diff --git a/lightning-liquidity/src/lsps2/service.rs b/lightning-liquidity/src/lsps2/service.rs
index 578a2f14e50..e60efa5c196 100644
--- a/lightning-liquidity/src/lsps2/service.rs
+++ b/lightning-liquidity/src/lsps2/service.rs
@@ -474,7 +474,7 @@ impl PeerState {
 		self.outbound_channels_by_intercept_scid.insert(intercept_scid, channel);
 	}
 
-	fn peer_disconnected(&mut self) {
+	fn prune_expired_request_state(&mut self) {
 		self.pending_requests.retain(|_, entry| {
 			match entry {
 				LSPS2Request::GetInfo(_) => false,
@@ -495,6 +495,11 @@ impl PeerState {
 			true
 		});
 	}
+
+	fn is_prunable(&self) -> bool {
+		// Return whether the entire state is empty.
+		self.pending_requests.is_empty() && self.outbound_channels_by_intercept_scid.is_empty()
+	}
 }
 
 /// The main object allowing to send and receive LSPS2 messages.
@@ -1270,12 +1275,29 @@ where
 	}
 
 	pub(crate) fn peer_disconnected(&self, counterparty_node_id: PublicKey) {
-		let outer_state_lock = self.per_peer_state.write().unwrap();
-		if let Some(inner_state_lock) = outer_state_lock.get(&counterparty_node_id) {
-			let mut peer_state_lock = inner_state_lock.lock().unwrap();
-			peer_state_lock.peer_disconnected();
+		let mut outer_state_lock = self.per_peer_state.write().unwrap();
+		let is_prunable =
+			if let Some(inner_state_lock) = outer_state_lock.get(&counterparty_node_id) {
+				let mut peer_state_lock = inner_state_lock.lock().unwrap();
+				peer_state_lock.prune_expired_request_state();
+				peer_state_lock.is_prunable()
+			} else {
+				return;
+			};
+		if is_prunable {
+			outer_state_lock.remove(&counterparty_node_id);
 		}
 	}
+
+	#[allow(clippy::bool_comparison)]
+	pub(crate) fn prune_peer_state(&self) {
+		let mut outer_state_lock = self.per_peer_state.write().unwrap();
+		outer_state_lock.retain(|_, inner_state_lock| {
+			let mut peer_state_lock = inner_state_lock.lock().unwrap();
+			peer_state_lock.prune_expired_request_state();
+			peer_state_lock.is_prunable() == false
+		});
+	}
 }
 
 impl<CM: Deref + Clone> ProtocolMessageHandler for LSPS2ServiceHandler<CM>
diff --git a/lightning-liquidity/src/manager.rs b/lightning-liquidity/src/manager.rs
index a7e2a7913a1..0c03e5128f8 100644
--- a/lightning-liquidity/src/manager.rs
+++ b/lightning-liquidity/src/manager.rs
@@ -684,6 +684,9 @@ where
 
 	fn best_block_updated(&self, _header: &bitcoin::block::Header, _height: u32) {
 		// TODO: Call best_block_updated on all sub-modules that require it, e.g., LSPS1MessageHandler.
+		if let Some(lsps2_service_handler) = self.lsps2_service_handler.as_ref() {
+			lsps2_service_handler.prune_peer_state();
+		}
 	}
 
 	fn get_relevant_txids(&self) -> Vec<(bitcoin::Txid, u32, Option<bitcoin::BlockHash>)> {