diff --git a/lib/nghttp2_session.c b/lib/nghttp2_session.c
index 4ee107f6..e3f45837 100644
--- a/lib/nghttp2_session.c
+++ b/lib/nghttp2_session.c
@@ -3204,7 +3204,8 @@ static int adjust_recv_window_size(int32_t *recv_window_size_ptr,
 static int nghttp2_session_update_recv_stream_window_size
 (nghttp2_session *session,
  nghttp2_stream *stream,
- int32_t delta_size)
+ int32_t delta_size,
+ int send_window_update)
 {
   int rv;
   rv = adjust_recv_window_size(&stream->recv_window_size, delta_size,
@@ -3213,7 +3214,10 @@ static int nghttp2_session_update_recv_stream_window_size
     return nghttp2_session_add_rst_stream(session, stream->stream_id,
                                           NGHTTP2_FLOW_CONTROL_ERROR);
   }
-  if(!(session->opt_flags & NGHTTP2_OPTMASK_NO_AUTO_STREAM_WINDOW_UPDATE)) {
+  /* We don't have to send WINDOW_UPDATE if the data received is the
+     last chunk in the incoming stream. */
+  if(send_window_update &&
+     !(session->opt_flags & NGHTTP2_OPTMASK_NO_AUTO_STREAM_WINDOW_UPDATE)) {
     /* We have to use local_settings here because it is the constraint
        the remote endpoint should honor. */
     if(nghttp2_should_send_window_update(stream->local_window_size,
@@ -3478,6 +3482,7 @@ ssize_t nghttp2_session_mem_recv(nghttp2_session *session,
   int rv;
   int busy = 0;
   nghttp2_frame_hd cont_hd;
+  nghttp2_stream *stream;
 
   for(;;) {
     switch(iframe->state) {
@@ -3657,6 +3662,23 @@ ssize_t nghttp2_session_mem_recv(nghttp2_session *session,
         }
         iframe->frame.data.padlen = rv;
         iframe->state = NGHTTP2_IB_READ_DATA;
+        /* PAD_HIGH and PAD_LOW are subject to flow control */
+        rv = nghttp2_session_update_recv_connection_window_size
+          (session, iframe->buflen);
+        if(nghttp2_is_fatal(rv)) {
+          return rv;
+        }
+        stream = nghttp2_session_get_stream(session,
+                                            iframe->frame.hd.stream_id);
+        if(stream) {
+          rv = nghttp2_session_update_recv_stream_window_size
+            (session, stream, iframe->buflen,
+             iframe->payloadleft ||
+             (iframe->frame.hd.flags & NGHTTP2_FLAG_END_STREAM) == 0);
+          if(nghttp2_is_fatal(rv)) {
+            return rv;
+          }
+        }
         break;
       case NGHTTP2_HEADERS:
         if(iframe->padlen == 0 &&
@@ -4037,17 +4059,15 @@ ssize_t nghttp2_session_mem_recv(nghttp2_session *session,
         if(nghttp2_is_fatal(rv)) {
           return rv;
         }
-        if(iframe->payloadleft ||
-           (iframe->frame.hd.flags & NGHTTP2_FLAG_END_STREAM) == 0) {
-          nghttp2_stream *stream;
-          stream = nghttp2_session_get_stream(session,
-                                              iframe->frame.hd.stream_id);
-          if(stream) {
-            rv = nghttp2_session_update_recv_stream_window_size
-              (session, stream, readlen);
-            if(nghttp2_is_fatal(rv)) {
-              return rv;
-            }
+        stream = nghttp2_session_get_stream(session,
+                                            iframe->frame.hd.stream_id);
+        if(stream) {
+          rv = nghttp2_session_update_recv_stream_window_size
+            (session, stream, readlen,
+             iframe->payloadleft ||
+             (iframe->frame.hd.flags & NGHTTP2_FLAG_END_STREAM) == 0);
+          if(nghttp2_is_fatal(rv)) {
+            return rv;
           }
         }
         data_readlen = inbound_frame_effective_readlen
diff --git a/tests/main.c b/tests/main.c
index b7d70cdf..699fb3b5 100644
--- a/tests/main.c
+++ b/tests/main.c
@@ -181,6 +181,8 @@ int main(int argc, char* argv[])
                    test_nghttp2_session_flow_control) ||
       !CU_add_test(pSuite, "session_flow_control_data_recv",
                    test_nghttp2_session_flow_control_data_recv) ||
+      !CU_add_test(pSuite, "session_flow_control_data_with_padding_recv",
+                   test_nghttp2_session_flow_control_data_with_padding_recv) ||
       !CU_add_test(pSuite, "session_data_read_temporal_failure",
                    test_nghttp2_session_data_read_temporal_failure) ||
       !CU_add_test(pSuite, "session_on_stream_close",
diff --git a/tests/nghttp2_session_test.c b/tests/nghttp2_session_test.c
index c4b42e4a..22bb54b5 100644
--- a/tests/nghttp2_session_test.c
+++ b/tests/nghttp2_session_test.c
@@ -3542,6 +3542,46 @@ void test_nghttp2_session_flow_control_data_recv(void)
   nghttp2_session_del(session);
 }
 
+void test_nghttp2_session_flow_control_data_with_padding_recv(void)
+{
+  nghttp2_session *session;
+  nghttp2_session_callbacks callbacks;
+  uint8_t data[1024];
+  nghttp2_frame_hd hd;
+  nghttp2_stream *stream;
+
+  memset(&callbacks, 0, sizeof(nghttp2_session_callbacks));
+  callbacks.send_callback = null_send_callback;
+
+  /* Initial window size to 64KiB - 1*/
+  nghttp2_session_client_new(&session, &callbacks, NULL);
+
+  stream = nghttp2_session_open_stream(session, 1, NGHTTP2_STREAM_FLAG_NONE,
+                                       NGHTTP2_PRI_DEFAULT,
+                                       NGHTTP2_STREAM_OPENED, NULL);
+
+  /* Create DATA frame */
+  memset(data, 0, sizeof(data));
+  hd.length = 357;
+  hd.type = NGHTTP2_DATA;
+  hd.flags = NGHTTP2_FLAG_END_STREAM |
+    NGHTTP2_FLAG_PAD_HIGH | NGHTTP2_FLAG_PAD_LOW;;
+  hd.stream_id = 1;
+  nghttp2_frame_pack_frame_hd(data, &hd);
+  /* Add 2 byte padding (PAD_LOW itself is padding) */
+  data[NGHTTP2_FRAME_HEAD_LENGTH] = 1;
+  data[NGHTTP2_FRAME_HEAD_LENGTH + 1] = 1;
+
+  CU_ASSERT(NGHTTP2_FRAME_HEAD_LENGTH + hd.length ==
+            nghttp2_session_mem_recv(session, data,
+                                     NGHTTP2_FRAME_HEAD_LENGTH + hd.length));
+
+  CU_ASSERT(hd.length == session->recv_window_size);
+  CU_ASSERT(hd.length == stream->recv_window_size);
+
+  nghttp2_session_del(session);
+}
+
 void test_nghttp2_session_data_read_temporal_failure(void)
 {
   nghttp2_session *session;
diff --git a/tests/nghttp2_session_test.h b/tests/nghttp2_session_test.h
index e608d148..626963a4 100644
--- a/tests/nghttp2_session_test.h
+++ b/tests/nghttp2_session_test.h
@@ -81,6 +81,7 @@ void test_nghttp2_session_stop_data_with_rst_stream(void);
 void test_nghttp2_session_defer_data(void);
 void test_nghttp2_session_flow_control(void);
 void test_nghttp2_session_flow_control_data_recv(void);
+void test_nghttp2_session_flow_control_data_with_padding_recv(void);
 void test_nghttp2_session_data_read_temporal_failure(void);
 void test_nghttp2_session_on_stream_close(void);
 void test_nghttp2_session_on_ctrl_not_send(void);