diff --git a/xds/internal/balancer/clusterimpl/balancer_test.go b/xds/internal/balancer/clusterimpl/balancer_test.go
index c2e1253c8f4d..6e9eaa5cbab9 100644
--- a/xds/internal/balancer/clusterimpl/balancer_test.go
+++ b/xds/internal/balancer/clusterimpl/balancer_test.go
@@ -943,6 +943,72 @@ func (s) TestFailedToParseChildPolicyConfig(t *testing.T) {
 	}
 }
 
+// Test verify that the case picker is updated synchronously on receipt of
+// configuration update.
+func (s) TestPickerUpdatedSynchronouslyOnConfigUpdate(t *testing.T) {
+	// Override the newPickerUpdated to be notified that picker was updated.
+	pickerUpdated := make(chan struct{}, 1)
+	origNewPickerUpdated := newPickerUpdated
+	newPickerUpdated = func() {
+		t.Logf("Sending picker update.")
+		pickerUpdated <- struct{}{}
+	}
+	defer func() { newPickerUpdated = origNewPickerUpdated }()
+
+	// Override the newConfigHook to ensure picker was updated.
+	clientConnUpdateDone := make(chan struct{}, 1)
+	origClientConnUpdateHook := clientConnUpdateHook
+	clientConnUpdateHook = func() {
+		// Verify that picker was updated before the completion of
+		// client conn update.
+		<-pickerUpdated
+		clientConnUpdateDone <- struct{}{}
+	}
+	defer func() { clientConnUpdateHook = origClientConnUpdateHook }()
+
+	defer xdsclient.ClearCounterForTesting(testClusterName, testServiceName)
+	xdsC := fakeclient.NewClient()
+
+	builder := balancer.Get(Name)
+	cc := testutils.NewBalancerClientConn(t)
+	b := builder.Build(cc, balancer.BuildOptions{})
+	defer b.Close()
+
+	// Create a stub balancer which waits for the cluster_impl policy to be
+	// closed before sending a picker update (upon receipt of a subConn state
+	// change).
+	const childPolicyName = "stubBalancer-PickerUpdatedSynchronouslyOnConfigUpdate"
+	stub.Register(childPolicyName, stub.BalancerFuncs{
+		UpdateClientConnState: func(bd *stub.BalancerData, _ balancer.ClientConnState) error {
+			bd.ClientConn.UpdateState(balancer.State{
+				Picker: base.NewErrPicker(errors.New("dummy error picker")),
+			})
+			return nil
+		},
+	})
+
+	if err := b.UpdateClientConnState(balancer.ClientConnState{
+		ResolverState: xdsclient.SetClient(resolver.State{Addresses: testBackendAddrs}, xdsC),
+		BalancerConfig: &LBConfig{
+			Cluster:        testClusterName,
+			EDSServiceName: testServiceName,
+			ChildPolicy: &internalserviceconfig.BalancerConfig{
+				Name: childPolicyName,
+			},
+		},
+	}); err != nil {
+		t.Fatalf("unexpected error from UpdateClientConnState: %v", err)
+	}
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+	select {
+	case <-clientConnUpdateDone:
+	case <-ctx.Done():
+		t.Fatal("Timed out waiting for client conn update to be completed.")
+	}
+}
+
 func assertString(f func() (string, error)) string {
 	s, err := f()
 	if err != nil {
diff --git a/xds/internal/balancer/clusterimpl/clusterimpl.go b/xds/internal/balancer/clusterimpl/clusterimpl.go
index bbd754c3f4c0..e752f64417ea 100644
--- a/xds/internal/balancer/clusterimpl/clusterimpl.go
+++ b/xds/internal/balancer/clusterimpl/clusterimpl.go
@@ -56,6 +56,10 @@ const (
 var (
 	connectedAddress  = internal.ConnectedAddress.(func(balancer.SubConnState) resolver.Address)
 	errBalancerClosed = fmt.Errorf("%s LB policy is closed", Name)
+	// Below function is no-op in actual code, but can be overridden in
+	// tests to give tests visibility into exactly when certain events happen.
+	clientConnUpdateHook = func() {}
+	newPickerUpdated     = func() {}
 )
 
 func init() {
@@ -102,12 +106,20 @@ type clusterImplBalancer struct {
 	lrsServer        *bootstrap.ServerConfig
 	loadWrapper      *loadstore.Wrapper
 
+	// Set during UpdateClientConnState when pushing updates to child policy.
+	// Prevents state updates from child policy causing new pickers to be sent
+	// up the channel. Cleared after child policy have processed the
+	// updates sent to them, after which a new picker is sent up the channel.
+	inhibitPickerUpdates bool
+
 	clusterNameMu sync.Mutex
 	clusterName   string
 
 	serializer       *grpcsync.CallbackSerializer
 	serializerCancel context.CancelFunc
 
+	mu sync.Mutex // guards childState and inhibitPickerUpdates
+
 	// childState/drops/requestCounter keeps the state used by the most recently
 	// generated picker.
 	childState            balancer.State
@@ -199,6 +211,8 @@ func (b *clusterImplBalancer) updateLoadStore(newConfig *LBConfig) error {
 }
 
 func (b *clusterImplBalancer) updateClientConnState(s balancer.ClientConnState) error {
+	defer clientConnUpdateHook()
+
 	if b.logger.V(2) {
 		b.logger.Infof("Received configuration: %s", pretty.ToJSON(s.BalancerConfig))
 	}
@@ -242,24 +256,32 @@ func (b *clusterImplBalancer) updateClientConnState(s balancer.ClientConnState)
 	}
 
 	b.config = newConfig
+	// Addresses and sub-balancer config are sent to sub-balancer.
+	err = b.child.UpdateClientConnState(balancer.ClientConnState{
+		ResolverState:  s.ResolverState,
+		BalancerConfig: parsedCfg,
+	})
 
+	b.mu.Lock()
+	b.inhibitPickerUpdates = false
+	childState := b.childState
+	b.mu.Unlock()
 	b.telemetryLabels = newConfig.TelemetryLabels
 	dc := b.handleDropAndRequestCount(newConfig)
-	if dc != nil && b.childState.Picker != nil {
+	if dc != nil && childState.Picker != nil {
 		b.ClientConn.UpdateState(balancer.State{
-			ConnectivityState: b.childState.ConnectivityState,
+			ConnectivityState: childState.ConnectivityState,
 			Picker:            b.newPicker(dc),
 		})
 	}
-
-	// Addresses and sub-balancer config are sent to sub-balancer.
-	return b.child.UpdateClientConnState(balancer.ClientConnState{
-		ResolverState:  s.ResolverState,
-		BalancerConfig: parsedCfg,
-	})
+	newPickerUpdated()
+	return err
 }
 
 func (b *clusterImplBalancer) UpdateClientConnState(s balancer.ClientConnState) error {
+	b.mu.Lock()
+	b.inhibitPickerUpdates = true
+	b.mu.Unlock()
 	// Handle the update in a blocking fashion.
 	errCh := make(chan error, 1)
 	callback := func(context.Context) {