diff --git a/drivers/hv/ring_buffer.c b/drivers/hv/ring_buffer.c
index 8af25a097d7..7233c88f01b 100644
--- a/drivers/hv/ring_buffer.c
+++ b/drivers/hv/ring_buffer.c
@@ -30,37 +30,6 @@
 #include "hyperv_vmbus.h"
 
 
-/* #defines */
-
-
-/* Amount of space to write to */
-#define BYTES_AVAIL_TO_WRITE(r, w, z) \
-	((w) >= (r)) ? ((z) - ((w) - (r))) : ((r) - (w))
-
-
-/*
- *
- * hv_get_ringbuffer_availbytes()
- *
- * Get number of bytes available to read and to write to
- * for the specified ring buffer
- */
-static inline void
-hv_get_ringbuffer_availbytes(struct hv_ring_buffer_info *rbi,
-			  u32 *read, u32 *write)
-{
-	u32 read_loc, write_loc;
-
-	smp_read_barrier_depends();
-
-	/* Capture the read/write indices before they changed */
-	read_loc = rbi->ring_buffer->read_index;
-	write_loc = rbi->ring_buffer->write_index;
-
-	*write = BYTES_AVAIL_TO_WRITE(read_loc, write_loc, rbi->ring_datasize);
-	*read = rbi->ring_datasize - *write;
-}
-
 /*
  * hv_get_next_write_location()
  *
diff --git a/drivers/net/hyperv/netvsc.c b/drivers/net/hyperv/netvsc.c
index d025c83cd12..8b919471472 100644
--- a/drivers/net/hyperv/netvsc.c
+++ b/drivers/net/hyperv/netvsc.c
@@ -428,6 +428,24 @@ int netvsc_device_remove(struct hv_device *device)
 	return 0;
 }
 
+
+#define RING_AVAIL_PERCENT_HIWATER 20
+#define RING_AVAIL_PERCENT_LOWATER 10
+
+/*
+ * Get the percentage of available bytes to write in the ring.
+ * The return value is in range from 0 to 100.
+ */
+static inline u32 hv_ringbuf_avail_percent(
+		struct hv_ring_buffer_info *ring_info)
+{
+	u32 avail_read, avail_write;
+
+	hv_get_ringbuffer_availbytes(ring_info, &avail_read, &avail_write);
+
+	return avail_write * 100 / ring_info->ring_datasize;
+}
+
 static void netvsc_send_completion(struct hv_device *device,
 				   struct vmpacket_descriptor *packet)
 {
@@ -455,6 +473,8 @@ static void netvsc_send_completion(struct hv_device *device,
 		complete(&net_device->channel_init_wait);
 	} else if (nvsp_packet->hdr.msg_type ==
 		   NVSP_MSG1_TYPE_SEND_RNDIS_PKT_COMPLETE) {
+		int num_outstanding_sends;
+
 		/* Get the send context */
 		nvsc_packet = (struct hv_netvsc_packet *)(unsigned long)
 			packet->trans_id;
@@ -463,10 +483,14 @@ static void netvsc_send_completion(struct hv_device *device,
 		nvsc_packet->completion.send.send_completion(
 			nvsc_packet->completion.send.send_completion_ctx);
 
-		atomic_dec(&net_device->num_outstanding_sends);
+		num_outstanding_sends =
+			atomic_dec_return(&net_device->num_outstanding_sends);
 
-		if (netif_queue_stopped(ndev) && !net_device->start_remove)
-			netif_wake_queue(ndev);
+		if (netif_queue_stopped(ndev) && !net_device->start_remove &&
+			(hv_ringbuf_avail_percent(&device->channel->outbound)
+			> RING_AVAIL_PERCENT_HIWATER ||
+			num_outstanding_sends < 1))
+				netif_wake_queue(ndev);
 	} else {
 		netdev_err(ndev, "Unknown send completion packet type- "
 			   "%d received!!\n", nvsp_packet->hdr.msg_type);
@@ -519,10 +543,19 @@ int netvsc_send(struct hv_device *device,
 
 	if (ret == 0) {
 		atomic_inc(&net_device->num_outstanding_sends);
+		if (hv_ringbuf_avail_percent(&device->channel->outbound) <
+			RING_AVAIL_PERCENT_LOWATER) {
+			netif_stop_queue(ndev);
+			if (atomic_read(&net_device->
+				num_outstanding_sends) < 1)
+				netif_wake_queue(ndev);
+		}
 	} else if (ret == -EAGAIN) {
 		netif_stop_queue(ndev);
-		if (atomic_read(&net_device->num_outstanding_sends) < 1)
+		if (atomic_read(&net_device->num_outstanding_sends) < 1) {
 			netif_wake_queue(ndev);
+			ret = -ENOSPC;
+		}
 	} else {
 		netdev_err(ndev, "Unable to send packet %p ret %d\n",
 			   packet, ret);
diff --git a/drivers/net/hyperv/netvsc_drv.c b/drivers/net/hyperv/netvsc_drv.c
index dd294783b5c..a0cc12786be 100644
--- a/drivers/net/hyperv/netvsc_drv.c
+++ b/drivers/net/hyperv/netvsc_drv.c
@@ -224,9 +224,13 @@ static int netvsc_start_xmit(struct sk_buff *skb, struct net_device *net)
 		net->stats.tx_packets++;
 	} else {
 		kfree(packet);
+		if (ret != -EAGAIN) {
+			dev_kfree_skb_any(skb);
+			net->stats.tx_dropped++;
+		}
 	}
 
-	return ret ? NETDEV_TX_BUSY : NETDEV_TX_OK;
+	return (ret == -EAGAIN) ? NETDEV_TX_BUSY : NETDEV_TX_OK;
 }
 
 /*
diff --git a/include/linux/hyperv.h b/include/linux/hyperv.h
index 5852545e6bb..6af8738ae7e 100644
--- a/include/linux/hyperv.h
+++ b/include/linux/hyperv.h
@@ -274,6 +274,33 @@ struct hv_ring_buffer_debug_info {
 	u32 bytes_avail_towrite;
 };
 
+
+/*
+ *
+ * hv_get_ringbuffer_availbytes()
+ *
+ * Get number of bytes available to read and to write to
+ * for the specified ring buffer
+ */
+static inline void
+hv_get_ringbuffer_availbytes(struct hv_ring_buffer_info *rbi,
+			  u32 *read, u32 *write)
+{
+	u32 read_loc, write_loc, dsize;
+
+	smp_read_barrier_depends();
+
+	/* Capture the read/write indices before they changed */
+	read_loc = rbi->ring_buffer->read_index;
+	write_loc = rbi->ring_buffer->write_index;
+	dsize = rbi->ring_datasize;
+
+	*write = write_loc >= read_loc ? dsize - (write_loc - read_loc) :
+		read_loc - write_loc;
+	*read = dsize - *write;
+}
+
+
 /*
  * We use the same version numbering for all Hyper-V modules.
  *