diff --git a/server/etcdserver/api/v3rpc/watch.go b/server/etcdserver/api/v3rpc/watch.go
index 9b28319806ba..06e1fa8eb72f 100644
--- a/server/etcdserver/api/v3rpc/watch.go
+++ b/server/etcdserver/api/v3rpc/watch.go
@@ -449,6 +449,7 @@ func (sws *serverWatchStream) sendLoop() {
 			sws.mu.RUnlock()
 
 			var serr error
+			// gofail: var beforeSendWatchResponse struct{}
 			if !fragmented && !ok {
 				serr = sws.gRPCStream.Send(wr)
 			} else {
diff --git a/server/storage/mvcc/watchable_store.go b/server/storage/mvcc/watchable_store.go
index ae5c551fdfe6..ad17b2be7ace 100644
--- a/server/storage/mvcc/watchable_store.go
+++ b/server/storage/mvcc/watchable_store.go
@@ -39,6 +39,8 @@ var (
 	maxWatchersPerSync = 512
 )
 
+func ChanBufLen() int { return chanBufLen }
+
 type watchable interface {
 	watch(key, end []byte, startRev int64, id WatchID, ch chan<- WatchResponse, fcs ...FilterFunc) (*watcher, cancelFunc)
 	progress(w *watcher)
@@ -370,6 +372,11 @@ func (s *watchableStore) syncWatchers() int {
 	victims := make(watcherBatch)
 	wb := newWatcherBatch(wg, evs)
 	for w := range wg.watchers {
+		if w.minRev < compactionRev {
+			// Skip the watcher that failed to send compacted watch response due to w.ch is full.
+			// Next retry of syncWatchers would try to resend the compacted watch response to w.ch
+			continue
+		}
 		w.minRev = curRev + 1
 
 		eb, ok := wb[w]
diff --git a/server/storage/mvcc/watchable_store_test.go b/server/storage/mvcc/watchable_store_test.go
index 86e35697f326..11d397708cba 100644
--- a/server/storage/mvcc/watchable_store_test.go
+++ b/server/storage/mvcc/watchable_store_test.go
@@ -22,6 +22,7 @@ import (
 	"testing"
 	"time"
 
+	"github.com/stretchr/testify/require"
 	"go.uber.org/zap/zaptest"
 
 	"go.etcd.io/etcd/api/v3/mvccpb"
@@ -250,6 +251,66 @@ func TestWatchCompacted(t *testing.T) {
 	}
 }
 
+func TestWatchNoEventLossOnCompact(t *testing.T) {
+	oldChanBufLen, oldMaxWatchersPerSync := chanBufLen, maxWatchersPerSync
+
+	b, _ := betesting.NewDefaultTmpBackend(t)
+	lg := zaptest.NewLogger(t)
+	s := newWatchableStore(lg, b, &lease.FakeLessor{}, StoreConfig{})
+
+	defer func() {
+		cleanup(s, b)
+		chanBufLen, maxWatchersPerSync = oldChanBufLen, oldMaxWatchersPerSync
+	}()
+
+	chanBufLen, maxWatchersPerSync = 1, 4
+	testKey, testValue := []byte("foo"), []byte("bar")
+
+	maxRev := 10
+	compactRev := int64(5)
+	for i := 0; i < maxRev; i++ {
+		s.Put(testKey, testValue, lease.NoLease)
+	}
+	_, err := s.Compact(traceutil.TODO(), compactRev)
+	if err != nil {
+		t.Fatalf("failed to compact kv (%v)", err)
+	}
+
+	w := s.NewWatchStream()
+	defer w.Close()
+
+	watchers := map[WatchID]int64{
+		0: 1,
+		1: 1, // create unsyncd watchers with startRev < compactRev
+		2: 6, // create unsyncd watchers with compactRev < startRev < currentRev
+	}
+	for id, startRev := range watchers {
+		w.Watch(id, testKey, nil, startRev)
+	}
+	// fill up w.Chan() with 1 buf via 2 compacted watch response
+	s.syncWatchers()
+
+	for len(watchers) > 0 {
+		select {
+		case resp := <-w.Chan():
+			if resp.CompactRevision != 0 {
+				require.Equal(t, resp.CompactRevision, int64(5))
+				require.Contains(t, watchers, resp.WatchID)
+				delete(watchers, resp.WatchID)
+				continue
+			}
+			nextRev := watchers[resp.WatchID]
+			for _, ev := range resp.Events {
+				require.Equalf(t, nextRev, ev.Kv.ModRevision, "got event revision %d but want %d for watcher with watch ID %d", ev.Kv.ModRevision, nextRev, resp.WatchID)
+				nextRev++
+			}
+			if nextRev == s.rev()+1 {
+				delete(watchers, resp.WatchID)
+			}
+		}
+	}
+}
+
 func TestWatchFutureRev(t *testing.T) {
 	b, _ := betesting.NewDefaultTmpBackend(t)
 	s := newWatchableStore(zaptest.NewLogger(t), b, &lease.FakeLessor{}, StoreConfig{})
diff --git a/tests/integration/v3_watch_test.go b/tests/integration/v3_watch_test.go
index 40b07fc5f319..fe41a27c151d 100644
--- a/tests/integration/v3_watch_test.go
+++ b/tests/integration/v3_watch_test.go
@@ -17,6 +17,7 @@ package integration
 import (
 	"bytes"
 	"context"
+	"errors"
 	"fmt"
 	"reflect"
 	"sort"
@@ -24,13 +25,17 @@ import (
 	"testing"
 	"time"
 
+	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 
 	pb "go.etcd.io/etcd/api/v3/etcdserverpb"
 	"go.etcd.io/etcd/api/v3/mvccpb"
+	"go.etcd.io/etcd/api/v3/v3rpc/rpctypes"
 	clientv3 "go.etcd.io/etcd/client/v3"
 	"go.etcd.io/etcd/server/v3/etcdserver/api/v3rpc"
+	"go.etcd.io/etcd/server/v3/storage/mvcc"
 	"go.etcd.io/etcd/tests/v3/framework/integration"
+	gofail "go.etcd.io/gofail/runtime"
 )
 
 // TestV3WatchFromCurrentRevision tests Watch APIs from current revision.
@@ -1512,3 +1517,56 @@ func TestV3WatchProgressWaitsForSyncNoEvents(t *testing.T) {
 	}
 	require.True(t, gotProgressNotification, "Expected to get progress notification")
 }
+
+// TestV3NoEventsLostOnCompact verifies that slow watchers exit with compacted watch response
+// if its next revision of events are compacted and no lost events sent to client.
+func TestV3NoEventsLostOnCompact(t *testing.T) {
+	if integration.ThroughProxy {
+		t.Skip("grpc proxy currently does not support requesting progress notifications")
+	}
+	integration.BeforeTest(t)
+	if len(gofail.List()) == 0 {
+		t.Skip("please run 'make gofail-enable' before running the test")
+	}
+	clus := integration.NewCluster(t, &integration.ClusterConfig{Size: 1})
+	defer clus.Terminate(t)
+
+	client := clus.RandClient()
+	ctx, cancel := context.WithTimeout(context.Background(), 5*time.Second)
+	defer cancel()
+
+	// sendLoop throughput is rate-limited to 1 event per second
+	require.NoError(t, gofail.Enable("beforeSendWatchResponse", `sleep("1s")`))
+	wch := client.Watch(ctx, "foo")
+
+	var rev int64
+	writeCount := mvcc.ChanBufLen() * 11 / 10
+	for i := 0; i < writeCount; i++ {
+		resp, err := client.Put(ctx, "foo", "bar")
+		require.NoError(t, err)
+		rev = resp.Header.Revision
+	}
+	_, err := client.Compact(ctx, rev)
+	require.NoError(t, err)
+
+	time.Sleep(time.Second)
+	require.NoError(t, gofail.Disable("beforeSendWatchResponse"))
+
+	eventCount := 0
+	compacted := false
+	for resp := range wch {
+		err = resp.Err()
+		if err != nil {
+			if !errors.Is(err, rpctypes.ErrCompacted) {
+				t.Fatalf("want watch response err %v but got %v", rpctypes.ErrCompacted, err)
+			}
+			compacted = true
+			break
+		}
+		eventCount += len(resp.Events)
+		if eventCount == writeCount {
+			break
+		}
+	}
+	assert.Truef(t, compacted, "Expected stream to get compacted, instead we got %d events out of %d events", eventCount, writeCount)
+}
diff --git a/tests/robustness/makefile.mk b/tests/robustness/makefile.mk
index 381db6301b99..dee968eb63ab 100644
--- a/tests/robustness/makefile.mk
+++ b/tests/robustness/makefile.mk
@@ -36,7 +36,7 @@ GOFAIL_VERSION = $(shell cd tools/mod && go list -m -f {{.Version}} go.etcd.io/g
 
 .PHONY: gofail-enable
 gofail-enable: install-gofail
-	gofail enable server/etcdserver/ server/storage/backend/ server/storage/mvcc/ server/storage/wal/
+	gofail enable server/etcdserver/ server/storage/backend/ server/storage/mvcc/ server/storage/wal/ server/etcdserver/api/v3rpc/
 	cd ./server && go get go.etcd.io/gofail@${GOFAIL_VERSION}
 	cd ./etcdutl && go get go.etcd.io/gofail@${GOFAIL_VERSION}
 	cd ./etcdctl && go get go.etcd.io/gofail@${GOFAIL_VERSION}
@@ -44,7 +44,7 @@ gofail-enable: install-gofail
 
 .PHONY: gofail-disable
 gofail-disable: install-gofail
-	gofail disable server/etcdserver/ server/storage/backend/ server/storage/mvcc/ server/storage/wal/
+	gofail disable server/etcdserver/ server/storage/backend/ server/storage/mvcc/ server/storage/wal/ server/etcdserver/api/v3rpc/
 	cd ./server && go mod tidy
 	cd ./etcdutl && go mod tidy
 	cd ./etcdctl && go mod tidy