diff --git a/driver.go b/driver.go
index a359701b..147b78b4 100644
--- a/driver.go
+++ b/driver.go
@@ -431,7 +431,9 @@ func RunTransaction(ctx context.Context, db *sql.DB, opts *sql.TxOptions, f func
 	if err != nil {
 		return err
 	}
-	defer conn.Close()
+	defer func() {
+		_ = conn.Close()
+	}()
 
 	// We don't need to keep track of a running checksum for retries when using
 	// this method, so we disable internal retries.
@@ -452,7 +454,9 @@ func RunTransaction(ctx context.Context, db *sql.DB, opts *sql.TxOptions, f func
 	}
 	// Reset the flag for internal retries after the transaction (if applicable).
 	if origRetryAborts {
-		defer func() { _ = spannerConn.SetRetryAbortsInternally(origRetryAborts) }()
+		defer func() {
+			_ = spannerConn.SetRetryAbortsInternally(origRetryAborts)
+		}()
 	}
 
 	tx, err := conn.BeginTx(ctx, opts)
@@ -461,11 +465,13 @@ func RunTransaction(ctx context.Context, db *sql.DB, opts *sql.TxOptions, f func
 	}
 	for {
 		err = f(ctx, tx)
+		errDuringCommit := false
 		if err == nil {
 			err = tx.Commit()
 			if err == nil {
 				return nil
 			}
+			errDuringCommit = true
 		}
 		// Rollback and return the error if:
 		// 1. The connection is not a Spanner connection.
@@ -493,12 +499,23 @@ func RunTransaction(ctx context.Context, db *sql.DB, opts *sql.TxOptions, f func
 			}
 		}
 
-		// TODO: Reset the existing transaction for retry instead of creating a new one.
-		_ = tx.Rollback()
-		tx, err = conn.BeginTx(ctx, opts)
+		// Reset the transaction after it was aborted.
+		err = spannerConn.resetTransactionForRetry(ctx, errDuringCommit)
 		if err != nil {
+			_ = tx.Rollback()
 			return err
 		}
+		// This does not actually start a new transaction, instead it
+		// continues with the previous transaction that was already reset.
+		// We need to do this, because the sql package registers the
+		// transaction as 'done' when Commit has been called, also if the
+		// commit fails.
+		if errDuringCommit {
+			tx, err = conn.BeginTx(ctx, opts)
+			if err != nil {
+				return err
+			}
+		}
 	}
 }
 
@@ -596,17 +613,25 @@ type SpannerConn interface {
 	// this function on different connections to the same database, can
 	// return the same Spanner client.
 	UnderlyingClient() (client *spanner.Client, err error)
+
+	// resetTransactionForRetry resets the current transaction after it has
+	// been aborted by Spanner. Calling this function on a transaction that
+	// has not been aborted is not supported and will cause an error to be
+	// returned.
+	resetTransactionForRetry(ctx context.Context, errDuringCommit bool) error
 }
 
 type conn struct {
-	connector   *connector
-	closed      bool
-	client      *spanner.Client
-	adminClient *adminapi.DatabaseAdminClient
-	tx          contextTransaction
-	commitTs    *time.Time
-	database    string
-	retryAborts bool
+	connector     *connector
+	closed        bool
+	client        *spanner.Client
+	adminClient   *adminapi.DatabaseAdminClient
+	tx            contextTransaction
+	prevTx        contextTransaction
+	resetForRetry bool
+	commitTs      *time.Time
+	database      string
+	retryAborts   bool
 
 	execSingleQuery            func(ctx context.Context, c *spanner.Client, statement spanner.Statement, bound spanner.TimestampBound) *spanner.RowIterator
 	execSingleDMLTransactional func(ctx context.Context, c *spanner.Client, statement spanner.Statement, transactionOptions spanner.TransactionOptions) (int64, time.Time, error)
@@ -1169,11 +1194,32 @@ func (c *conn) Close() error {
 	return c.connector.decreaseConnCount()
 }
 
+func noTransaction() error {
+	return status.Errorf(codes.FailedPrecondition, "connection does not have a transaction")
+}
+
+func (c *conn) resetTransactionForRetry(ctx context.Context, errDuringCommit bool) error {
+	if errDuringCommit {
+		if c.prevTx == nil {
+			return noTransaction()
+		}
+		c.tx = c.prevTx
+		c.resetForRetry = true
+	} else if c.tx == nil {
+		return noTransaction()
+	}
+	return c.tx.resetForRetry(ctx)
+}
+
 func (c *conn) Begin() (driver.Tx, error) {
 	return c.BeginTx(context.Background(), driver.TxOptions{})
 }
 
 func (c *conn) BeginTx(ctx context.Context, opts driver.TxOptions) (driver.Tx, error) {
+	if c.resetForRetry {
+		c.resetForRetry = false
+		return c.tx, nil
+	}
 	if c.inTransaction() {
 		return nil, spanner.ToSpannerError(status.Errorf(codes.FailedPrecondition, "already in a transaction"))
 	}
@@ -1202,6 +1248,7 @@ func (c *conn) BeginTx(ctx context.Context, opts driver.TxOptions) (driver.Tx, e
 		client: c.client,
 		rwTx:   tx,
 		close: func(commitTs *time.Time, commitErr error) {
+			c.prevTx = c.tx
 			c.tx = nil
 			if commitErr == nil {
 				c.commitTs = commitTs
diff --git a/transaction.go b/transaction.go
index 7f6aaec0..465024a5 100644
--- a/transaction.go
+++ b/transaction.go
@@ -32,6 +32,7 @@ import (
 type contextTransaction interface {
 	Commit() error
 	Rollback() error
+	resetForRetry(ctx context.Context) error
 	Query(ctx context.Context, stmt spanner.Statement) rowIterator
 	ExecContext(ctx context.Context, stmt spanner.Statement) (int64, error)
 
@@ -89,6 +90,11 @@ func (tx *readOnlyTransaction) Rollback() error {
 	return nil
 }
 
+func (tx *readOnlyTransaction) resetForRetry(ctx context.Context) error {
+	// no-op
+	return nil
+}
+
 func (tx *readOnlyTransaction) Query(ctx context.Context, stmt spanner.Statement) rowIterator {
 	return &readOnlyRowIterator{tx.roTx.Query(ctx, stmt)}
 }
@@ -295,6 +301,15 @@ func (tx *readWriteTransaction) Rollback() error {
 	return nil
 }
 
+func (tx *readWriteTransaction) resetForRetry(ctx context.Context) error {
+	t, err := tx.rwTx.ResetForRetry(ctx)
+	if err != nil {
+		return err
+	}
+	tx.rwTx = t
+	return nil
+}
+
 // Query executes a query using the read/write transaction and returns a
 // rowIterator that will automatically retry the read/write transaction if the
 // transaction is aborted during the query or while iterating the returned rows.