diff --git a/contrib/postgres_fdw/connection.c b/contrib/postgres_fdw/connection.c
index f382203b8f..781c526b83 100644
--- a/contrib/postgres_fdw/connection.c
+++ b/contrib/postgres_fdw/connection.c
@@ -812,12 +812,14 @@ pgfdw_xact_callback(XactEvent event, void *arg)
 		entry->xact_depth = 0;
 
 		/*
-		 * If the connection isn't in a good idle state, discard it to
-		 * recover. Next GetConnection will open a new connection.
+		 * If the connection isn't in a good idle state or it is marked as
+		 * invalid, then discard it to recover. Next GetConnection will open a
+		 * new connection.
 		 */
 		if (PQstatus(entry->conn) != CONNECTION_OK ||
 			PQtransactionStatus(entry->conn) != PQTRANS_IDLE ||
-			entry->changing_xact_state)
+			entry->changing_xact_state ||
+			entry->invalidated)
 		{
 			elog(DEBUG3, "discarding connection %p", entry->conn);
 			disconnect_pg_server(entry);
@@ -941,9 +943,12 @@ pgfdw_subxact_callback(SubXactEvent event, SubTransactionId mySubid,
  * Connection invalidation callback function
  *
  * After a change to a pg_foreign_server or pg_user_mapping catalog entry,
- * mark connections depending on that entry as needing to be remade.
- * We can't immediately destroy them, since they might be in the midst of
- * a transaction, but we'll remake them at the next opportunity.
+ * close connections depending on that entry immediately if current transaction
+ * has not used those connections yet. Otherwise, mark those connections as
+ * invalid and then make pgfdw_xact_callback() close them at the end of current
+ * transaction, since they cannot be closed in the midst of the transaction
+ * using them. Closed connections will be remade at the next opportunity if
+ * necessary.
  *
  * Although most cache invalidation callbacks blow away all the related stuff
  * regardless of the given hashvalue, connections are expensive enough that
@@ -974,7 +979,21 @@ pgfdw_inval_callback(Datum arg, int cacheid, uint32 hashvalue)
 			 entry->server_hashvalue == hashvalue) ||
 			(cacheid == USERMAPPINGOID &&
 			 entry->mapping_hashvalue == hashvalue))
-			entry->invalidated = true;
+		{
+			/*
+			 * Close the connection immediately if it's not used yet in this
+			 * transaction. Otherwise mark it as invalid so that
+			 * pgfdw_xact_callback() can close it at the end of this
+			 * transaction.
+			 */
+			if (entry->xact_depth == 0)
+			{
+				elog(DEBUG3, "discarding connection %p", entry->conn);
+				disconnect_pg_server(entry);
+			}
+			else
+				entry->invalidated = true;
+		}
 	}
 }
 
diff --git a/contrib/postgres_fdw/expected/postgres_fdw.out b/contrib/postgres_fdw/expected/postgres_fdw.out
index 8c5aa2df21..252b8dab60 100644
--- a/contrib/postgres_fdw/expected/postgres_fdw.out
+++ b/contrib/postgres_fdw/expected/postgres_fdw.out
@@ -8842,3 +8842,21 @@ SELECT b, avg(a), max(a), count(*) FROM pagg_tab GROUP BY b HAVING sum(a) < 700
 
 -- Clean-up
 RESET enable_partitionwise_aggregate;
+-- ===================================================================
+-- test connection invalidation cases
+-- ===================================================================
+-- This test case is for closing the connection in pgfdw_xact_callback
+BEGIN;
+-- Connection xact depth becomes 1 i.e. the connection is in midst of the xact.
+SELECT 1 FROM ft1 LIMIT 1;
+ ?column? 
+----------
+        1
+(1 row)
+
+-- Connection is not closed at the end of the alter statement in
+-- pgfdw_inval_callback. That's because the connection is in midst of this
+-- xact, it is just marked as invalid.
+ALTER SERVER loopback OPTIONS (ADD use_remote_estimate 'off');
+-- The invalid connection gets closed in pgfdw_xact_callback during commit.
+COMMIT;
diff --git a/contrib/postgres_fdw/sql/postgres_fdw.sql b/contrib/postgres_fdw/sql/postgres_fdw.sql
index f16684b365..a957ef1b1d 100644
--- a/contrib/postgres_fdw/sql/postgres_fdw.sql
+++ b/contrib/postgres_fdw/sql/postgres_fdw.sql
@@ -2516,3 +2516,17 @@ SELECT b, avg(a), max(a), count(*) FROM pagg_tab GROUP BY b HAVING sum(a) < 700
 
 -- Clean-up
 RESET enable_partitionwise_aggregate;
+
+-- ===================================================================
+-- test connection invalidation cases
+-- ===================================================================
+-- This test case is for closing the connection in pgfdw_xact_callback
+BEGIN;
+-- Connection xact depth becomes 1 i.e. the connection is in midst of the xact.
+SELECT 1 FROM ft1 LIMIT 1;
+-- Connection is not closed at the end of the alter statement in
+-- pgfdw_inval_callback. That's because the connection is in midst of this
+-- xact, it is just marked as invalid.
+ALTER SERVER loopback OPTIONS (ADD use_remote_estimate 'off');
+-- The invalid connection gets closed in pgfdw_xact_callback during commit.
+COMMIT;