diff --git a/transport/src/main/java/io/netty/channel/socket/aio/AioSocketChannel.java b/transport/src/main/java/io/netty/channel/socket/aio/AioSocketChannel.java
index ef4ebbe207..ea0d809029 100755
--- a/transport/src/main/java/io/netty/channel/socket/aio/AioSocketChannel.java
+++ b/transport/src/main/java/io/netty/channel/socket/aio/AioSocketChannel.java
@@ -141,31 +141,28 @@ public class AioSocketChannel extends AbstractAioChannel implements SocketChanne
         };
     }
 
-    private static boolean expandReadBuffer(ByteBuf byteBuf) {
-        final int maxCapacity = byteBuf.maxCapacity();
+    private static void expandReadBuffer(ByteBuf byteBuf) {
+        final int writerIndex = byteBuf.writerIndex();
         final int capacity = byteBuf.capacity();
+        if (capacity != writerIndex) {
+            return;
+        }
+
+        final int maxCapacity = byteBuf.maxCapacity();
         if (capacity == maxCapacity) {
-            return false;
+            return;
         }
 
         // FIXME: Magic number
         final int increment = 4096;
 
-        final int writerIndex = byteBuf.writerIndex();
-        if (writerIndex != capacity) {
-            // No need to expand because there's a room in the buffer.
-            return false;
-        }
-
-        // Expand to maximum capacity.
         if (writerIndex + increment > maxCapacity) {
+            // Expand to maximum capacity.
             byteBuf.capacity(maxCapacity);
-            return true;
+        } else {
+            // Expand by the increment.
+            byteBuf.ensureWritableBytes(increment);
         }
-
-        // Expand by the increment.
-        byteBuf.ensureWritableBytes(increment);
-        return true;
     }
 
     @Override
diff --git a/transport/src/main/java/io/netty/channel/socket/nio/AbstractNioByteChannel.java b/transport/src/main/java/io/netty/channel/socket/nio/AbstractNioByteChannel.java
index 5b5ed33aae..0c34a19995 100755
--- a/transport/src/main/java/io/netty/channel/socket/nio/AbstractNioByteChannel.java
+++ b/transport/src/main/java/io/netty/channel/socket/nio/AbstractNioByteChannel.java
@@ -44,7 +44,7 @@ abstract class AbstractNioByteChannel extends AbstractNioChannel {
             boolean read = false;
             try {
                 expandReadBuffer(byteBuf);
-                for (;;) {
+                loop: for (;;) {
                     int localReadAmount = doReadBytes(byteBuf);
                     if (localReadAmount > 0) {
                         read = true;
@@ -52,8 +52,25 @@ abstract class AbstractNioByteChannel extends AbstractNioChannel {
                         closed = true;
                         break;
                     }
-                    if (!expandReadBuffer(byteBuf)) {
+
+                    switch (expandReadBuffer(byteBuf)) {
+                    case 0:
+                        // Read all - stop reading.
+                        break loop;
+                    case 1:
+                        // Keep reading until everything is read.
                         break;
+                    case 2:
+                        // Let the inbound handler drain the buffer and continue reading.
+                        if (read) {
+                            read = false;
+                            pipeline.fireInboundBufferUpdated();
+                            if (!byteBuf.writable()) {
+                                throw new IllegalStateException(
+                                        "an inbound handler whose buffer is full must consume at " +
+                                        "least one byte.");
+                            }
+                        }
                     }
                 }
             } catch (Throwable t) {
@@ -100,30 +117,32 @@ abstract class AbstractNioByteChannel extends AbstractNioChannel {
     protected abstract int doReadBytes(ByteBuf buf) throws Exception;
     protected abstract int doWriteBytes(ByteBuf buf, boolean lastSpin) throws Exception;
 
-    private static boolean expandReadBuffer(ByteBuf byteBuf) {
-        final int maxCapacity = byteBuf.maxCapacity();
+    // 0 - not expanded because the buffer is writable
+    // 1 - expanded because the buffer was not writable
+    // 2 - could not expand because the buffer was at its maximum although the buffer is not writable.
+    private static int expandReadBuffer(ByteBuf byteBuf) {
+        final int writerIndex = byteBuf.writerIndex();
         final int capacity = byteBuf.capacity();
+        if (capacity != writerIndex) {
+            return 0;
+        }
+
+        final int maxCapacity = byteBuf.maxCapacity();
         if (capacity == maxCapacity) {
-            return false;
+            return 2;
         }
 
         // FIXME: Magic number
         final int increment = 4096;
 
-        final int writerIndex = byteBuf.writerIndex();
-        if (writerIndex != capacity) {
-            // No need to expand because there's a room in the buffer.
-            return false;
-        }
-
-        // Expand to maximum capacity.
         if (writerIndex + increment > maxCapacity) {
+            // Expand to maximum capacity.
             byteBuf.capacity(maxCapacity);
-            return true;
+        } else {
+            // Expand by the increment.
+            byteBuf.ensureWritableBytes(increment);
         }
 
-        // Expand by the increment.
-        byteBuf.ensureWritableBytes(increment);
-        return true;
+        return 1;
     }
 }
diff --git a/transport/src/main/java/io/netty/channel/socket/oio/AbstractOioByteChannel.java b/transport/src/main/java/io/netty/channel/socket/oio/AbstractOioByteChannel.java
index ba9ac0630a..f818d6e6a5 100755
--- a/transport/src/main/java/io/netty/channel/socket/oio/AbstractOioByteChannel.java
+++ b/transport/src/main/java/io/netty/channel/socket/oio/AbstractOioByteChannel.java
@@ -40,12 +40,43 @@ abstract class AbstractOioByteChannel extends AbstractOioChannel {
             boolean closed = false;
             boolean read = false;
             try {
-                expandReadBuffer(byteBuf);
-                int localReadAmount = doReadBytes(byteBuf);
-                if (localReadAmount > 0) {
-                    read = true;
-                } else if (localReadAmount < 0) {
-                    closed = true;
+                for (;;) {
+                    int localReadAmount = doReadBytes(byteBuf);
+                    if (localReadAmount > 0) {
+                        read = true;
+                    } else if (localReadAmount < 0) {
+                        closed = true;
+                    }
+
+                    final int available = available();
+                    if (available <= 0) {
+                        break;
+                    }
+
+                    if (byteBuf.writable()) {
+                        continue;
+                    }
+
+                    final int capacity = byteBuf.capacity();
+                    final int maxCapacity = byteBuf.maxCapacity();
+                    if (capacity == maxCapacity) {
+                        if (read) {
+                            read = false;
+                            pipeline.fireInboundBufferUpdated();
+                            if (!byteBuf.writable()) {
+                                throw new IllegalStateException(
+                                        "an inbound handler whose buffer is full must consume at " +
+                                        "least one byte.");
+                            }
+                        }
+                    } else {
+                        final int writerIndex = byteBuf.writerIndex();
+                        if (writerIndex + available > maxCapacity) {
+                            byteBuf.capacity(maxCapacity);
+                        } else {
+                            byteBuf.ensureWritableBytes(available);
+                        }
+                    }
                 }
             } catch (Throwable t) {
                 if (read) {
@@ -65,38 +96,6 @@ abstract class AbstractOioByteChannel extends AbstractOioChannel {
                 }
             }
         }
-
-        private boolean expandReadBuffer(ByteBuf byteBuf) {
-            final int maxCapacity = byteBuf.maxCapacity();
-            final int capacity = byteBuf.capacity();
-            if (capacity == maxCapacity) {
-                return false;
-            }
-
-            final int available = available();
-            final int writerIndex = byteBuf.writerIndex();
-            if (available > 0) {
-                if (writerIndex + available > maxCapacity) {
-                    byteBuf.capacity(maxCapacity);
-                } else {
-                    byteBuf.ensureWritableBytes(available);
-                }
-                return true;
-            }
-
-            if (writerIndex != capacity) {
-                return false;
-            }
-
-            // FIXME: magic number
-            final int increment = 4096;
-            if (writerIndex + increment > maxCapacity) {
-                byteBuf.capacity(maxCapacity);
-            } else {
-                byteBuf.ensureWritableBytes(increment);
-            }
-            return true;
-        }
     }
 
     @Override