diff --git a/abci/types/types.go b/abci/types/types.go
index 4df6d4751..b40865524 100644
--- a/abci/types/types.go
+++ b/abci/types/types.go
@@ -247,11 +247,13 @@ const (
 )
 
 type PendingTxChecker func() PendingTxCheckerResponse
+type ExpireTxHandler func()
 
-// V2 response type contains non-protobuf fields, so non-local ABCI clients will not be able
+// ResponseCheckTxV2 response type contains non-protobuf fields, so non-local ABCI clients will not be able
 // to utilize the new fields in V2 type (but still be backwards-compatible)
 type ResponseCheckTxV2 struct {
 	*ResponseCheckTx
 	IsPendingTransaction bool
 	Checker              PendingTxChecker // must not be nil if IsPendingTransaction is true
+	ExpireTxHandler      ExpireTxHandler
 }
diff --git a/internal/mempool/mempool.go b/internal/mempool/mempool.go
index 70489bed6..84b251908 100644
--- a/internal/mempool/mempool.go
+++ b/internal/mempool/mempool.go
@@ -291,13 +291,20 @@ func (txmp *TxMempool) CheckTx(
 		hash:      txHash,
 		timestamp: time.Now().UTC(),
 		height:    txmp.height,
+		expiredCallback: func(removeFromCache bool) {
+			if removeFromCache {
+				txmp.cache.Remove(tx)
+			}
+			if res.ExpireTxHandler != nil {
+				res.ExpireTxHandler()
+			}
+		},
 	}
 
 	if err == nil {
 		// only add new transaction if checkTx passes and is not pending
 		if !res.IsPendingTransaction {
 			err = txmp.addNewTransaction(wtx, res.ResponseCheckTx, txInfo)
-
 			if err != nil {
 				return err
 			}
@@ -837,9 +844,7 @@ func (txmp *TxMempool) removeTx(wtx *WrappedTx, removeFromCache bool) {
 
 	atomic.AddInt64(&txmp.sizeBytes, int64(-wtx.Size()))
 
-	if removeFromCache {
-		txmp.cache.Remove(wtx.tx)
-	}
+	wtx.expiredCallback(removeFromCache)
 }
 
 // purgeExpiredTxs removes all transactions that have exceeded their respective
@@ -888,10 +893,13 @@ func (txmp *TxMempool) purgeExpiredTxs(blockHeight int64) {
 	}
 
 	for _, wtx := range expiredTxs {
-		txmp.removeTx(wtx, false)
+		txmp.removeTx(wtx, !txmp.config.KeepInvalidTxsInCache)
 	}
 
-	txmp.pendingTxs.PurgeExpired(txmp.config.TTLNumBlocks, blockHeight, txmp.config.TTLDuration, now, txmp.cache.Remove)
+	// remove pending txs that have expired
+	txmp.pendingTxs.PurgeExpired(txmp.config.TTLNumBlocks, blockHeight, txmp.config.TTLDuration, now, func(wtx *WrappedTx) {
+		wtx.expiredCallback(!txmp.config.KeepInvalidTxsInCache)
+	})
 }
 
 func (txmp *TxMempool) notifyTxsAvailable() {
diff --git a/internal/mempool/tx.go b/internal/mempool/tx.go
index 2f3ec7b8f..4d5762be5 100644
--- a/internal/mempool/tx.go
+++ b/internal/mempool/tx.go
@@ -64,6 +64,9 @@ type WrappedTx struct {
 	// transaction in the mempool can be evicted when it is simultaneously having
 	// a reCheckTx callback executed.
 	removed bool
+
+	// this is the callback that can be called when a transaction expires
+	expiredCallback func(removeFromCache bool)
 }
 
 func (wtx *WrappedTx) Size() int {
@@ -295,10 +298,10 @@ func (wtl *WrappedTxList) Remove(wtx *WrappedTx) {
 
 type PendingTxs struct {
 	mtx *sync.RWMutex
-	txs []PendingTxInfo
+	txs []TxWithResponse
 }
 
-type PendingTxInfo struct {
+type TxWithResponse struct {
 	tx              *WrappedTx
 	checkTxResponse *abci.ResponseCheckTxV2
 	txInfo          TxInfo
@@ -307,13 +310,12 @@ type PendingTxInfo struct {
 func NewPendingTxs() *PendingTxs {
 	return &PendingTxs{
 		mtx: &sync.RWMutex{},
-		txs: []PendingTxInfo{},
+		txs: []TxWithResponse{},
 	}
 }
-
 func (p *PendingTxs) EvaluatePendingTransactions() (
-	acceptedTxs []PendingTxInfo,
-	rejectedTxs []PendingTxInfo,
+	acceptedTxs []TxWithResponse,
+	rejectedTxs []TxWithResponse,
 ) {
 	poppedIndices := []int{}
 	p.mtx.Lock()
@@ -337,7 +339,7 @@ func (p *PendingTxs) popTxsAtIndices(indices []int) {
 	if len(indices) == 0 {
 		return
 	}
-	newTxs := []PendingTxInfo{}
+	newTxs := []TxWithResponse{}
 	start := 0
 	for _, idx := range indices {
 		newTxs = append(newTxs, p.txs[start:idx]...)
@@ -350,14 +352,14 @@ func (p *PendingTxs) popTxsAtIndices(indices []int) {
 func (p *PendingTxs) Insert(tx *WrappedTx, resCheckTx *abci.ResponseCheckTxV2, txInfo TxInfo) {
 	p.mtx.Lock()
 	defer p.mtx.Unlock()
-	p.txs = append(p.txs, PendingTxInfo{
+	p.txs = append(p.txs, TxWithResponse{
 		tx:              tx,
 		checkTxResponse: resCheckTx,
 		txInfo:          txInfo,
 	})
 }
 
-func (p *PendingTxs) Peek(max int) []PendingTxInfo {
+func (p *PendingTxs) Peek(max int) []TxWithResponse {
 	p.mtx.RLock()
 	defer p.mtx.RUnlock()
 	// priority is fifo
@@ -373,7 +375,7 @@ func (p *PendingTxs) Size() int {
 	return len(p.txs)
 }
 
-func (p *PendingTxs) PurgeExpired(ttlNumBlock int64, blockHeight int64, ttlDuration time.Duration, now time.Time, cb func(types.Tx)) {
+func (p *PendingTxs) PurgeExpired(ttlNumBlock int64, blockHeight int64, ttlDuration time.Duration, now time.Time, cb func(wtx *WrappedTx)) {
 	p.mtx.Lock()
 	defer p.mtx.Unlock()
 
@@ -385,10 +387,12 @@ func (p *PendingTxs) PurgeExpired(ttlNumBlock int64, blockHeight int64, ttlDurat
 	if ttlNumBlock > 0 {
 		idxFirstNotExpiredTx := len(p.txs)
 		for i, ptx := range p.txs {
+			// once found, we can break because these are ordered
 			if (blockHeight - ptx.tx.height) <= ttlNumBlock {
 				idxFirstNotExpiredTx = i
+				break
 			} else {
-				cb(ptx.tx.tx)
+				cb(ptx.tx)
 			}
 		}
 		p.txs = p.txs[idxFirstNotExpiredTx:]
@@ -401,10 +405,12 @@ func (p *PendingTxs) PurgeExpired(ttlNumBlock int64, blockHeight int64, ttlDurat
 	if ttlDuration > 0 {
 		idxFirstNotExpiredTx := len(p.txs)
 		for i, ptx := range p.txs {
+			// once found, we can break because these are ordered
 			if now.Sub(ptx.tx.timestamp) <= ttlDuration {
 				idxFirstNotExpiredTx = i
+				break
 			} else {
-				cb(ptx.tx.tx)
+				cb(ptx.tx)
 			}
 		}
 		p.txs = p.txs[idxFirstNotExpiredTx:]