diff --git a/src/main/java/org/jboss/netty/channel/local/DefaultLocalChannel.java b/src/main/java/org/jboss/netty/channel/local/DefaultLocalChannel.java
index 1a05490ec6..f5d8ee2f90 100644
--- a/src/main/java/org/jboss/netty/channel/local/DefaultLocalChannel.java
+++ b/src/main/java/org/jboss/netty/channel/local/DefaultLocalChannel.java
@@ -20,10 +20,11 @@ import static org.jboss.netty.channel.Channels.*;
 import java.nio.channels.ClosedChannelException;
 import java.nio.channels.NotYetConnectedException;
 import java.util.Queue;
-import java.util.concurrent.atomic.AtomicBoolean;
+import java.util.concurrent.atomic.AtomicInteger;
 
 import org.jboss.netty.channel.AbstractChannel;
 import org.jboss.netty.channel.ChannelConfig;
+import org.jboss.netty.channel.ChannelException;
 import org.jboss.netty.channel.ChannelFactory;
 import org.jboss.netty.channel.ChannelFuture;
 import org.jboss.netty.channel.ChannelPipeline;
@@ -41,9 +42,16 @@ import org.jboss.netty.util.internal.ThreadLocalBoolean;
  */
 final class DefaultLocalChannel extends AbstractChannel implements LocalChannel {
 
+    // TODO Move the state management up to AbstractChannel to remove duplication.
+    private static final int ST_OPEN = 0;
+    private static final int ST_BOUND = 1;
+    private static final int ST_CONNECTED = 2;
+    private static final int ST_CLOSED = -1;
+    private final AtomicInteger state = new AtomicInteger(ST_OPEN);
+
     private final ChannelConfig config;
     private final ThreadLocalBoolean delivering = new ThreadLocalBoolean();
-    final AtomicBoolean bound = new AtomicBoolean();
+
     final Queue<MessageEvent> writeBuffer = new LinkedTransferQueue<MessageEvent>();
 
     volatile DefaultLocalChannel pairedChannel;
@@ -61,12 +69,40 @@ final class DefaultLocalChannel extends AbstractChannel implements LocalChannel
         return config;
     }
 
+    @Override
+    public boolean isOpen() {
+        return state.get() >= ST_OPEN;
+    }
+
     public boolean isBound() {
-        return bound.get() && isOpen();
+        return state.get() >= ST_BOUND;
     }
 
     public boolean isConnected() {
-        return pairedChannel != null && isOpen();
+        return state.get() == ST_CONNECTED;
+    }
+
+    final void setBound() throws ClosedChannelException {
+        if (!state.compareAndSet(ST_OPEN, ST_BOUND)) {
+            switch (state.get()) {
+            case ST_CLOSED:
+                throw new ClosedChannelException();
+            default:
+                throw new ChannelException("already bound");
+            }
+        }
+    }
+
+    final void setConnected() {
+        if (state.get() != ST_CLOSED) {
+            state.set(ST_CONNECTED);
+        }
+    }
+
+    @Override
+    protected boolean setClosed() {
+        state.set(ST_CLOSED);
+        return super.setClosed();
     }
 
     public LocalAddress getLocalAddress() {
diff --git a/src/main/java/org/jboss/netty/channel/local/LocalClientChannelSink.java b/src/main/java/org/jboss/netty/channel/local/LocalClientChannelSink.java
index 614275108a..347d564b33 100644
--- a/src/main/java/org/jboss/netty/channel/local/LocalClientChannelSink.java
+++ b/src/main/java/org/jboss/netty/channel/local/LocalClientChannelSink.java
@@ -17,6 +17,7 @@ package org.jboss.netty.channel.local;
 
 import static org.jboss.netty.channel.Channels.*;
 
+import java.io.IOException;
 import java.net.ConnectException;
 
 import org.jboss.netty.channel.AbstractChannelSink;
@@ -95,10 +96,7 @@ final class LocalClientChannelSink extends AbstractChannelSink {
                 throw new ChannelException("address already in use: " + localAddress);
             }
 
-            if (!channel.bound.compareAndSet(false, true)) {
-                throw new ChannelException("already bound");
-            }
-
+            channel.setBound();
             channel.localAddress = localAddress;
             future.setSuccess();
             fireChannelBound(channel, localAddress);
@@ -135,12 +133,18 @@ final class LocalClientChannelSink extends AbstractChannelSink {
 
         bind(channel, succeededFuture(channel), new LocalAddress(LocalAddress.EPHEMERAL));
         channel.remoteAddress = serverChannel.getLocalAddress();
+        channel.setConnected();
         fireChannelConnected(channel, serverChannel.getLocalAddress());
 
         acceptedChannel.localAddress = serverChannel.getLocalAddress();
-        acceptedChannel.bound.set(true);
+        try {
+            acceptedChannel.setBound();
+        } catch (IOException e) {
+            throw new Error(e);
+        }
         fireChannelBound(acceptedChannel, channel.getRemoteAddress());
         acceptedChannel.remoteAddress = channel.getLocalAddress();
+        acceptedChannel.setConnected();
         fireChannelConnected(acceptedChannel, channel.getLocalAddress());
 
         // Flush something that was written in channelBound / channelConnected