diff --git a/p2p/test/websocket/websocket_test.go b/p2p/test/websocket/websocket_test.go
new file mode 100644
index 0000000000..ccadb6fffc
--- /dev/null
+++ b/p2p/test/websocket/websocket_test.go
@@ -0,0 +1,66 @@
+package websocket_test
+
+import (
+	"context"
+	"io"
+	"testing"
+
+	"github.com/libp2p/go-libp2p"
+	"github.com/libp2p/go-libp2p/core/network"
+	"github.com/libp2p/go-libp2p/core/peer"
+	"github.com/stretchr/testify/require"
+)
+
+func TestReadLimit(t *testing.T) {
+	h1, err := libp2p.New(libp2p.ListenAddrStrings("/ip4/127.0.0.1/tcp/0/ws"))
+	require.NoError(t, err)
+	defer h1.Close()
+
+	ctx := context.Background()
+	h2, err := libp2p.New(libp2p.NoListenAddrs)
+	require.NoError(t, err)
+	defer h2.Close()
+
+	err = h2.Connect(ctx, peer.AddrInfo{ID: h1.ID(), Addrs: h1.Addrs()})
+	require.NoError(t, err)
+
+	buf := make([]byte, 256<<10)
+	buf2 := make([]byte, 256<<10)
+	copyBuf := make([]byte, 8<<10)
+
+	errCh := make(chan error, 1)
+	// TODO perf would be perfect here, but not yet merged.
+	h1.SetStreamHandler("/big-blocks", func(s network.Stream) {
+		defer s.Close()
+		_, err := io.CopyBuffer(io.Discard, s, copyBuf)
+		if err != nil {
+			errCh <- err
+			return
+		}
+		_, err = s.Write(buf)
+		if err != nil {
+			errCh <- err
+			return
+		}
+		errCh <- nil
+	})
+
+	allocs := testing.AllocsPerRun(100, func() {
+		s, err := h2.NewStream(ctx, h1.ID(), "/big-blocks")
+		require.NoError(t, err)
+		defer s.Close()
+		_, err = s.Write(buf2)
+		require.NoError(t, err)
+		require.NoError(t, s.CloseWrite())
+
+		_, err = io.ReadFull(s, buf2)
+		require.NoError(t, err)
+
+		_, err = s.Read([]byte{0})
+		require.ErrorIs(t, err, io.EOF)
+		require.NoError(t, <-errCh)
+	})
+
+	// Make sure we aren't doing some crazy allocs when transferring big blocks
+	require.Less(t, allocs, 8*1024.0)
+}
diff --git a/p2p/transport/websocket/conn.go b/p2p/transport/websocket/conn.go
index 70d4abbdcd..c3918c3811 100644
--- a/p2p/transport/websocket/conn.go
+++ b/p2p/transport/websocket/conn.go
@@ -31,7 +31,6 @@ func (c conn) Read(b []byte) (int, error) {
 	if err == nil && n == 0 && c.readAttempts < maxReadAttempts {
 		c.readAttempts++
 		// Nothing happened, let's read again. We reached the end of the frame
-		// we have
 		// (https://github.com/nhooyr/websocket/blob/master/netconn.go#L118).
 		// The next read will block until we get
 		// the next frame. We limit here to avoid looping in case of a bunch of
diff --git a/p2p/transport/websocket/listener.go b/p2p/transport/websocket/listener.go
index 70dbce0fea..8f2f02c31c 100644
--- a/p2p/transport/websocket/listener.go
+++ b/p2p/transport/websocket/listener.go
@@ -4,6 +4,7 @@ import (
 	"context"
 	"crypto/tls"
 	"fmt"
+	"math"
 	"net"
 	"net/http"
 	"net/url"
@@ -109,6 +110,10 @@ func (l *listener) ServeHTTP(w http.ResponseWriter, r *http.Request) {
 		return
 	}
 
+	// Set an arbitrarily large read limit since we don't actually want to limit the message size here.
+	// See https://github.com/nhooyr/websocket/issues/382 for details.
+	c.SetReadLimit(math.MaxInt64 - 1) // -1 because the library adds a byte for the fin frame
+
 	select {
 	case l.incoming <- conn{
 		Conn: ws.NetConn(context.Background(), c, ws.MessageBinary),
diff --git a/p2p/transport/websocket/websocket.go b/p2p/transport/websocket/websocket.go
index f3a3c8709b..a78add9782 100644
--- a/p2p/transport/websocket/websocket.go
+++ b/p2p/transport/websocket/websocket.go
@@ -5,6 +5,7 @@ import (
 	"context"
 	"crypto/tls"
 	"fmt"
+	"math"
 	"net"
 	"net/http"
 	"net/url"
@@ -250,6 +251,8 @@ func (t *WebsocketTransport) maDial(ctx context.Context, raddr ma.Multiaddr) (ma
 		return nil, fmt.Errorf("failed to get local address")
 	}
 
+	// Set an arbitrarily large read limit since we don't actually want to limit the message size here.
+	wscon.SetReadLimit(math.MaxInt64 - 1) // -1 because the library adds a byte for the fin frame
 	mnc, err := manet.WrapNetConn(
 		conn{
 			Conn:       ws.NetConn(context.Background(), wscon, ws.MessageBinary),