diff --git a/unixfs/io/dagreader_test.go b/unixfs/io/dagreader_test.go
index e3d3d042b23..7cbe35bb5f4 100644
--- a/unixfs/io/dagreader_test.go
+++ b/unixfs/io/dagreader_test.go
@@ -122,6 +122,41 @@ func TestSeekAndReadLarge(t *testing.T) {
 	}
 }
 
+func TestReadAndCancel(t *testing.T) {
+	dserv := testu.GetDAGServ()
+	inbuf := make([]byte, 20000)
+	rand.Read(inbuf)
+
+	node := testu.GetNode(t, dserv, inbuf, testu.UseProtoBufLeaves)
+	ctx, closer := context.WithCancel(context.Background())
+	defer closer()
+
+	reader, err := NewDagReader(ctx, node, dserv)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	ctx, cancel := context.WithCancel(context.Background())
+	buf := make([]byte, 100)
+	_, err = reader.CtxReadFull(ctx, buf)
+	if err != nil {
+		t.Fatal(err)
+	}
+	if !bytes.Equal(buf, inbuf[0:100]) {
+		t.Fatal("read failed")
+	}
+	cancel()
+
+	b, err := ioutil.ReadAll(reader)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	if !bytes.Equal(inbuf[100:], b) {
+		t.Fatal("buffers not equal")
+	}
+}
+
 func TestRelativeSeek(t *testing.T) {
 	dserv := testu.GetDAGServ()
 	ctx, closer := context.WithCancel(context.Background())
diff --git a/unixfs/io/pbdagreader.go b/unixfs/io/pbdagreader.go
index ce53d67118d..42d903aac26 100644
--- a/unixfs/io/pbdagreader.go
+++ b/unixfs/io/pbdagreader.go
@@ -68,16 +68,13 @@ func NewPBFileReader(ctx context.Context, n *mdag.ProtoNode, pb *ftpb.Data, serv
 
 const preloadSize = 10
 
-func (dr *PBDagReader) preloadNextNodes(ctx context.Context) {
-	beg := dr.linkPosition
+func (dr *PBDagReader) preload(ctx context.Context, beg int) {
 	end := beg + preloadSize
 	if end >= len(dr.links) {
 		end = len(dr.links)
 	}
 
-	for i, p := range ipld.GetNodes(ctx, dr.serv, dr.links[beg:end]) {
-		dr.promises[beg+i] = p
-	}
+	copy(dr.promises[beg:], ipld.GetNodes(ctx, dr.serv, dr.links[beg:end]))
 }
 
 // precalcNextBuf follows the next link in line and loads it from the
@@ -92,15 +89,42 @@ func (dr *PBDagReader) precalcNextBuf(ctx context.Context) error {
 		return io.EOF
 	}
 
-	if dr.promises[dr.linkPosition] == nil {
-		dr.preloadNextNodes(ctx)
+	// If we drop to <= preloadSize/2 preloading nodes, preload the next 10.
+	for i := dr.linkPosition; i < dr.linkPosition+preloadSize/2 && i < len(dr.promises); i++ {
+		// TODO: check if canceled.
+		if dr.promises[i] == nil {
+			dr.preload(ctx, i)
+			break
+		}
 	}
 
 	nxt, err := dr.promises[dr.linkPosition].Get(ctx)
-	if err != nil {
+	dr.promises[dr.linkPosition] = nil
+	switch err {
+	case nil:
+	case context.DeadlineExceeded, context.Canceled:
+		err = ctx.Err()
+		if err != nil {
+			return ctx.Err()
+		}
+		// In this case, the context used to *preload* the node has been canceled.
+		// We need to retry the load with our context and we might as
+		// well preload some extra nodes while we're at it.
+		//
+		// Note: When using `Read`, this code will never execute as
+		// `Read` will use the global context. It only runs if the user
+		// explicitly reads with a custom context (e.g., by calling
+		// `CtxReadFull`).
+		dr.preload(ctx, dr.linkPosition)
+		nxt, err = dr.promises[dr.linkPosition].Get(ctx)
+		dr.promises[dr.linkPosition] = nil
+		if err != nil {
+			return err
+		}
+	default:
 		return err
 	}
-	dr.promises[dr.linkPosition] = nil
+
 	dr.linkPosition++
 
 	switch nxt := nxt.(type) {