbe.ref), remoteProbe.ref)
+      val sinkRef = remoteProbe.expectMsgType[SinkRef[String]]
 
       Source.repeat("hello").runWith(sinkRef)
 
       // if we get this message, it means no checks in the request/expect semantics were broken, good!
-      p.expectMsg("<COMPLETED>")
+      elementProbe.expectMsg("<COMPLETED>")
+    }
+
+    "trigger local shutdown on remote shutdown" in {
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive-one-cancel", elementProbe.ref), remoteProbe.ref)
+      val remoteSink: SinkRef[String] = remoteProbe.expectMsgType[SinkRef[String]]
+
+      val done =
+        Source.single("hello").concat(Source.future(Future.never)).watchTermination()(Keep.right).to(remoteSink).run()
+
+      elementProbe.expectMsg("hello")
+      elementProbe.expectMsg("<COMPLETE>")
+      remoteProbe.expectMsg(Done)
+      Await.result(done, 5.seconds) shouldBe Done
     }
 
     "not allow materializing multiple times" in {
-      remoteActor ! "receive"
-      val sinkRef = expectMsgType[SinkRef[String]]
+      val remoteProbe = TestProbe()(remoteSystem)
+      val elementProbe = TestProbe()(remoteSystem)
+      remoteActor.tell(Command("receive", elementProbe.ref), remoteProbe.ref)
+      val sinkRef = remoteProbe.expectMsgType[SinkRef[String]]
 
       val p1: TestPublisher.Probe[String] = TestSource.probe[String].to(sinkRef).run()
       val p2: TestPublisher.Probe[String] = TestSource.probe[String].to(sinkRef).run()
diff --git a/akka-stream/src/main/scala/akka/stream/impl/streamref/SinkRefImpl.scala b/akka-stream/src/main/scala/akka/stream/impl/streamref/SinkRefImpl.scala
index 0efc456147..45fa08d359 100644
--- a/akka-stream/src/main/scala/akka/stream/impl/streamref/SinkRefImpl.scala
+++ b/akka-stream/src/main/scala/akka/stream/impl/streamref/SinkRefImpl.scala
@@ -95,7 +95,7 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
 
       private var completedBeforeRemoteConnected: OptionVal[Try[Done]] = OptionVal.None
 
-      // Some when this side of the stream has completed/failed, and we await the Terminated() signal back from the partner
+      // When this side of the stream has completed/failed, and we await the Terminated() signal back from the partner
       // so we can safely shut down completely; This is to avoid *our* Terminated() signal to reach the partner before the
       // Complete/Fail message does, which can happen on transports such as Artery which use a dedicated lane for system messages (Terminated)
       private[this] var finishedWithAwaitingPartnerTermination: OptionVal[Try[Done]] = OptionVal.None
@@ -103,6 +103,11 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
       override def preStart(): Unit = {
         initialPartnerRef match {
           case OptionVal.Some(ref) =>
+            log.debug(
+              "[{}] Created SinkRef, pointing to remote Sink receiver: {}, local worker: {}",
+              stageActorName,
+              initialPartnerRef,
+              self.ref)
             // this will set the `partnerRef`
             observeAndValidateSender(
               ref,
@@ -110,19 +115,26 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
               "usage and complete stack trace on the issue tracker: https://github.com/akka/akka")
             tryPull()
           case OptionVal.None =>
+            log.debug(
+              "[{}] Created SinkRef with initial partner, local worker: {}, subscription timeout: {}",
+              stageActorName,
+              self.ref,
+              PrettyDuration.format(subscriptionTimeout.timeout))
             // only schedule timeout timer if partnerRef has not been resolved yet (i.e. if this instance of the Actor
             // has not been provided with a valid initialPartnerRef)
             scheduleOnce(SubscriptionTimeoutTimerKey, subscriptionTimeout.timeout)
         }
 
-        log.debug(
-          "Created SinkRef, pointing to remote Sink receiver: {}, local worker: {}",
-          initialPartnerRef,
-          self.ref)
       }
 
       def initialReceive: ((ActorRef, Any)) => Unit = {
         case (_, Terminated(ref)) =>
+          log.debug(
+            "[{}] remote terminated [{}], partnerRef: [{}], finishedWithAwaitingPartnerTermination: [{}]",
+            stageActorName,
+            ref,
+            partnerRef,
+            finishedWithAwaitingPartnerTermination)
           if (ref == getPartnerRef)
             finishedWithAwaitingPartnerTermination match {
               case OptionVal.Some(Failure(ex)) =>
@@ -143,20 +155,42 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
           if (remoteCumulativeDemandReceived < d) {
             remoteCumulativeDemandReceived = d
             log.debug(
-              "Received cumulative demand [{}], consumable demand: [{}]",
+              "[{}] Received cumulative demand [{}], consumable demand: [{}]",
+              stageActorName,
               StreamRefsProtocol.CumulativeDemand(d),
               remoteCumulativeDemandReceived - remoteCumulativeDemandConsumed)
           }
 
           tryPull()
 
-        case (_, _) => // keep the compiler happy (stage actor receive is total)
+        case (sender, StreamRefsProtocol.RemoteStreamCompleted(_)) =>
+          // unless we already sent a completed/failed downstream and are awaiting Terminated as ack for that
+          if (finishedWithAwaitingPartnerTermination.isEmpty) {
+            log.debug("[{}] Remote downstream cancelled", stageActorName)
+            self.unwatch(sender)
+            // remote only sent this after unwatching so cancelling is ok
+            cancelStage(SubscriptionWithCancelException.NoMoreElementsNeeded)
+            sender ! StreamRefsProtocol.Ack
+          }
+
+        case (sender, StreamRefsProtocol.RemoteStreamFailure(msg)) =>
+          // unless we already sent a completed/failed downstream and are awaiting Terminated as ack for that
+          if (finishedWithAwaitingPartnerTermination.isEmpty) {
+            log.debug("[{}] Remote downstream failed: {}", stageActorName, msg)
+            self.unwatch(sender)
+            // remote only sent this after unwatching so cancelling is ok
+            cancelStage(RemoteStreamRefActorTerminatedException(s"Remote downstream failed: $msg"))
+            sender ! StreamRefsProtocol.Ack
+          }
+
+        case (sender, msg) => // keep the compiler happy (stage actor receive is total)
+          log.debug("[{}] Unexpected message {} from {}", stageActorName, msg, sender)
       }
 
       override def onPush(): Unit = {
         val elem = grabSequenced(in)
         getPartnerRef ! elem
-        log.debug("Sending sequenced: {} to {}", elem, getPartnerRef)
+        log.debug("[{}] Sending sequenced: {} to {}", stageActorName, elem, getPartnerRef)
         tryPull()
       }
 
@@ -167,6 +201,7 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
 
       override protected def onTimer(timerKey: Any): Unit = timerKey match {
         case SubscriptionTimeoutTimerKey =>
+          log.debug("[{}] Subscription timed out", stageActorName)
           val ex = StreamRefSubscriptionTimeoutException(
             // we know the future has been competed by now, since it is in preStart
             s"[$stageActorName] Remote side did not subscribe (materialize) handed out Source reference [$ref], " +
@@ -182,6 +217,7 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
       }
 
       override def onUpstreamFailure(ex: Throwable): Unit = {
+        log.debug("[{}] Upstream failure, partnerRef [{}]", stageActorName, partnerRef)
         partnerRef match {
           case OptionVal.Some(ref) =>
             ref ! StreamRefsProtocol.RemoteStreamFailure(ex.getMessage)
@@ -196,7 +232,8 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
         }
       }
 
-      override def onUpstreamFinish(): Unit =
+      override def onUpstreamFinish(): Unit = {
+        log.debug("[{}] Upstream finish, partnerRef [{}]", stageActorName, partnerRef)
         partnerRef match {
           case OptionVal.Some(ref) =>
             ref ! StreamRefsProtocol.RemoteStreamCompleted(remoteCumulativeDemandConsumed)
@@ -207,6 +244,7 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
             // not terminating on purpose, since other side may subscribe still and then we want to complete it
             setKeepGoing(true)
         }
+      }
 
       @throws[InvalidPartnerActorException]
       def observeAndValidateSender(partner: ActorRef, failureMsg: String): Unit = {
@@ -219,14 +257,15 @@ private[stream] final class SinkRefStageImpl[In] private[akka] (val initialPartn
           completedBeforeRemoteConnected match {
             case OptionVal.Some(scala.util.Failure(ex)) =>
               log.warning(
-                "Stream already terminated with exception before remote side materialized, sending failure: {}",
+                "[{}] Stream already terminated with exception before remote side materialized, sending failure: {}",
+                stageActorName,
                 ex)
               partner ! StreamRefsProtocol.RemoteStreamFailure(ex.getMessage)
               finishedWithAwaitingPartnerTermination = OptionVal(Failure(ex))
               setKeepGoing(true) // we will terminate once partner ref has Terminated (to avoid racing Terminated with completion message)
 
             case OptionVal.Some(scala.util.Success(Done)) =>
-              log.warning("Stream already completed before remote side materialized, failing now.")
+              log.warning("[{}] Stream already completed before remote side materialized, failing now.", stageActorName)
               partner ! StreamRefsProtocol.RemoteStreamCompleted(remoteCumulativeDemandConsumed)
               finishedWithAwaitingPartnerTermination = OptionVal(Success(Done))
               setKeepGoing(true) // we will terminate once partner ref has Terminated (to avoid racing Terminated with completion message)
diff --git a/akka-stream/src/main/scala/akka/stream/impl/streamref/SourceRefImpl.scala b/akka-stream/src/main/scala/akka/stream/impl/streamref/SourceRefImpl.scala
index 137ebe13f6..a6cb2ab795 100644
--- a/akka-stream/src/main/scala/akka/stream/impl/streamref/SourceRefImpl.scala
+++ b/akka-stream/src/main/scala/akka/stream/impl/streamref/SourceRefImpl.scala
@@ -64,6 +64,29 @@ private[stream] final case class SourceRefImpl[T](initialPartnerRef: ActorRef) e
         highWatermark - remainingRequested
       else 0
   }
+
+  private sealed trait State
+  private sealed trait WeKnowPartner extends State {
+    def partner: ActorRef
+  }
+
+  // we are the "origin", and awaiting the other side to start when we'll receive this ref
+  private case object AwaitingPartner extends State
+  // we're the "remote" for an already active Source on the other side (the "origin")
+  private case class AwaitingSubscription(partner: ActorRef) extends WeKnowPartner
+  // subscription aquired and up and running
+  private final case class Running(partner: ActorRef) extends WeKnowPartner
+
+  // downstream cancelled or failed, waiting for remote upstream to ack
+  private final case class WaitingForCancelAck(partner: ActorRef, cause: Throwable) extends WeKnowPartner
+  // upstream completed, we are waiting to allow
+  private final case class UpstreamCompleted(partner: ActorRef) extends WeKnowPartner
+  private final case class UpstreamTerminated(partner: ActorRef) extends State
+
+  val SubscriptionTimeoutTimerKey = "SubscriptionTimeoutKey"
+  val DemandRedeliveryTimerKey = "DemandRedeliveryTimerKey"
+  val TerminationDeadlineTimerKey = "TerminationDeadlineTimerKey"
+  val CancellationDeadlineTimerKey = "CancellationDeadlineTimerKey"
 }
 
 /**
@@ -75,8 +98,7 @@ private[stream] final case class SourceRefImpl[T](initialPartnerRef: ActorRef) e
 @InternalApi
 private[stream] final class SourceRefStageImpl[Out](val initialPartnerRef: OptionVal[ActorRef])
     extends GraphStageWithMaterializedValue[SourceShape[Out], SinkRef[Out]] { stage =>
-  import SourceRefStageImpl.ActorRefStage
-  import SourceRefStageImpl.WatermarkRequestStrategy
+  import SourceRefStageImpl._
 
   val out: Outlet[Out] = Outlet[Out](s"${Logging.simpleName(getClass)}.out")
   override def shape = SourceShape.of(out)
@@ -128,16 +150,20 @@ private[stream] final class SourceRefStageImpl[Out](val initialPartnerRef: Optio
 
       override protected val stageActorName: String = streamRefsMaster.nextSourceRefStageName()
       private[this] val self: GraphStageLogic.StageActor =
-        getEagerStageActor(eagerMaterializer, poisonPillCompatibility = false)(initialReceive)
+        getEagerStageActor(eagerMaterializer, poisonPillCompatibility = false)(receiveRemoteMessage)
       override val ref: ActorRef = self.ref
       private[this] implicit def selfSender: ActorRef = ref
 
-      val SubscriptionTimeoutTimerKey = "SubscriptionTimeoutKey"
-      val DemandRedeliveryTimerKey = "DemandRedeliveryTimerKey"
-      val TerminationDeadlineTimerKey = "TerminationDeadlineTimerKey"
-
       // demand management ---
-      private var completed = false
+      private var state: State = initialPartnerRef match {
+        case OptionVal.Some(ref) =>
+          // this means we're the "remote" for an already active Source on the other side (the "origin")
+          self.watch(ref)
+          AwaitingSubscription(ref)
+        case OptionVal.None =>
+          // we are the "origin", and awaiting the other side to start when we'll receive their partherRef
+          AwaitingPartner
+      }
 
       private var expectingSeqNr: Long = 0L
       private var localCumulativeDemand: Long = 0L
@@ -145,21 +171,16 @@ private[stream] final class SourceRefStageImpl[Out](val initialPartnerRef: Optio
 
       private val receiveBuffer = FixedSizeBuffer[Out](bufferCapacity)
 
-      private val requestStrategy: WatermarkRequestStrategy = WatermarkRequestStrategy(
-        highWatermark = receiveBuffer.capacity)
+      private val requestStrategy = WatermarkRequestStrategy(highWatermark = receiveBuffer.capacity)
       // end of demand management ---
 
-      // initialized with the originRef if present, that means we're the "remote" for an already active Source on the other side (the "origin")
-      // null otherwise, in which case we allocated first -- we are the "origin", and awaiting the other side to start when we'll receive this ref
-      private var partnerRef: OptionVal[ActorRef] = OptionVal.None
-      private def getPartnerRef = partnerRef.get
-
       override def preStart(): Unit = {
-        log.debug("[{}] Allocated receiver: {}", stageActorName, self.ref)
-        if (initialPartnerRef.isDefined) // this will set the partnerRef
-          observeAndValidateSender(
-            initialPartnerRef.get,
-            "Illegal initialPartnerRef! This would be a bug in the SourceRef usage or impl.")
+        log.debug(
+          "[{}] Starting up with, self ref: {}, state: {}, subscription timeout: {}",
+          stageActorName,
+          self.ref,
+          state,
+          PrettyDuration.format(subscriptionTimeout.timeout))
 
         // This timer will be cancelled if we receive the handshake from the remote SinkRef
         // either created in this method and provided as self.ref as initialPartnerRef
@@ -172,103 +193,312 @@ private[stream] final class SourceRefStageImpl[Out](val initialPartnerRef: Optio
         triggerCumulativeDemand()
       }
 
-      def triggerCumulativeDemand(): Unit = {
-        val i = receiveBuffer.remainingCapacity - localRemainingRequested
-        if (partnerRef.isDefined && i > 0) {
-          val addDemand = requestStrategy.requestDemand(receiveBuffer.used + localRemainingRequested)
-          // only if demand has increased we shoot it right away
-          // otherwise it's the same demand level, so it'd be triggered via redelivery anyway
-          if (addDemand > 0) {
-            localCumulativeDemand += addDemand
-            localRemainingRequested += addDemand
-            val demand = StreamRefsProtocol.CumulativeDemand(localCumulativeDemand)
-
-            log.debug("[{}] Demanding until [{}] (+{})", stageActorName, localCumulativeDemand, addDemand)
-            getPartnerRef ! demand
-            scheduleDemandRedelivery()
-          }
-        }
-      }
-
-      def scheduleDemandRedelivery(): Unit =
-        scheduleOnce(DemandRedeliveryTimerKey, demandRedeliveryInterval)
-
-      override protected def onTimer(timerKey: Any): Unit = timerKey match {
-        case SubscriptionTimeoutTimerKey =>
-          val ex = StreamRefSubscriptionTimeoutException(
-            // we know the future has been competed by now, since it is in preStart
-            s"[$stageActorName] Remote side did not subscribe (materialize) handed out Sink reference [$ref]," +
-            s"within subscription timeout: ${PrettyDuration.format(subscriptionTimeout.timeout)}!")
-
-          throw ex // this will also log the exception, unlike failStage; this should fail rarely, but would be good to have it "loud"
-
-        case DemandRedeliveryTimerKey =>
-          log.debug("[{}] Scheduled re-delivery of demand until [{}]", stageActorName, localCumulativeDemand)
-          getPartnerRef ! StreamRefsProtocol.CumulativeDemand(localCumulativeDemand)
-          scheduleDemandRedelivery()
-
-        case TerminationDeadlineTimerKey =>
-          failStage(RemoteStreamRefActorTerminatedException(
-            s"Remote partner [$partnerRef] has terminated unexpectedly and no clean completion/failure message was received " +
-            "(possible reasons: network partition or subscription timeout triggered termination of partner). Tearing down."))
-      }
-
-      def initialReceive: ((ActorRef, Any)) => Unit = {
+      def receiveRemoteMessage: ((ActorRef, Any)) => Unit = {
         case (sender, msg @ StreamRefsProtocol.OnSubscribeHandshake(remoteRef)) =>
-          cancelTimer(SubscriptionTimeoutTimerKey)
-          observeAndValidateSender(remoteRef, "Illegal sender in SequencedOnNext")
-          log.debug("[{}] Received handshake {} from {}", stageActorName, msg, sender)
+          state match {
+            case AwaitingPartner =>
+              cancelTimer(SubscriptionTimeoutTimerKey)
+              log.debug(
+                "[{}] Received on subscribe handshake {} while awaiting partner from {}",
+                stageActorName,
+                msg,
+                remoteRef)
+              state = Running(remoteRef)
+              self.watch(remoteRef)
+              triggerCumulativeDemand()
+            case AwaitingSubscription(partner) =>
+              verifyPartner(sender, partner)
+              cancelTimer(SubscriptionTimeoutTimerKey)
+              log.debug(
+                "[{}] Received on subscribe handshake {} while awaiting subscription from {}",
+                stageActorName,
+                msg,
+                remoteRef)
+              state = Running(remoteRef)
+              triggerCumulativeDemand()
 
-          triggerCumulativeDemand()
+            case other =>
+              throw new IllegalStateException(s"[$stageActorName] Got unexpected $msg in state $other")
+          }
 
         case (sender, msg @ StreamRefsProtocol.SequencedOnNext(seqNr, payload: Out @unchecked)) =>
-          observeAndValidateSender(sender, "Illegal sender in SequencedOnNext")
           observeAndValidateSequenceNr(seqNr, "Illegal sequence nr in SequencedOnNext")
-          log.debug("[{}] Received seq {} from {}", stageActorName, msg, sender)
+          state match {
+            case AwaitingSubscription(partner) =>
+              verifyPartner(sender, partner)
 
-          onReceiveElement(payload)
-          triggerCumulativeDemand()
+              log.debug("[{}] Received seq {} from {}", stageActorName, msg, sender)
+              state = Running(partner)
+              onReceiveElement(payload)
+              triggerCumulativeDemand()
+
+            case Running(partner) =>
+              verifyPartner(sender, partner)
+              onReceiveElement(payload)
+              triggerCumulativeDemand()
+
+            case AwaitingPartner =>
+              throw new IllegalStateException(s"[$stageActorName] Got $msg from $sender while AwaitingPartner")
+
+            case WaitingForCancelAck(partner, _) =>
+              // awaiting cancellation ack from remote
+              verifyPartner(sender, partner)
+              log.warning(
+                "[{}] Got element from remote but downstream cancelled, dropping element of type {}",
+                stageActorName,
+                payload.getClass)
+
+            case UpstreamCompleted(partner) =>
+              verifyPartner(sender, partner)
+              throw new IllegalStateException(
+                s"[$stageActorName] Got completion and then received more elements from $sender, this is not supposed to happen.")
+
+            case UpstreamTerminated(partner) =>
+              verifyPartner(sender, partner)
+              log.debug("[{}] Received element after partner terminated")
+              onReceiveElement(payload)
+
+          }
 
         case (sender, StreamRefsProtocol.RemoteStreamCompleted(seqNr)) =>
-          observeAndValidateSender(sender, "Illegal sender in RemoteSinkCompleted")
           observeAndValidateSequenceNr(seqNr, "Illegal sequence nr in RemoteSinkCompleted")
-          log.debug("[{}] The remote stream has completed, completing as well...", stageActorName)
-
-          self.unwatch(sender)
-          completed = true
-          tryPush()
+          state match {
+            case Running(partner) =>
+              // upstream completed, continue running until we have emitted every element in buffer
+              // or downstream cancels
+              verifyPartner(sender, partner)
+              log.debug(
+                "[{}] The remote stream has completed, emitting {} elements left in buffer before completing",
+                stageActorName,
+                receiveBuffer.used)
+              self.unwatch(sender)
+              state = UpstreamCompleted(partner)
+              tryPush()
+            case WaitingForCancelAck(_, _) =>
+              // upstream completed while we were waiting for it to receive cancellation and ack
+              // upstream may stop without seeing cancellation, but we may not see termination
+              // let the cancel timeout hit
+              log.debug("[{}] Upstream completed while waiting for cancel ack", stageActorName)
+            case other =>
+              // UpstreamCompleted, AwaitingPartner or AwaitingSubscription(_) all means a bug here
+              throw new IllegalStateException(
+                s"[$stageActorName] Saw RemoteStreamCompleted($seqNr) while in state $other, should never happen")
+          }
 
         case (sender, StreamRefsProtocol.RemoteStreamFailure(reason)) =>
-          observeAndValidateSender(sender, "Illegal sender in RemoteSinkFailure")
-          log.warning("[{}] The remote stream has failed, failing (reason: {})", stageActorName, reason)
+          state match {
+            case weKnoPartner: WeKnowPartner =>
+              val partner = weKnoPartner.partner
+              verifyPartner(sender, partner)
+              log.debug("[{}] The remote stream has failed, failing (reason: {})", stageActorName, reason)
+              failStage(
+                RemoteStreamRefActorTerminatedException(
+                  s"[$stageActorName] Remote stream (${sender.path}) failed, reason: $reason"))
+            case other =>
+              throw new IllegalStateException(
+                s"[$stageActorName] got RemoteStreamFailure($reason) when in state $other, should never happen")
+          }
 
-          self.unwatch(sender)
-          failStage(RemoteStreamRefActorTerminatedException(s"Remote stream (${sender.path}) failed, reason: $reason"))
+        case (sender, StreamRefsProtocol.Ack) =>
+          state match {
+            case WaitingForCancelAck(partner, cause) =>
+              verifyPartner(sender, partner)
+              log.debug(s"[$stageActorName] Got cancellation ack from remote, canceling", stageActorName)
+              cancelStage(cause)
+            case other =>
+              throw new IllegalStateException(s"[$stageActorName] Got an Ack when in state $other")
+          }
 
         case (_, Terminated(p)) =>
-          partnerRef match {
-            case OptionVal.Some(`p`) =>
+          state match {
+            case weKnowPartner: WeKnowPartner =>
+              if (weKnowPartner.partner != p)
+                throw RemoteStreamRefActorTerminatedException(
+                  s"[$stageActorName] Received UNEXPECTED Terminated($p) message! " +
+                  s"This actor was NOT our trusted remote partner, which was: ${weKnowPartner.partner}. Tearing down.")
               // we need to start a delayed shutdown in case we were network partitioned and the final signal complete/fail
               // will never reach us; so after the given timeout we need to forcefully terminate this side of the stream ref
               // the other (sending) side terminates by default once it gets a Terminated signal so no special handling is needed there.
               scheduleOnce(TerminationDeadlineTimerKey, finalTerminationSignalDeadline)
+              log.debug(
+                "[{}] Partner terminated, starting delayed shutdown, deadline: [{}]",
+                stageActorName,
+                finalTerminationSignalDeadline)
+              state = UpstreamTerminated(weKnowPartner.partner)
+            case weDontKnowPartner =>
+              throw new IllegalStateException(
+                s"[$stageActorName] Unexpected deathwatch message for $p before we knew partner ref, state $weDontKnowPartner")
 
-            case _ =>
-              // this should not have happened! It should be impossible that we watched some other actor
-              failStage(
-                RemoteStreamRefActorTerminatedException(
-                  s"Received UNEXPECTED Terminated($p) message! " +
-                  s"This actor was NOT our trusted remote partner, which was: $getPartnerRef. Tearing down."))
           }
-
-        case (_, _) => // keep the compiler happy (stage actor receive is total)
+        case (sender, msg) =>
+          // should never happen but keep the compiler happy (stage actor receive is total)
+          throw new IllegalStateException(s"[$stageActorName] Unexpected message in state $state: $msg from $sender")
       }
 
-      def tryPush(): Unit =
+      override protected def onTimer(timerKey: Any): Unit = timerKey match {
+        case SubscriptionTimeoutTimerKey =>
+          state match {
+            case AwaitingPartner | AwaitingSubscription(_) =>
+              val ex = StreamRefSubscriptionTimeoutException(
+                // we know the future has been competed by now, since it is in preStart
+                s"[$stageActorName] Remote side did not subscribe (materialize) handed out Sink reference [$ref]," +
+                s"within subscription timeout: ${PrettyDuration.format(subscriptionTimeout.timeout)}!")
+
+              throw ex // this will also log the exception, unlike failStage; this should fail rarely, but would be good to have it "loud"
+            case other =>
+              // this is fine
+              log.debug("[{}] Ignoring subscription timeout in state [{}]", stageActorName, other)
+          }
+
+        case DemandRedeliveryTimerKey =>
+          state match {
+            case Running(ref) =>
+              log.debug("[{}] Scheduled re-delivery of demand until [{}]", stageActorName, localCumulativeDemand)
+              ref ! StreamRefsProtocol.CumulativeDemand(localCumulativeDemand)
+              scheduleDemandRedelivery()
+
+            case other =>
+              log.debug("[{}] Ignoring demand redelivery timeout in state [{}]", stageActorName, other)
+          }
+
+        case TerminationDeadlineTimerKey =>
+          state match {
+            case UpstreamTerminated(partner) =>
+              log.debug(
+                "[{}] Remote partner [{}] has terminated unexpectedly and no clean completion/failure message was received",
+                stageActorName,
+                partner)
+              failStage(RemoteStreamRefActorTerminatedException(
+                s"[$stageActorName] Remote partner [$partner] has terminated unexpectedly and no clean completion/failure message was received " +
+                "(possible reasons: network partition or subscription timeout triggered termination of partner). Tearing down."))
+
+            case AwaitingPartner =>
+              log.debug("[{}] Downstream cancelled, but timeout hit before we saw a partner", stageActorName)
+              cancelStage(SubscriptionWithCancelException.NoMoreElementsNeeded)
+
+            case other =>
+              throw new IllegalStateException(s"TerminationDeadlineTimerKey can't happen in state $other")
+          }
+
+        case CancellationDeadlineTimerKey =>
+          state match {
+            case WaitingForCancelAck(partner, cause) =>
+              log.debug(
+                "[{}] Waiting for remote ack from [{}] for downstream failure timed out, failing stage with original downstream failure",
+                stageActorName,
+                partner)
+              cancelStage(cause)
+
+            case other =>
+              throw new IllegalStateException(
+                s"[$stageActorName] CancellationDeadlineTimerKey can't happen in state $other")
+          }
+      }
+
+      override def onDownstreamFinish(cause: Throwable): Unit = {
+        state match {
+          case Running(ref) =>
+            triggerCancellationExchange(ref, cause)
+
+          case AwaitingPartner =>
+            // we can't do a graceful cancellation dance in this case, wait for partner and then cancel
+            // or timeout if we never get a partner
+            scheduleOnce(TerminationDeadlineTimerKey, finalTerminationSignalDeadline)
+
+          case AwaitingSubscription(ref) =>
+            // we didn't get an a first demand yet but have access to the partner - try a cancellation dance
+            triggerCancellationExchange(ref, cause)
+
+          case UpstreamCompleted(_) =>
+            // we saw upstream complete so let's just complete
+            if (receiveBuffer.nonEmpty)
+              log.debug(
+                "[{}] Downstream cancelled with elements [{}] in buffer, dropping elements",
+                stageActorName,
+                receiveBuffer.used)
+            cause match {
+              case _: SubscriptionWithCancelException => completeStage()
+              case failure                            => failStage(failure)
+            }
+
+          case WaitingForCancelAck(_, _) =>
+            // downstream can't finish twice
+            throw new UnsupportedOperationException(
+              s"[$stageActorName] Didn't expect state $state when downstream finished with $cause")
+
+          case UpstreamTerminated(_) =>
+            log.debug("[{}] Downstream cancelled with elements [{}] in buffer", stageActorName, receiveBuffer.used)
+            if (receiveBuffer.isEmpty)
+              failStage(RemoteStreamRefActorTerminatedException(s"[$stageActorName] unexpectedly terminated"))
+            else
+              // if there are elements left in the buffer we try to emit those
+              tryPush()
+        }
+      }
+
+      private def triggerCancellationExchange(partner: ActorRef, cause: Throwable): Unit = {
+        if (receiveBuffer.nonEmpty)
+          log.debug("Downstream cancelled with elements [{}] in buffer, dropping elements", receiveBuffer.used)
+        val message = cause match {
+          case _: SubscriptionWithCancelException.NonFailureCancellation =>
+            log.debug("[{}] Deferred stop on downstream cancel", stageActorName)
+            StreamRefsProtocol.RemoteStreamCompleted(expectingSeqNr) // seNr not really used in this case
+
+          case streamFailure =>
+            log.debug("[{}] Deferred stop on downstream failure: {}", stageActorName, streamFailure)
+            StreamRefsProtocol.RemoteStreamFailure("Downstream failed")
+        }
+        // sending the cancellation means it is ok for the partner to terminate
+        // we either get a response or hit a timeout and shutdown
+        self.unwatch(partner)
+        partner ! message
+        state = WaitingForCancelAck(partner, cause)
+        scheduleOnce(CancellationDeadlineTimerKey, subscriptionTimeout.timeout)
+        setKeepGoing(true)
+      }
+
+      def triggerCumulativeDemand(): Unit = {
+        val i = receiveBuffer.remainingCapacity - localRemainingRequested
+        if (i > 0) {
+          val addDemand = requestStrategy.requestDemand(receiveBuffer.used + localRemainingRequested)
+          // only if demand has increased we shoot it right away
+          // otherwise it's the same demand level, so it'd be triggered via redelivery anyway
+          if (addDemand > 0) {
+            def sendDemand(partner: ActorRef): Unit = {
+              localCumulativeDemand += addDemand
+              localRemainingRequested += addDemand
+              val demand = StreamRefsProtocol.CumulativeDemand(localCumulativeDemand)
+              partner ! demand
+              scheduleDemandRedelivery()
+            }
+            state match {
+              case Running(partner) =>
+                log.debug("[{}] Demanding until [{}] (+{})", stageActorName, localCumulativeDemand, addDemand)
+                sendDemand(partner)
+
+              case AwaitingSubscription(partner) =>
+                log.debug(
+                  "[{}] Demanding, before subscription seen, until [{}] (+{})",
+                  stageActorName,
+                  localCumulativeDemand,
+                  addDemand)
+                sendDemand(partner)
+              case other =>
+                log.debug("[{}] Partner ref not set up in state {}, demanding elements deferred", stageActorName, other)
+            }
+          }
+        }
+      }
+
+      private def tryPush(): Unit =
         if (receiveBuffer.nonEmpty && isAvailable(out)) {
           val element = receiveBuffer.dequeue()
           push(out, element)
-        } else if (receiveBuffer.isEmpty && completed) completeStage()
+        } else if (receiveBuffer.isEmpty)
+          state match {
+            case UpstreamCompleted(_) => completeStage()
+            case _                    => // all other are ok
+          }
 
       private def onReceiveElement(payload: Out): Unit = {
         localRemainingRequested -= 1
@@ -284,32 +514,30 @@ private[stream] final class SourceRefStageImpl[Out](val initialPartnerRef: Optio
         }
       }
 
-      /** @throws InvalidPartnerActorException when partner ref is invalid */
-      def observeAndValidateSender(partner: ActorRef, msg: String): Unit =
-        partnerRef match {
-          case OptionVal.None =>
-            log.debug("Received first message from {}, assuming it to be the remote partner for this stage", partner)
-            partnerRef = OptionVal(partner)
-            self.watch(partner)
-
-          case OptionVal.Some(p) =>
-            if (partner != p) {
-              val ex = InvalidPartnerActorException(partner, getPartnerRef, msg)
-              partner ! StreamRefsProtocol.RemoteStreamFailure(ex.getMessage)
-              throw ex
-            } // else, ref is valid and we don't need to do anything with it
-        }
+      private def verifyPartner(sender: ActorRef, partner: ActorRef): Unit = {
+        if (sender != partner)
+          throw InvalidPartnerActorException(
+            partner,
+            sender,
+            s"[$stageActorName] Received message from UNEXPECTED sender [$sender]! " +
+            s"This actor is NOT our trusted remote partner, which is [$partner]. Tearing down.")
+      }
 
       /** @throws InvalidSequenceNumberException when sequence number is invalid */
-      def observeAndValidateSequenceNr(seqNr: Long, msg: String): Unit =
+      private def observeAndValidateSequenceNr(seqNr: Long, msg: String): Unit =
         if (isInvalidSequenceNr(seqNr)) {
+          log.warning("[{}] {}, expected {} but was {}", stageActorName, msg, expectingSeqNr, seqNr)
           throw InvalidSequenceNumberException(expectingSeqNr, seqNr, msg)
         } else {
           expectingSeqNr += 1
         }
-      def isInvalidSequenceNr(seqNr: Long): Boolean =
+
+      private def isInvalidSequenceNr(seqNr: Long): Boolean =
         seqNr != expectingSeqNr
 
+      private def scheduleDemandRedelivery(): Unit =
+        scheduleOnce(DemandRedeliveryTimerKey, demandRedeliveryInterval)
+
       setHandler(out, this)
     }
     (logic, SinkRefImpl(logic.ref))
diff --git a/akka-stream/src/main/scala/akka/stream/impl/streamref/StreamRefsProtocol.scala b/akka-stream/src/main/scala/akka/stream/impl/streamref/StreamRefsProtocol.scala
index c9e3af12b4..2a89a21caa 100644
--- a/akka-stream/src/main/scala/akka/stream/impl/streamref/StreamRefsProtocol.scala
+++ b/akka-stream/src/main/scala/akka/stream/impl/streamref/StreamRefsProtocol.scala
@@ -39,13 +39,19 @@ private[akka] object StreamRefsProtocol {
       with DeadLetterSuppression
 
   /**
-   * INTERNAL API: Sent to a the receiver side of a stream ref, once the sending side of the SinkRef gets signalled a Failure.
+   * INTERNAL API
+   *
+   * Sent to a the receiver side of a stream ref, once the sending side of the SinkRef gets signalled a Failure.
+   * Sent to the sender of a stream if receiver downstream failed.
    */
   @InternalApi
   private[akka] final case class RemoteStreamFailure(msg: String) extends StreamRefsProtocol
 
   /**
-   * INTERNAL API: Sent to a the receiver side of a stream ref, once the sending side of the SinkRef gets signalled a completion.
+   * INTERNAL API
+   *
+   * Sent to a the receiver side of a stream ref, once the sending side of the SinkRef gets signalled a completion.
+   * Sent to the sender of a stream ref if receiver downstream cancelled.
    */
   @InternalApi
   private[akka] final case class RemoteStreamCompleted(seqNr: Long) extends StreamRefsProtocol
@@ -60,4 +66,12 @@ private[akka] object StreamRefsProtocol {
     if (seqNr <= 0) throw ReactiveStreamsCompliance.numberOfElementsInRequestMustBePositiveException
   }
 
+  /**
+   * INTERNAL API
+   *
+   * Ack that failure or completion has been seen and the remote side can stop
+   */
+  @InternalApi
+  private[akka] final case object Ack extends StreamRefsProtocol with DeadLetterSuppression
+
 }
diff --git a/akka-stream/src/main/scala/akka/stream/serialization/StreamRefSerializer.scala b/akka-stream/src/main/scala/akka/stream/serialization/StreamRefSerializer.scala
index a9f55b104f..5e21921451 100644
--- a/akka-stream/src/main/scala/akka/stream/serialization/StreamRefSerializer.scala
+++ b/akka-stream/src/main/scala/akka/stream/serialization/StreamRefSerializer.scala
@@ -26,6 +26,7 @@ private[akka] final class StreamRefSerializer(val system: ExtendedActorSystem)
   private[this] val SourceRefManifest = "E"
   private[this] val SinkRefManifest = "F"
   private[this] val OnSubscribeHandshakeManifest = "G"
+  private[this] val AckManifest = "H"
 
   override def manifest(o: AnyRef): String = o match {
     // protocol
@@ -41,6 +42,7 @@ private[akka] final class StreamRefSerializer(val system: ExtendedActorSystem)
     //    case _: MaterializedSourceRef[_]                 => SourceRefManifest
     case _: SinkRefImpl[_] => SinkRefManifest
     //    case _: MaterializedSinkRef[_]                   => SinkRefManifest
+    case StreamRefsProtocol.Ack => AckManifest
   }
 
   override def toBinary(o: AnyRef): Array[Byte] = o match {
@@ -57,6 +59,7 @@ private[akka] final class StreamRefSerializer(val system: ExtendedActorSystem)
     //    case ref: MaterializedSinkRef[_]                 => ??? // serializeSinkRef(ref).toByteArray
     case ref: SourceRefImpl[_] => serializeSourceRef(ref).toByteArray
     //    case ref: MaterializedSourceRef[_]               => serializeSourceRef(ref.).toByteArray
+    case StreamRefsProtocol.Ack => Array.emptyByteArray
   }
 
   override def fromBinary(bytes: Array[Byte], manifest: String): AnyRef = manifest match {
@@ -69,6 +72,7 @@ private[akka] final class StreamRefSerializer(val system: ExtendedActorSystem)
     // refs
     case SinkRefManifest   => deserializeSinkRef(bytes)
     case SourceRefManifest => deserializeSourceRef(bytes)
+    case AckManifest       => StreamRefsProtocol.Ack
   }
 
   // -----