diff --git a/CHANGELOG.md b/CHANGELOG.md
index e0b56d1c05d..077abba159d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -28,6 +28,10 @@ This project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.htm
 - Create new modules: otel/metric, otel/trace, otel/oteltest, otel/sdk/export/metric, otel/sdk/metric (#1528)
 - Move metric-related public global APIs from otel to otel/metric/global. (#1528)
 
+## Fixed
+
+- Fixed otlpgrpc reconnection issue.
+
 ## [0.16.0] - 2020-01-13
 
 ### Added
diff --git a/exporters/otlp/otlpgrpc/connection.go b/exporters/otlp/otlpgrpc/connection.go
index c469d099c3e..5fbd68ffe42 100644
--- a/exporters/otlp/otlpgrpc/connection.go
+++ b/exporters/otlp/otlpgrpc/connection.go
@@ -66,7 +66,7 @@ func newConnection(cfg config, handler func(cc *grpc.ClientConn)) *connection {
 
 func (c *connection) startConnection(ctx context.Context) {
 	c.stopCh = make(chan struct{})
-	c.disconnectedCh = make(chan bool)
+	c.disconnectedCh = make(chan bool, 1)
 	c.backgroundConnectionDoneCh = make(chan struct{})
 
 	if err := c.connect(ctx); err == nil {
@@ -155,6 +155,8 @@ func (c *connection) indefiniteBackgroundConnection() {
 		if err := c.connect(context.Background()); err == nil {
 			c.setStateConnected()
 		} else {
+			// this code is unreachable in most cases
+			// c.connect does not establish connection
 			c.setStateDisconnected(err)
 		}
 
diff --git a/exporters/otlp/otlpgrpc/otlp_integration_test.go b/exporters/otlp/otlpgrpc/otlp_integration_test.go
index fb6272aa5e5..3566fbe4184 100644
--- a/exporters/otlp/otlpgrpc/otlp_integration_test.go
+++ b/exporters/otlp/otlpgrpc/otlp_integration_test.go
@@ -142,6 +142,72 @@ func TestNewExporter_invokeStartThenStopManyTimes(t *testing.T) {
 	}
 }
 
+func TestNewExporter_collectorConnectionDiesThenReconnectsWhenInRestMode(t *testing.T) {
+	mc := runMockCollector(t)
+
+	reconnectionPeriod := 2 * time.Second // 2 second + jitter rest time after reconnection
+	ctx := context.Background()
+	exp := newGRPCExporter(t, ctx, mc.endpoint,
+		otlpgrpc.WithReconnectionPeriod(reconnectionPeriod))
+	defer func() {
+		_ = exp.Shutdown(ctx)
+	}()
+
+	// We'll now stop the collector right away to simulate a connection
+	// dying in the midst of communication or even not existing before.
+	_ = mc.stop()
+
+	// first export, it will send disconnected message to the channel on export failure,
+	// trigger almost immediate reconnection
+	require.Error(
+		t,
+		exp.ExportSpans(ctx, []*exporttrace.SpanSnapshot{{Name: "in the midst"}}),
+		"transport: Error while dialing dial tcp %s: connect: connection refused",
+		mc.endpoint,
+	)
+
+	// give it time for first reconnection
+	<-time.After(time.Millisecond * 20)
+
+	// second export, it will detect connection issue, change state of exporter to disconnected and
+	// send message to disconnected channel but this time reconnection gouroutine will be in (rest mode, not listening to the disconnected channel)
+	require.Error(
+		t,
+		exp.ExportSpans(ctx, []*exporttrace.SpanSnapshot{{Name: "in the midst"}}),
+		"transport: Error while dialing dial tcp %s: connect: connection refused2",
+		mc.endpoint,
+	)
+
+	// as a result we have exporter in disconnected state waiting for disconnection message to reconnect
+
+	// resurrect collector
+	nmc := runMockCollectorAtEndpoint(t, mc.endpoint)
+
+	// make sure reconnection loop hits beginning and goes back to waiting mode
+	// after hitting beginning of the loop it should reconnect
+	<-time.After(time.Second * 4)
+
+	n := 10
+	for i := 0; i < n; i++ {
+		// when disconnected exp.ExportSpans doesnt send disconnected messages again
+		// it just quits and return last connection error
+		require.NoError(t, exp.ExportSpans(ctx, []*exporttrace.SpanSnapshot{{Name: "Resurrected"}}))
+	}
+
+	nmaSpans := nmc.getSpans()
+
+	// Expecting 10 SpanSnapshots that were sampled, given that
+	if g, w := len(nmaSpans), n; g != w {
+		t.Fatalf("Connected collector: spans: got %d want %d", g, w)
+	}
+
+	dSpans := mc.getSpans()
+	// Expecting 0 spans to have been received by the original but now dead collector
+	if g, w := len(dSpans), 0; g != w {
+		t.Fatalf("Disconnected collector: spans: got %d want %d", g, w)
+	}
+}
+
 func TestNewExporter_collectorConnectionDiesThenReconnects(t *testing.T) {
 	mc := runMockCollector(t)