diff --git a/src/proto/streams/prioritize.rs b/src/proto/streams/prioritize.rs
index a2b2311..1d8b35d 100644
--- a/src/proto/streams/prioritize.rs
+++ b/src/proto/streams/prioritize.rs
@@ -121,6 +121,7 @@ impl<B, P> Prioritize<B, P>
 
         if frame.is_end_stream() {
             stream.state.send_close();
+            self.reserve_capacity(0, stream);
         }
 
         trace!("send_data (2); available={}; buffered={}",
@@ -150,8 +151,21 @@ impl<B, P> Prioritize<B, P>
         if capacity == stream.requested_send_capacity {
             // Nothing to do
         } else if capacity < stream.requested_send_capacity {
-            // TODO: release capacity
-            unimplemented!();
+            // Update the target requested capacity
+            stream.requested_send_capacity = capacity;
+
+            // Currently available capacity assigned to the stream
+            let available = stream.send_flow.available();
+
+            // If the stream has more assigned capacity than requested, reclaim
+            // some for the connection
+            if available > capacity {
+                let diff = available - capacity;
+
+                stream.send_flow.claim_capacity(diff);
+
+                self.assign_connection_capacity(diff, stream);
+            }
         } else {
             // Update the target requested capacity
             stream.requested_send_capacity = capacity;
@@ -239,7 +253,8 @@ impl<B, P> Prioritize<B, P>
         // If the stream has requested capacity, then it must be in the
         // streaming state (more data could be sent) or there is buffered data
         // waiting to be sent.
-        debug_assert!(stream.state.is_send_streaming() || stream.buffered_send_data > 0);
+        debug_assert!(stream.state.is_send_streaming() || stream.buffered_send_data > 0,
+                      "state={:?}", stream.state);
 
         // The amount of currently available capacity on the connection
         let conn_available = self.flow.available();
@@ -287,7 +302,6 @@ impl<B, P> Prioritize<B, P>
         }
     }
 
-
     pub fn poll_complete<T>(&mut self,
                             store: &mut Store<B, P>,
                             dst: &mut Codec<T, Prioritized<B>>)
diff --git a/src/proto/streams/send.rs b/src/proto/streams/send.rs
index b49d09e..431b946 100644
--- a/src/proto/streams/send.rs
+++ b/src/proto/streams/send.rs
@@ -86,8 +86,11 @@ where B: Buf,
         -> Result<(), UserError>
     {
         trace!("send_headers; frame={:?}; init_window={:?}", frame, self.init_window_sz);
+
+        let end_stream = frame.is_end_stream();
+
         // Update the state
-        stream.state.send_open(frame.is_end_stream())?;
+        stream.state.send_open(end_stream)?;
 
         // Queue the frame for sending
         self.prioritize.queue_frame(frame.into(), stream, task);
@@ -156,6 +159,9 @@ where B: Buf,
         trace!("send_trailers -- queuing; frame={:?}", frame);
         self.prioritize.queue_frame(frame.into(), stream, task);
 
+        // Release any excess capacity
+        self.prioritize.reserve_capacity(0, stream);
+
         Ok(())
     }
 
diff --git a/tests/flow_control.rs b/tests/flow_control.rs
index 9ff672a..d23b5bc 100644
--- a/tests/flow_control.rs
+++ b/tests/flow_control.rs
@@ -1,3 +1,4 @@
+#[macro_use]
 extern crate h2_test_support;
 use h2_test_support::prelude::*;
 
@@ -224,3 +225,206 @@ fn recv_data_overflows_window() {
 fn recv_window_update_causes_overflow() {
     // A received window update causes the window to overflow.
 }
+
+#[test]
+fn stream_close_by_data_frame_releases_capacity() {
+    let _ = ::env_logger::init();
+    let (m, mock) = mock::new();
+
+    let window_size = frame::DEFAULT_INITIAL_WINDOW_SIZE as usize;
+
+    let h2 = Client::handshake(m).unwrap()
+        .and_then(|mut h2| {
+            let request = Request::builder()
+                .method(Method::POST)
+                .uri("https://http2.akamai.com/")
+                .body(()).unwrap();
+
+            // Send request
+            let mut s1 = h2.request(request, false).unwrap();
+
+            // This effectively reserves the entire connection window
+            s1.reserve_capacity(window_size);
+
+            // The capacity should be immediately available as nothing else is
+            // happening on the stream.
+            assert_eq!(s1.capacity(), window_size);
+
+            let request = Request::builder()
+                .method(Method::POST)
+                .uri("https://http2.akamai.com/")
+                .body(()).unwrap();
+
+            // Create a second stream
+            let mut s2 = h2.request(request, false).unwrap();
+
+            // Request capacity
+            s2.reserve_capacity(5);
+
+            // There should be no available capacity (as it is being held up by
+            // the previous stream
+            assert_eq!(s2.capacity(), 0);
+
+            // Closing the previous stream by sending an empty data frame will
+            // release the capacity to s2
+            s1.send_data("".into(), true).unwrap();
+
+            // The capacity should be available
+            assert_eq!(s2.capacity(), 5);
+
+            // Send the frame
+            s2.send_data("hello".into(), true).unwrap();
+
+            // Wait for the connection to close
+            h2.unwrap()
+        })
+        ;
+
+    let mock = mock.assert_client_handshake().unwrap()
+        // Get the first frame
+        .and_then(|(_, mock)| mock.into_future().unwrap())
+        .and_then(|(frame, mock)| {
+            let request = assert_headers!(frame.unwrap());
+
+            assert_eq!(request.stream_id(), 1);
+            assert!(!request.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, mock)| {
+            let request = assert_headers!(frame.unwrap());
+
+            assert_eq!(request.stream_id(), 3);
+            assert!(!request.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, mock)| {
+            let data = assert_data!(frame.unwrap());
+
+            assert_eq!(data.stream_id(), 1);
+            assert_eq!(data.payload().len(), 0);
+            assert!(data.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, _)| {
+            let data = assert_data!(frame.unwrap());
+
+            assert_eq!(data.stream_id(), 3);
+            assert_eq!(data.payload(), "hello");
+            assert!(data.is_end_stream());
+
+            Ok(())
+        })
+        ;
+
+    let _ = h2.join(mock)
+        .wait().unwrap();
+}
+
+#[test]
+fn stream_close_by_trailers_frame_releases_capacity() {
+    let _ = ::env_logger::init();
+    let (m, mock) = mock::new();
+
+    let window_size = frame::DEFAULT_INITIAL_WINDOW_SIZE as usize;
+
+    let h2 = Client::handshake(m).unwrap()
+        .and_then(|mut h2| {
+            let request = Request::builder()
+                .method(Method::POST)
+                .uri("https://http2.akamai.com/")
+                .body(()).unwrap();
+
+            // Send request
+            let mut s1 = h2.request(request, false).unwrap();
+
+            // This effectively reserves the entire connection window
+            s1.reserve_capacity(window_size);
+
+            // The capacity should be immediately available as nothing else is
+            // happening on the stream.
+            assert_eq!(s1.capacity(), window_size);
+
+            let request = Request::builder()
+                .method(Method::POST)
+                .uri("https://http2.akamai.com/")
+                .body(()).unwrap();
+
+            // Create a second stream
+            let mut s2 = h2.request(request, false).unwrap();
+
+            // Request capacity
+            s2.reserve_capacity(5);
+
+            // There should be no available capacity (as it is being held up by
+            // the previous stream
+            assert_eq!(s2.capacity(), 0);
+
+            // Closing the previous stream by sending a trailers frame will
+            // release the capacity to s2
+            s1.send_trailers(Default::default()).unwrap();
+
+            // The capacity should be available
+            assert_eq!(s2.capacity(), 5);
+
+            // Send the frame
+            s2.send_data("hello".into(), true).unwrap();
+
+            // Wait for the connection to close
+            h2.unwrap()
+        })
+        ;
+
+    let mock = mock.assert_client_handshake().unwrap()
+        // Get the first frame
+        .and_then(|(_, mock)| mock.into_future().unwrap())
+        .and_then(|(frame, mock)| {
+            let request = assert_headers!(frame.unwrap());
+
+            assert_eq!(request.stream_id(), 1);
+            assert!(!request.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, mock)| {
+            let request = assert_headers!(frame.unwrap());
+
+            assert_eq!(request.stream_id(), 3);
+            assert!(!request.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, mock)| {
+            let trailers = assert_headers!(frame.unwrap());
+
+            assert_eq!(trailers.stream_id(), 1);
+            assert!(trailers.is_end_stream());
+
+            mock.into_future().unwrap()
+        })
+        .and_then(|(frame, _)| {
+            let data = assert_data!(frame.unwrap());
+
+            assert_eq!(data.stream_id(), 3);
+            assert_eq!(data.payload(), "hello");
+            assert!(data.is_end_stream());
+
+            Ok(())
+        })
+        ;
+
+    let _ = h2.join(mock)
+        .wait().unwrap();
+}
+
+#[test]
+#[ignore]
+fn stream_close_by_send_reset_frame_releases_capacity() {
+}
+
+#[test]
+#[ignore]
+fn stream_close_by_recv_reset_frame_releases_capacity() {
+}
diff --git a/tests/prioritization.rs b/tests/prioritization.rs
index ff408af..76560ac 100644
--- a/tests/prioritization.rs
+++ b/tests/prioritization.rs
@@ -238,11 +238,10 @@ fn send_data_receive_window_update() {
         });
 
     let mock = mock.assert_client_handshake().unwrap()
-        .and_then(|(_, mock)| {
-            mock.into_future().unwrap()
-        })
+        .and_then(|(_, mock)| mock.into_future().unwrap())
         .and_then(|(frame, mock)| {
-            let _ = assert_headers!(frame.unwrap());
+            let request = assert_headers!(frame.unwrap());
+            assert!(!request.is_end_stream());
             mock.into_future().unwrap()
         })
         .and_then(|(frame, mut mock)| {