diff --git a/server/src/main/java/org/elasticsearch/discovery/PeerFinder.java b/server/src/main/java/org/elasticsearch/discovery/PeerFinder.java
index 2ac2f1081c4e4..05b7b438b7f9f 100644
--- a/server/src/main/java/org/elasticsearch/discovery/PeerFinder.java
+++ b/server/src/main/java/org/elasticsearch/discovery/PeerFinder.java
@@ -89,22 +89,26 @@ public void activate(final DiscoveryNodes lastAcceptedNodes) {
         logger.trace("activating with {}", lastAcceptedNodes);
 
         synchronized (mutex) {
-            assert active == false;
+            assert assertInactiveWithNoKnownPeers();
             active = true;
             this.lastAcceptedNodes = lastAcceptedNodes;
             leader = Optional.empty();
-            handleWakeUp();
+            handleWakeUp(); // return value discarded: there are no known peers, so none can be disconnected
         }
     }
 
     public void deactivate(DiscoveryNode leader) {
+        final boolean peersRemoved;
         synchronized (mutex) {
             logger.trace("deactivating and setting leader to {}", leader);
             active = false;
-            handleWakeUp();
+            peersRemoved = handleWakeUp();
             this.leader = Optional.of(leader);
             assert assertInactiveWithNoKnownPeers();
         }
+        if (peersRemoved) {
+            onFoundPeersUpdated();
+        }
     }
 
     // exposed to subclasses for testing
@@ -114,7 +118,7 @@ protected final boolean holdsLock() {
 
     boolean assertInactiveWithNoKnownPeers() {
         assert active == false;
-        assert peersByAddress.isEmpty();
+        assert peersByAddress.isEmpty() : peersByAddress.keySet();
         return true;
     }
 
@@ -142,10 +146,20 @@ private DiscoveryNode getLocalNode() {
     }
 
     /**
-     * Called on receipt of a PeersResponse from a node that believes it's an active leader, which this node should therefore try and join.
+     * Invoked on receipt of a PeersResponse from a node that believes it's an active leader, which this node should therefore try and join.
+     * Note that invocations of this method are not synchronised. By the time it is called we may have been deactivated.
      */
     protected abstract void onActiveMasterFound(DiscoveryNode masterNode, long term);
 
+    /**
+     * Invoked when the set of found peers changes. Note that invocations of this method are not fully synchronised, so we only guarantee
+     * that the change to the set of found peers happens before this method is invoked. If there are multiple concurrent changes then there
+     * will be multiple concurrent invocations of this method, with no guarantee as to their order. For this reason we do not pass the
+     * updated set of peers as an argument to this method, leaving it to the implementation to call getFoundPeers() with appropriate
+     * synchronisation to avoid lost updates. Also, by the time this method is invoked we may have been deactivated.
+     */
+    protected abstract void onFoundPeersUpdated();
+
     public interface TransportAddressConnector {
         /**
          * Identify the node at the given address and, if it is a master node and not the local node then establish a full connection to it.
@@ -170,7 +184,6 @@ public Iterable<DiscoveryNode> getFoundPeers() {
     }
 
     private List<DiscoveryNode> getFoundPeersUnderLock() {
-        assert active;
         assert holdsLock() : "PeerFinder mutex not held";
         return peersByAddress.values().stream().map(Peer::getDiscoveryNode).filter(Objects::nonNull).collect(Collectors.toList());
     }
@@ -181,16 +194,21 @@ private Peer createConnectingPeer(TransportAddress transportAddress) {
         return peer;
     }
 
-    private void handleWakeUp() {
+    /**
+     * @return whether any peers were removed due to disconnection
+     */
+    private boolean handleWakeUp() {
         assert holdsLock() : "PeerFinder mutex not held";
 
+        boolean peersRemoved = false;
+
         for (final Peer peer : peersByAddress.values()) {
-            peer.handleWakeUp();
+            peersRemoved = peer.handleWakeUp() || peersRemoved; // care: avoid short-circuiting, each peer needs waking up
         }
 
         if (active == false) {
             logger.trace("not active");
-            return;
+            return peersRemoved;
         }
 
         logger.trace("probing master nodes from cluster state: {}", lastAcceptedNodes);
@@ -220,8 +238,11 @@ public void onFailure(Exception e) {
             @Override
             protected void doRun() {
                 synchronized (mutex) {
-                    handleWakeUp();
+                    if (handleWakeUp() == false) {
+                        return;
+                    }
                 }
+                onFoundPeersUpdated();
             }
 
             @Override
@@ -229,6 +250,8 @@ public String toString() {
                 return "PeerFinder::handleWakeUp";
             }
         });
+
+        return peersRemoved;
     }
 
     private void startProbe(TransportAddress transportAddress) {
@@ -260,12 +283,12 @@ DiscoveryNode getDiscoveryNode() {
             return discoveryNode.get();
         }
 
-        void handleWakeUp() {
+        boolean handleWakeUp() {
             assert holdsLock() : "PeerFinder mutex not held";
 
             if (active == false) {
                 removePeer();
-                return;
+                return true;
             }
 
             final DiscoveryNode discoveryNode = getDiscoveryNode();
@@ -279,8 +302,11 @@ void handleWakeUp() {
                 } else {
                     logger.trace("{} no longer connected", this);
                     removePeer();
+                    return true;
                 }
             }
+
+            return false;
         }
 
         void establishConnection() {
@@ -295,12 +321,17 @@ public void onResponse(DiscoveryNode remoteNode) {
                     assert remoteNode.isMasterNode() : remoteNode + " is not master-eligible";
                     assert remoteNode.equals(getLocalNode()) == false : remoteNode + " is the local node";
                     synchronized (mutex) {
-                        if (active) {
-                            assert discoveryNode.get() == null : "discoveryNode unexpectedly already set to " + discoveryNode.get();
-                            discoveryNode.set(remoteNode);
-                            requestPeers();
+                        if (active == false) {
+                            return;
                         }
+
+                        assert discoveryNode.get() == null : "discoveryNode unexpectedly already set to " + discoveryNode.get();
+                        discoveryNode.set(remoteNode);
+                        requestPeers();
                     }
+
+                    assert holdsLock() == false : "PeerFinder mutex is held in error";
+                    onFoundPeersUpdated();
                 }
 
                 @Override
diff --git a/server/src/test/java/org/elasticsearch/discovery/PeerFinderTests.java b/server/src/test/java/org/elasticsearch/discovery/PeerFinderTests.java
index b924344e868b0..d1e669f6cc3d8 100644
--- a/server/src/test/java/org/elasticsearch/discovery/PeerFinderTests.java
+++ b/server/src/test/java/org/elasticsearch/discovery/PeerFinderTests.java
@@ -86,6 +86,7 @@ public class PeerFinderTests extends ESTestCase {
     private Set<DiscoveryNode> connectedNodes = new HashSet<>();
     private DiscoveryNodes lastAcceptedNodes;
     private TransportService transportService;
+    private Iterable<DiscoveryNode> foundPeersFromNotification;
 
     private static long CONNECTION_TIMEOUT_MILLIS = 30000;
 
@@ -156,6 +157,13 @@ protected void onActiveMasterFound(DiscoveryNode masterNode, long term) {
             discoveredMasterNode = masterNode;
             discoveredMasterTerm = OptionalLong.of(term);
         }
+
+        @Override
+        protected void onFoundPeersUpdated() {
+            assert holdsLock() == false : "PeerFinder lock held in error";
+            foundPeersFromNotification = getFoundPeers();
+            logger.trace("onFoundPeersUpdated({})", foundPeersFromNotification);
+        }
     }
 
     private void resolveConfiguredHosts(Consumer<List<TransportAddress>> onResult) {
@@ -214,13 +222,13 @@ public void setup() {
         lastAcceptedNodes = DiscoveryNodes.builder().localNodeId(localNode.getId()).add(localNode).build();
 
         peerFinder = new TestPeerFinder(settings, transportService, transportAddressConnector);
+        foundPeersFromNotification = emptyList();
     }
 
     @After
     public void deactivateAndRunRemainingTasks() {
         peerFinder.deactivate(localNode);
-        deterministicTaskQueue.runAllTasks(); // termination ensures that everything is properly cleaned up
-        peerFinder.assertInactiveWithNoKnownPeers(); // should eventually have no nodes when deactivated
+        deterministicTaskQueue.runAllRunnableTasks(random());
     }
 
     public void testAddsReachableNodesFromUnicastHostsList() {
@@ -693,6 +701,13 @@ private void assertFoundPeers(DiscoveryNode... expectedNodesArray) {
         final Stream<DiscoveryNode> expectedNodes = Arrays.stream(expectedNodesArray);
         final Stream<DiscoveryNode> actualNodes = StreamSupport.stream(peerFinder.getFoundPeers().spliterator(), false);
         assertThat(actualNodes.collect(Collectors.toSet()), equalTo(expectedNodes.collect(Collectors.toSet())));
+        assertNotifiedOfAllUpdates();
+    }
+
+    private void assertNotifiedOfAllUpdates() {
+        final Stream<DiscoveryNode> actualNodes = StreamSupport.stream(peerFinder.getFoundPeers().spliterator(), false);
+        final Stream<DiscoveryNode> notifiedNodes = StreamSupport.stream(foundPeersFromNotification.spliterator(), false);
+        assertThat(notifiedNodes.collect(Collectors.toSet()), equalTo(actualNodes.collect(Collectors.toSet())));
     }
 
     private DiscoveryNode newDiscoveryNode(String nodeId) {
@@ -700,7 +715,19 @@ private DiscoveryNode newDiscoveryNode(String nodeId) {
     }
 
     private void runAllRunnableTasks() {
+        deterministicTaskQueue.scheduleNow(new Runnable() {
+            @Override
+            public void run() {
+                PeerFinderTests.this.assertNotifiedOfAllUpdates();
+            }
+
+            @Override
+            public String toString() {
+                return "assertNotifiedOfAllUpdates";
+            }
+        });
         deterministicTaskQueue.runAllRunnableTasks(random());
+        assertNotifiedOfAllUpdates();
     }
 }