diff --git a/tests/RPCServer.test.ts b/tests/RPCServer.test.ts
index c45054a..25fc41d 100644
--- a/tests/RPCServer.test.ts
+++ b/tests/RPCServer.test.ts
@@ -942,7 +942,7 @@ describe(`${RPCServer.name}`, () => {
     }
     await rpcServer.stop({ force: true });
   });
-  test('handler overrides timeout', async () => {
+  test('handler overrides timeout - lesser value', async () => {
     {
       const waitProm = promise();
       const ctxShortProm = promise<ContextTimed>();
@@ -961,7 +961,7 @@ describe(`${RPCServer.name}`, () => {
       }
       const ctxLongProm = promise<ContextTimed>();
       class TestMethodLongTimeout extends UnaryHandler {
-        timeout = 100;
+        handlerTimeout = 26;
         public handle = async (
           input: JSONValue,
           _cancel,
@@ -1016,7 +1016,86 @@ describe(`${RPCServer.name}`, () => {
 
       // Longer timeout is set to server's default
       const ctxLong = await ctxLongProm.p;
-      expect(ctxLong.timer.delay).toEqual(50);
+      expect(ctxLong.timer.delay).toEqual(26);
+      waitProm.resolveP();
+      await rpcServer.stop({ force: true });
+    }
+  });
+  test('handler overrides timeout - greater value', async () => {
+    {
+      const waitProm = promise();
+      const ctxShortProm = promise<ContextTimed>();
+      class TestMethodShortTimeout extends UnaryHandler {
+        handlerTimeout = 250;
+        public handle = async (
+          input: JSONValue,
+          _cancel,
+          _meta,
+          ctx_,
+        ): Promise<JSONValue> => {
+          ctxShortProm.resolveP(ctx_);
+          await waitProm.p;
+          return input;
+        };
+      }
+      const ctxLongProm = promise<ContextTimed>();
+      class TestMethodLongTimeout extends UnaryHandler {
+        handlerTimeout = 261;
+        public handle = async (
+          input: JSONValue,
+          _cancel,
+          _meta,
+          ctx_,
+        ): Promise<JSONValue> => {
+          ctxLongProm.resolveP(ctx_);
+          await waitProm.p;
+          return input;
+        };
+      }
+      const rpcServer = new RPCServer({
+        handlerTimeoutTime: 50,
+        logger,
+        idGen,
+      });
+      await rpcServer.start({
+        manifest: {
+          testShort: new TestMethodShortTimeout({}),
+          testLong: new TestMethodLongTimeout({}),
+        },
+      });
+      const streamShort = rpcTestUtils.messagesToReadableStream([
+        {
+          jsonrpc: '2.0',
+          method: 'testShort',
+          params: null,
+        },
+      ]);
+      const readWriteStreamShort: RPCStream<Uint8Array, Uint8Array> = {
+        cancel: () => {},
+        readable: streamShort,
+        writable: new WritableStream(),
+      };
+      rpcServer.handleStream(readWriteStreamShort);
+      // Shorter timeout is updated
+      const ctxShort = await ctxShortProm.p;
+      expect(ctxShort.timer.delay).toEqual(250);
+      const streamLong = rpcTestUtils.messagesToReadableStream([
+        {
+          jsonrpc: '2.0',
+          method: 'testLong',
+          params: null,
+        },
+      ]);
+      const readWriteStreamLong: RPCStream<Uint8Array, Uint8Array> = {
+        cancel: () => {},
+        readable: streamLong,
+        writable: new WritableStream(),
+      };
+      rpcServer.handleStream(readWriteStreamLong);
+
+      // Longer timeout is set to server's default
+      const ctxLong = await ctxLongProm.p;
+      expect(ctxLong.timer.delay).toEqual(261);
       waitProm.resolveP();
       await rpcServer.stop({ force: true });
     }