diff --git a/lightning-custom-message/src/lib.rs b/lightning-custom-message/src/lib.rs
index 32d5a9e4389..0d70ba06385 100644
--- a/lightning-custom-message/src/lib.rs
+++ b/lightning-custom-message/src/lib.rs
@@ -312,13 +312,25 @@ macro_rules! composite_custom_message_handler {
 			}
 
 			fn peer_connected(&self, their_node_id: $crate::bitcoin::secp256k1::PublicKey, msg: &$crate::lightning::ln::msgs::Init, inbound: bool) -> Result<(), ()> {
-				let mut result = Ok(());
+				// Per the `CustomMessageHandler::peer_connected` contract, `peer_disconnected`
+				// will not be called by `PeerManager` if we return `Err`. To avoid leaking
+				// per-peer state in sub-handlers that already returned `Ok` when a later one
+				// errors, record each sub-handler's result and roll back the successful ones
+				// ourselves before propagating the failure.
 				$(
-					if let Err(e) = self.$field.peer_connected(their_node_id, msg, inbound) {
-						result = Err(e);
-					}
+					let $field = self.$field.peer_connected(their_node_id, msg, inbound);
 				)*
-				result
+				let any_err = false $( || $field.is_err() )*;
+				if any_err {
+					$(
+						if $field.is_ok() {
+							self.$field.peer_disconnected(their_node_id);
+						}
+					)*
+					Err(())
+				} else {
+					Ok(())
+				}
 			}
 
 			fn provided_node_features(&self) -> $crate::lightning::types::features::NodeFeatures {
@@ -376,3 +388,143 @@ macro_rules! composite_custom_message_handler {
 		}
 	}
 }
+
+#[cfg(test)]
+mod tests {
+	use bitcoin::secp256k1::PublicKey;
+	use core::sync::atomic::{AtomicUsize, Ordering};
+	use lightning::io;
+	use lightning::ln::msgs::{DecodeError, Init, LightningError};
+	use lightning::ln::peer_handler::CustomMessageHandler;
+	use lightning::ln::wire::{CustomMessageReader, Type};
+	use lightning::types::features::{InitFeatures, NodeFeatures};
+	use lightning::util::ser::{LengthLimitedRead, Writeable, Writer};
+
+	#[derive(Debug)]
+	pub struct Foo;
+	impl Type for Foo {
+		fn type_id(&self) -> u16 {
+			32768
+		}
+	}
+	impl Writeable for Foo {
+		fn write<W: Writer>(&self, _: &mut W) -> Result<(), io::Error> {
+			Ok(())
+		}
+	}
+
+	pub struct CountingHandler {
+		pub connect_count: AtomicUsize,
+	}
+	impl CustomMessageReader for CountingHandler {
+		type CustomMessage = Foo;
+		fn read<R: LengthLimitedRead>(
+			&self, _t: u16, _b: &mut R,
+		) -> Result<Option<Foo>, DecodeError> {
+			Ok(None)
+		}
+	}
+	impl CustomMessageHandler for CountingHandler {
+		fn handle_custom_message(&self, _msg: Foo, _: PublicKey) -> Result<(), LightningError> {
+			Ok(())
+		}
+		fn get_and_clear_pending_msg(&self) -> Vec<(PublicKey, Foo)> {
+			vec![]
+		}
+		fn peer_disconnected(&self, _: PublicKey) {
+			self.connect_count.fetch_sub(1, Ordering::SeqCst);
+		}
+		fn peer_connected(&self, _: PublicKey, _: &Init, _: bool) -> Result<(), ()> {
+			self.connect_count.fetch_add(1, Ordering::SeqCst);
+			Ok(())
+		}
+		fn provided_node_features(&self) -> NodeFeatures {
+			NodeFeatures::empty()
+		}
+		fn provided_init_features(&self, _: PublicKey) -> InitFeatures {
+			InitFeatures::empty()
+		}
+	}
+
+	#[derive(Debug)]
+	pub struct Bar;
+	impl Type for Bar {
+		fn type_id(&self) -> u16 {
+			32769
+		}
+	}
+	impl Writeable for Bar {
+		fn write<W: Writer>(&self, _: &mut W) -> Result<(), io::Error> {
+			Ok(())
+		}
+	}
+
+	pub struct ErroringHandler;
+	impl CustomMessageReader for ErroringHandler {
+		type CustomMessage = Bar;
+		fn read<R: LengthLimitedRead>(
+			&self, _t: u16, _b: &mut R,
+		) -> Result<Option<Bar>, DecodeError> {
+			Ok(None)
+		}
+	}
+	impl CustomMessageHandler for ErroringHandler {
+		fn handle_custom_message(&self, _msg: Bar, _: PublicKey) -> Result<(), LightningError> {
+			Ok(())
+		}
+		fn get_and_clear_pending_msg(&self) -> Vec<(PublicKey, Bar)> {
+			vec![]
+		}
+		fn peer_disconnected(&self, _: PublicKey) {
+			debug_assert!(false);
+		}
+		fn peer_connected(&self, _: PublicKey, _: &Init, _: bool) -> Result<(), ()> {
+			Err(())
+		}
+		fn provided_node_features(&self) -> NodeFeatures {
+			NodeFeatures::empty()
+		}
+		fn provided_init_features(&self, _: PublicKey) -> InitFeatures {
+			InitFeatures::empty()
+		}
+	}
+
+	composite_custom_message_handler!(
+		pub struct CompositeHandler {
+			counting: CountingHandler,
+			erroring: ErroringHandler,
+		}
+
+		pub enum CompositeMessage {
+			Foo(32768),
+			Bar(32769),
+		}
+	);
+
+	#[test]
+	fn peer_connected_failure_does_not_leak_subhandler_state() {
+		let composite = CompositeHandler {
+			counting: CountingHandler { connect_count: AtomicUsize::new(0) },
+			erroring: ErroringHandler,
+		};
+		let pk_bytes = [
+			0x02, 0x79, 0xBE, 0x66, 0x7E, 0xF9, 0xDC, 0xBB, 0xAC, 0x55, 0xA0, 0x62, 0x95, 0xCE,
+			0x87, 0x0B, 0x07, 0x02, 0x9B, 0xFC, 0xDB, 0x2D, 0xCE, 0x28, 0xD9, 0x59, 0xF2, 0x81,
+			0x5B, 0x16, 0xF8, 0x17, 0x98,
+		];
+		let pk = PublicKey::from_slice(&pk_bytes).unwrap();
+		let init =
+			Init { features: InitFeatures::empty(), networks: None, remote_network_address: None };
+
+		let result = composite.peer_connected(pk, &init, true);
+		assert!(result.is_err(), "Composite must propagate the inner Err");
+
+		let leaked = composite.counting.connect_count.load(Ordering::SeqCst);
+		assert_eq!(
+			leaked, 0,
+			"CountingHandler tracked {leaked} connected peer(s) after the composite \
+			 returned Err; this state will never be cleaned up because per the trait \
+			 contract peer_disconnected won't be called when peer_connected returns Err.",
+		);
+	}
+}