diff --git a/mempool/cat/pool.go b/mempool/cat/pool.go
index 30e8b38696..d462f5a6b6 100644
--- a/mempool/cat/pool.go
+++ b/mempool/cat/pool.go
@@ -415,12 +415,14 @@ func (txmp *TxPool) ReapMaxBytesMaxGas(maxBytes, maxGas int64) types.Txs {
 	var keep []types.Tx //nolint:prealloc
 	for _, w := range txmp.allEntriesSorted() {
 		// N.B. When computing byte size, we need to include the overhead for
-		// encoding as protobuf to send to the application.
-		totalGas += w.gasWanted
-		totalBytes += types.ComputeProtoSizeForTxs([]types.Tx{w.tx})
-		if (maxGas >= 0 && totalGas > maxGas) || (maxBytes >= 0 && totalBytes > maxBytes) {
-			break
+		// encoding as protobuf to send to the application. This actually overestimates it
+		// as we add the proto overhead to each transaction
+		txBytes := types.ComputeProtoSizeForTxs([]types.Tx{w.tx})
+		if (maxGas >= 0 && totalGas+w.gasWanted > maxGas) || (maxBytes >= 0 && totalBytes+txBytes > maxBytes) {
+			continue
 		}
+		totalBytes += txBytes
+		totalGas += w.gasWanted
 		keep = append(keep, w.tx)
 	}
 	return keep
diff --git a/mempool/cat/pool_test.go b/mempool/cat/pool_test.go
index 3b9eccb2e6..45eb6d4811 100644
--- a/mempool/cat/pool_test.go
+++ b/mempool/cat/pool_test.go
@@ -374,6 +374,28 @@ func TestTxPool_ReapMaxBytesMaxGas(t *testing.T) {
 	require.Len(t, reapedTxs, 25)
 }
 
+func TestTxMempoolTxLargerThanMaxBytes(t *testing.T) {
+	rng := rand.New(rand.NewSource(time.Now().UnixNano()))
+	txmp := setup(t, 0)
+	bigPrefix := make([]byte, 100)
+	_, err := rng.Read(bigPrefix)
+	require.NoError(t, err)
+	// large high priority tx
+	bigTx := []byte(fmt.Sprintf("sender-1-1=%X=2", bigPrefix))
+	smallPrefix := make([]byte, 20)
+	_, err = rng.Read(smallPrefix)
+	require.NoError(t, err)
+	// smaller low priority tx with different sender
+	smallTx := []byte(fmt.Sprintf("sender-2-1=%X=1", smallPrefix))
+	require.NoError(t, txmp.CheckTx(bigTx, nil, mempool.TxInfo{SenderID: 1}))
+	require.NoError(t, txmp.CheckTx(smallTx, nil, mempool.TxInfo{SenderID: 1}))
+
+	// reap by max bytes less than the large tx
+	reapedTxs := txmp.ReapMaxBytesMaxGas(100, -1)
+	require.Len(t, reapedTxs, 1)
+	require.Equal(t, types.Tx(smallTx), reapedTxs[0])
+}
+
 func TestTxPool_ReapMaxTxs(t *testing.T) {
 	txmp := setup(t, 0)
 	txs := checkTxs(t, txmp, 100, 0)
diff --git a/mempool/v1/mempool.go b/mempool/v1/mempool.go
index a07b685477..120549abf8 100644
--- a/mempool/v1/mempool.go
+++ b/mempool/v1/mempool.go
@@ -330,12 +330,14 @@ func (txmp *TxMempool) ReapMaxBytesMaxGas(maxBytes, maxGas int64) types.Txs {
 	var keep []types.Tx //nolint:prealloc
 	for _, w := range txmp.allEntriesSorted() {
 		// N.B. When computing byte size, we need to include the overhead for
-		// encoding as protobuf to send to the application.
-		totalGas += w.gasWanted
-		totalBytes += types.ComputeProtoSizeForTxs([]types.Tx{w.tx})
-		if (maxGas >= 0 && totalGas > maxGas) || (maxBytes >= 0 && totalBytes > maxBytes) {
-			break
+		// encoding as protobuf to send to the application. This actually overestimates it
+		// as we add the proto overhead to each transaction
+		txBytes := types.ComputeProtoSizeForTxs([]types.Tx{w.tx})
+		if (maxGas >= 0 && totalGas+w.gasWanted > maxGas) || (maxBytes >= 0 && totalBytes+txBytes > maxBytes) {
+			continue
 		}
+		totalBytes += txBytes
+		totalGas += w.gasWanted
 		keep = append(keep, w.tx)
 	}
 	return keep
diff --git a/mempool/v1/mempool_test.go b/mempool/v1/mempool_test.go
index 0f8291fa8a..4b27c20b1e 100644
--- a/mempool/v1/mempool_test.go
+++ b/mempool/v1/mempool_test.go
@@ -355,6 +355,28 @@ func TestTxMempool_ReapMaxBytesMaxGas(t *testing.T) {
 	require.Len(t, reapedTxs, 25)
 }
 
+func TestTxMempoolTxLargerThanMaxBytes(t *testing.T) {
+	rng := rand.New(rand.NewSource(time.Now().UnixNano()))
+	txmp := setup(t, 0)
+	bigPrefix := make([]byte, 100)
+	_, err := rng.Read(bigPrefix)
+	require.NoError(t, err)
+	// large high priority tx
+	bigTx := []byte(fmt.Sprintf("sender-1-1=%X=2", bigPrefix))
+	smallPrefix := make([]byte, 20)
+	_, err = rng.Read(smallPrefix)
+	require.NoError(t, err)
+	// smaller low priority tx with different sender
+	smallTx := []byte(fmt.Sprintf("sender-2-1=%X=1", smallPrefix))
+	require.NoError(t, txmp.CheckTx(bigTx, nil, mempool.TxInfo{SenderID: 1}))
+	require.NoError(t, txmp.CheckTx(smallTx, nil, mempool.TxInfo{SenderID: 1}))
+
+	// reap by max bytes less than the large tx
+	reapedTxs := txmp.ReapMaxBytesMaxGas(100, -1)
+	require.Len(t, reapedTxs, 1)
+	require.Equal(t, types.Tx(smallTx), reapedTxs[0])
+}
+
 func TestTxMempool_ReapMaxTxs(t *testing.T) {
 	txmp := setup(t, 0)
 	tTxs := checkTxs(t, txmp, 100, 0)