diff --git a/CHANGELOG_PENDING.md b/CHANGELOG_PENDING.md
index 1c5f3d9cf2f..9d71da216bd 100644
--- a/CHANGELOG_PENDING.md
+++ b/CHANGELOG_PENDING.md
@@ -25,4 +25,4 @@
 - [config] \#9483 Calling `tendermint init` would incorrectly leave out the new
   `[storage]` section delimiter in the generated configuration file - this has
   now been fixed
-
+- [p2p] \#9500 prevent peers who have errored being added to the peer_set (@jmalicevic)
diff --git a/blockchain/v2/reactor_test.go b/blockchain/v2/reactor_test.go
index a135d68fd86..57a4a00b41d 100644
--- a/blockchain/v2/reactor_test.go
+++ b/blockchain/v2/reactor_test.go
@@ -59,6 +59,9 @@ func (mp mockPeer) TrySend(byte, []byte) bool { return true }
 func (mp mockPeer) Set(string, interface{}) {}
 func (mp mockPeer) Get(string) interface{}  { return struct{}{} }
 
+func (mp mockPeer) SetRemovalFailed()      {}
+func (mp mockPeer) GetRemovalFailed() bool { return false }
+
 type mockBlockStore struct {
 	blocks map[int64]*types.Block
 }
diff --git a/p2p/errors.go b/p2p/errors.go
index 3650a7a0a8e..4fc915292fb 100644
--- a/p2p/errors.go
+++ b/p2p/errors.go
@@ -145,6 +145,13 @@ func (e ErrTransportClosed) Error() string {
 	return "transport has been closed"
 }
 
+// ErrPeerRemoval is raised when attempting to remove a peer results in an error.
+type ErrPeerRemoval struct{}
+
+func (e ErrPeerRemoval) Error() string {
+	return "peer removal failed"
+}
+
 //-------------------------------------------------------------------
 
 type ErrNetAddressNoID struct {
diff --git a/p2p/mock/peer.go b/p2p/mock/peer.go
index 59f6e0f4aa4..10254c3437a 100644
--- a/p2p/mock/peer.go
+++ b/p2p/mock/peer.go
@@ -68,3 +68,5 @@ func (mp *Peer) RemoteIP() net.IP            { return mp.ip }
 func (mp *Peer) SocketAddr() *p2p.NetAddress { return mp.addr }
 func (mp *Peer) RemoteAddr() net.Addr        { return &net.TCPAddr{IP: mp.ip, Port: 8800} }
 func (mp *Peer) CloseConn() error            { return nil }
+func (mp *Peer) SetRemovalFailed()           {}
+func (mp *Peer) GetRemovalFailed() bool      { return false }
diff --git a/p2p/mocks/peer.go b/p2p/mocks/peer.go
index f739a0b2126..c4d89375cb5 100644
--- a/p2p/mocks/peer.go
+++ b/p2p/mocks/peer.go
@@ -53,6 +53,20 @@ func (_m *Peer) Get(_a0 string) interface{} {
 	return r0
 }
 
+// GetRemovalFailed provides a mock function with given fields:
+func (_m *Peer) GetRemovalFailed() bool {
+	ret := _m.Called()
+
+	var r0 bool
+	if rf, ok := ret.Get(0).(func() bool); ok {
+		r0 = rf()
+	} else {
+		r0 = ret.Get(0).(bool)
+	}
+
+	return r0
+}
+
 // ID provides a mock function with given fields:
 func (_m *Peer) ID() p2p.ID {
 	ret := _m.Called()
@@ -244,6 +258,11 @@ func (_m *Peer) SetLogger(_a0 log.Logger) {
 	_m.Called(_a0)
 }
 
+// SetRemovalFailed provides a mock function with given fields:
+func (_m *Peer) SetRemovalFailed() {
+	_m.Called()
+}
+
 // SocketAddr provides a mock function with given fields:
 func (_m *Peer) SocketAddr() *p2p.NetAddress {
 	ret := _m.Called()
diff --git a/p2p/peer.go b/p2p/peer.go
index 751ca3cf286..d8d61a7a00b 100644
--- a/p2p/peer.go
+++ b/p2p/peer.go
@@ -39,6 +39,9 @@ type Peer interface {
 
 	Set(string, interface{})
 	Get(string) interface{}
+
+	SetRemovalFailed()
+	GetRemovalFailed() bool
 }
 
 //----------------------------------------------------------
@@ -117,6 +120,9 @@ type peer struct {
 
 	metrics       *Metrics
 	metricsTicker *time.Ticker
+
+	// When removal of a peer fails, we set this flag
+	removalAttemptFailed bool
 }
 
 type PeerOption func(*peer)
@@ -316,6 +322,14 @@ func (p *peer) CloseConn() error {
 	return p.peerConn.conn.Close()
 }
 
+func (p *peer) SetRemovalFailed() {
+	p.removalAttemptFailed = true
+}
+
+func (p *peer) GetRemovalFailed() bool {
+	return p.removalAttemptFailed
+}
+
 //---------------------------------------------------
 // methods only used for testing
 // TODO: can we remove these?
diff --git a/p2p/peer_set.go b/p2p/peer_set.go
index 38dff7a9fb5..30bcc4d32f5 100644
--- a/p2p/peer_set.go
+++ b/p2p/peer_set.go
@@ -47,6 +47,9 @@ func (ps *PeerSet) Add(peer Peer) error {
 	if ps.lookup[peer.ID()] != nil {
 		return ErrSwitchDuplicatePeerID{peer.ID()}
 	}
+	if peer.GetRemovalFailed() {
+		return ErrPeerRemoval{}
+	}
 
 	index := len(ps.list)
 	// Appending is safe even with other goroutines
@@ -107,6 +110,12 @@ func (ps *PeerSet) Remove(peer Peer) bool {
 
 	item := ps.lookup[peer.ID()]
 	if item == nil {
+		// Removing the peer has failed so we set a flag to mark that a removal was attempted.
+		// This can happen when the peer add routine from the switch is running in
+		// parallel to the receive routine of MConn.
+		// There is an error within MConn but the switch has not actually added the peer to the peer set yet.
+		// Setting this flag will prevent a peer from being added to a node's peer set afterwards.
+		peer.SetRemovalFailed()
 		return false
 	}
 
diff --git a/p2p/peer_set_test.go b/p2p/peer_set_test.go
index b61b43f10af..db3d9261e27 100644
--- a/p2p/peer_set_test.go
+++ b/p2p/peer_set_test.go
@@ -32,6 +32,8 @@ func (mp *mockPeer) RemoteIP() net.IP                        { return mp.ip }
 func (mp *mockPeer) SocketAddr() *NetAddress                 { return nil }
 func (mp *mockPeer) RemoteAddr() net.Addr                    { return &net.TCPAddr{IP: mp.ip, Port: 8800} }
 func (mp *mockPeer) CloseConn() error                        { return nil }
+func (mp *mockPeer) SetRemovalFailed()                       {}
+func (mp *mockPeer) GetRemovalFailed() bool                  { return false }
 
 // Returns a mock peer
 func newMockPeer(ip net.IP) *mockPeer {
diff --git a/p2p/switch.go b/p2p/switch.go
index 3214de22305..884fd883e6f 100644
--- a/p2p/switch.go
+++ b/p2p/switch.go
@@ -370,6 +370,10 @@ func (sw *Switch) stopAndRemovePeer(peer Peer, reason interface{}) {
 	// https://github.com/tendermint/tendermint/issues/3338
 	if sw.peers.Remove(peer) {
 		sw.metrics.Peers.Add(float64(-1))
+	} else {
+		// Removal of the peer has failed. The function above sets a flag within the peer to mark this.
+		// We keep this message here as information to the developer.
+		sw.Logger.Debug("error on peer removal", ",", "peer", peer.ID())
 	}
 }
 
@@ -824,6 +828,12 @@ func (sw *Switch) addPeer(p Peer) error {
 	// so that if Receive errors, we will find the peer and remove it.
 	// Add should not err since we already checked peers.Has().
 	if err := sw.peers.Add(p); err != nil {
+		switch err.(type) {
+		case ErrPeerRemoval:
+			sw.Logger.Error("Error starting peer ",
+				" err ", "Peer has already errored and removal was attempted.",
+				"peer", p.ID())
+		}
 		return err
 	}
 	sw.metrics.Peers.Add(float64(1))
diff --git a/p2p/switch_test.go b/p2p/switch_test.go
index 36420d333c3..11de0a4426f 100644
--- a/p2p/switch_test.go
+++ b/p2p/switch_test.go
@@ -836,3 +836,16 @@ func BenchmarkSwitchBroadcast(b *testing.B) {
 
 	b.Logf("success: %v, failure: %v", numSuccess, numFailure)
 }
+
+func TestSwitchRemovalErr(t *testing.T) {
+
+	sw1, sw2 := MakeSwitchPair(t, func(i int, sw *Switch) *Switch {
+		return initSwitchFunc(i, sw)
+	})
+	assert.Equal(t, len(sw1.Peers().List()), 1)
+	p := sw1.Peers().List()[0]
+
+	sw2.StopPeerForError(p, fmt.Errorf("peer should error"))
+
+	assert.Equal(t, sw2.peers.Add(p).Error(), ErrPeerRemoval{}.Error())
+}
diff --git a/test/fuzz/p2p/pex/reactor_receive.go b/test/fuzz/p2p/pex/reactor_receive.go
index 4ac06c89273..4d0ef65257c 100644
--- a/test/fuzz/p2p/pex/reactor_receive.go
+++ b/test/fuzz/p2p/pex/reactor_receive.go
@@ -84,3 +84,5 @@ func (fp *fuzzPeer) Send(byte, []byte) bool            { return true }
 func (fp *fuzzPeer) TrySend(byte, []byte) bool         { return true }
 func (fp *fuzzPeer) Set(key string, value interface{}) { fp.m[key] = value }
 func (fp *fuzzPeer) Get(key string) interface{}        { return fp.m[key] }
+func (fp *fuzzPeer) SetRemovalFailed()                 {}
+func (fp *fuzzPeer) GetRemovalFailed() bool            { return false }