diff --git a/modules/congestion_controller/goog_cc/loss_based_bwe_v2.cc b/modules/congestion_controller/goog_cc/loss_based_bwe_v2.cc
index 0b2200e474..f9cea09d1f 100644
--- a/modules/congestion_controller/goog_cc/loss_based_bwe_v2.cc
+++ b/modules/congestion_controller/goog_cc/loss_based_bwe_v2.cc
@@ -309,13 +309,12 @@ void LossBasedBweV2::UpdateBandwidthEstimate(
     }
   }
 
-  if (IsEstimateIncreasingWhenLossLimited(best_candidate)) {
+  if (IsEstimateIncreasingWhenLossLimited(best_candidate) &&
+      best_candidate.loss_limited_bandwidth < delay_based_estimate) {
     current_state_ = LossBasedState::kIncreasing;
-  } else if (IsValid(delay_based_estimate_) &&
-             best_candidate.loss_limited_bandwidth < delay_based_estimate_) {
+  } else if (best_candidate.loss_limited_bandwidth < delay_based_estimate_) {
     current_state_ = LossBasedState::kDecreasing;
-  } else if (IsValid(delay_based_estimate_) &&
-             best_candidate.loss_limited_bandwidth == delay_based_estimate_) {
+  } else if (best_candidate.loss_limited_bandwidth >= delay_based_estimate_) {
     current_state_ = LossBasedState::kDelayBasedEstimate;
   }
   current_estimate_ = best_candidate;
diff --git a/modules/congestion_controller/goog_cc/loss_based_bwe_v2_test.cc b/modules/congestion_controller/goog_cc/loss_based_bwe_v2_test.cc
index 1e1ae0d306..3cbc6f798e 100644
--- a/modules/congestion_controller/goog_cc/loss_based_bwe_v2_test.cc
+++ b/modules/congestion_controller/goog_cc/loss_based_bwe_v2_test.cc
@@ -783,6 +783,106 @@ TEST_P(LossBasedBweV2Test,
             result_at_loss.bandwidth_estimate * 1.5);
 }
 
+TEST_P(LossBasedBweV2Test,
+       LossBasedStateIsDelayBasedEstimateAfterNetworkRecovering) {
+  ExplicitKeyValueConfig key_value_config(
+      "WebRTC-Bwe-LossBasedBweV2/"
+      "Enabled:true,CandidateFactors:100|1|0.5,AckedRateCandidate:true,"
+      "ObservationWindowSize:2,ObservationDurationLowerBound:200ms,"
+      "InstantUpperBoundBwBalance:10000kbps,"
+      "DelayBasedCandidate:true,MaxIncreaseFactor:100,"
+      "BwRampupUpperBoundFactor:"
+      "2.0/");
+  LossBasedBweV2 loss_based_bandwidth_estimator(&key_value_config);
+  DataRate delay_based_estimate = DataRate::KilobitsPerSec(600);
+  DataRate acked_rate = DataRate::KilobitsPerSec(300);
+  loss_based_bandwidth_estimator.SetBandwidthEstimate(
+      DataRate::KilobitsPerSec(600));
+  loss_based_bandwidth_estimator.SetAcknowledgedBitrate(acked_rate);
+
+  // Create some loss to create the loss limited scenario.
+  std::vector<PacketResult> enough_feedback_1 =
+      CreatePacketResultsWith100pLossRate(
+          /*first_packet_timestamp=*/Timestamp::Zero());
+  loss_based_bandwidth_estimator.UpdateBandwidthEstimate(
+      enough_feedback_1, delay_based_estimate, BandwidthUsage::kBwNormal,
+      /*probe_estimate=*/absl::nullopt,
+      /*upper_link_capacity=*/DataRate::PlusInfinity());
+  ASSERT_EQ(loss_based_bandwidth_estimator.GetLossBasedResult().state,
+            LossBasedState::kDecreasing);
+
+  // Network recovers after loss.
+  std::vector<PacketResult> enough_feedback_2 =
+      CreatePacketResultsWithReceivedPackets(
+          /*first_packet_timestamp=*/Timestamp::Zero() +
+          kObservationDurationLowerBound);
+  loss_based_bandwidth_estimator.SetAcknowledgedBitrate(
+      DataRate::KilobitsPerSec(600));
+  loss_based_bandwidth_estimator.UpdateBandwidthEstimate(
+      enough_feedback_2, delay_based_estimate, BandwidthUsage::kBwNormal,
+      /*probe_estimate=*/absl::nullopt,
+      /*upper_link_capacity=*/DataRate::PlusInfinity());
+  EXPECT_EQ(loss_based_bandwidth_estimator.GetLossBasedResult().state,
+            LossBasedState::kDelayBasedEstimate);
+
+  // Network recovers continuing.
+  std::vector<PacketResult> enough_feedback_3 =
+      CreatePacketResultsWithReceivedPackets(
+          /*first_packet_timestamp=*/Timestamp::Zero() +
+          kObservationDurationLowerBound * 2);
+  loss_based_bandwidth_estimator.SetAcknowledgedBitrate(
+      DataRate::KilobitsPerSec(600));
+  loss_based_bandwidth_estimator.UpdateBandwidthEstimate(
+      enough_feedback_3, delay_based_estimate, BandwidthUsage::kBwNormal,
+      /*probe_estimate=*/absl::nullopt,
+      /*upper_link_capacity=*/DataRate::PlusInfinity());
+  EXPECT_EQ(loss_based_bandwidth_estimator.GetLossBasedResult().state,
+            LossBasedState::kDelayBasedEstimate);
+}
+
+TEST_P(LossBasedBweV2Test,
+       LossBasedStateIsNotDelayBasedEstimateIfDelayBasedEsimtateInfinite) {
+  ExplicitKeyValueConfig key_value_config(
+      "WebRTC-Bwe-LossBasedBweV2/"
+      "Enabled:true,CandidateFactors:100|1|0.5,AckedRateCandidate:true,"
+      "ObservationWindowSize:2,ObservationDurationLowerBound:200ms,"
+      "InstantUpperBoundBwBalance:10000kbps,"
+      "DelayBasedCandidate:true,MaxIncreaseFactor:100,"
+      "BwRampupUpperBoundFactor:"
+      "2.0/");
+  LossBasedBweV2 loss_based_bandwidth_estimator(&key_value_config);
+  DataRate delay_based_estimate = DataRate::PlusInfinity();
+  DataRate acked_rate = DataRate::KilobitsPerSec(300);
+  loss_based_bandwidth_estimator.SetBandwidthEstimate(
+      DataRate::KilobitsPerSec(600));
+  loss_based_bandwidth_estimator.SetAcknowledgedBitrate(acked_rate);
+
+  // Create some loss to create the loss limited scenario.
+  std::vector<PacketResult> enough_feedback_1 =
+      CreatePacketResultsWith100pLossRate(
+          /*first_packet_timestamp=*/Timestamp::Zero());
+  loss_based_bandwidth_estimator.UpdateBandwidthEstimate(
+      enough_feedback_1, delay_based_estimate, BandwidthUsage::kBwNormal,
+      /*probe_estimate=*/absl::nullopt,
+      /*upper_link_capacity=*/DataRate::PlusInfinity());
+  ASSERT_EQ(loss_based_bandwidth_estimator.GetLossBasedResult().state,
+            LossBasedState::kDecreasing);
+
+  // Network recovers after loss.
+  std::vector<PacketResult> enough_feedback_2 =
+      CreatePacketResultsWithReceivedPackets(
+          /*first_packet_timestamp=*/Timestamp::Zero() +
+          kObservationDurationLowerBound);
+  loss_based_bandwidth_estimator.SetAcknowledgedBitrate(
+      DataRate::KilobitsPerSec(600));
+  loss_based_bandwidth_estimator.UpdateBandwidthEstimate(
+      enough_feedback_2, delay_based_estimate, BandwidthUsage::kBwNormal,
+      /*probe_estimate=*/absl::nullopt,
+      /*upper_link_capacity=*/DataRate::PlusInfinity());
+  EXPECT_EQ(loss_based_bandwidth_estimator.GetLossBasedResult().state,
+            LossBasedState::kIncreasing);
+}
+
 // After loss based bwe backs off, the next estimate is capped by
 // a factor of acked bitrate.
 TEST_P(LossBasedBweV2Test,