diff --git a/pubsub/google/cloud/pubsub_v1/subscriber/_consumer.py b/pubsub/google/cloud/pubsub_v1/subscriber/_consumer.py
index 1cf757c52bd0..63e41dbe8ef0 100644
--- a/pubsub/google/cloud/pubsub_v1/subscriber/_consumer.py
+++ b/pubsub/google/cloud/pubsub_v1/subscriber/_consumer.py
@@ -228,6 +228,36 @@ def __iter__(self):
             yield item
 
 
+def _pausable_response_iterator(iterator, can_continue, period=1):
+    """Converts a gRPC response iterator into one that can be paused.
+
+    The ``can_continue`` event can be used by an independent, concurrent
+    worker to pause and resume the iteration over ``iterator``.
+
+    Args:
+        iterator (grpc.RpcContext, Iterator[protobuf.Message]): A
+            ``grpc.RpcContext`` instance that is also an iterator of responses.
+            This is a typically returned from grpc's streaming response call
+            types.
+        can_continue (threading.Event): An event which determines if we
+            can advance to the next iteration. Will be ``wait()``-ed on
+            before consuming more items from the iterator.
+        period (float): The number of seconds to wait to be able to consume
+            before checking if the RPC is cancelled. In practice, this
+            determines the maximum amount of time that ``next()`` on this
+            iterator will block after the RPC is cancelled.
+
+    Yields:
+        Any: The items yielded from ``iterator``.
+    """
+    while True:
+        can_yield = can_continue.wait(timeout=period)
+        # Calling next() on a cancelled RPC will cause it to raise the
+        # grpc.RpcError associated with the cancellation.
+        if can_yield or not iterator.is_active():
+            yield next(iterator)
+
+
 class Consumer(object):
     """Bi-directional streaming RPC consumer.
 
@@ -328,7 +358,7 @@ def _blocking_consume(self, policy):
                 self._request_queue, initial_request=initial_request)
             rpc = policy.call_rpc(iter(request_generator))
             request_generator.rpc = rpc
-            responses = _pausable_iterator(rpc, self._can_consume)
+            responses = _pausable_response_iterator(rpc, self._can_consume)
             try:
                 for response in responses:
                     _LOGGER.debug('Received response on stream')
@@ -439,23 +469,3 @@ def stop_consuming(self):
         """
         thread = self._stop_no_join()
         thread.join()
-
-
-def _pausable_iterator(iterator, can_continue):
-    """Converts a standard iterator into one that can be paused.
-
-    The ``can_continue`` event can be used by an independent, concurrent
-    worker to pause and resume the iteration over ``iterator``.
-
-    Args:
-        iterator (Iterator): Any iterator to be iterated over.
-        can_continue (threading.Event): An event which determines if we
-            can advance to the next iteration. Will be ``wait()``-ed on
-            before
-
-    Yields:
-        Any: The items from ``iterator``.
-    """
-    while True:
-        can_continue.wait()
-        yield next(iterator)
diff --git a/pubsub/tests/unit/pubsub_v1/subscriber/test_consumer.py b/pubsub/tests/unit/pubsub_v1/subscriber/test_consumer.py
index f54de7484d22..31cd5ec66d04 100644
--- a/pubsub/tests/unit/pubsub_v1/subscriber/test_consumer.py
+++ b/pubsub/tests/unit/pubsub_v1/subscriber/test_consumer.py
@@ -105,6 +105,38 @@ def test_exit_with_stop(self):
         assert items == []
 
 
+class _ResponseIterator(object):
+    def __init__(self, items, active=True):
+        self._items = iter(items)
+        self._active = active
+
+    def is_active(self):
+        return self._active
+
+    def __next__(self):
+        return next(self._items)
+
+    next = __next__
+
+
+def test__pausable_response_iterator_active_but_cant_consume():
+    # Note: we can't autospec threading.Event because it's goofy on Python 2.
+    can_consume = mock.Mock(spec=['wait'])
+    # First call will return false, indicating the loop should try again.
+    # second call will allow it to consume the first (and only) item.
+    can_consume.wait.side_effect = [False, True]
+    iterator = _ResponseIterator([1])
+
+    print(can_consume)
+
+    pausable_iter = _consumer._pausable_response_iterator(
+        iterator, can_consume)
+
+    items = list(pausable_iter)
+
+    assert items == [1]
+
+
 def test_send_request():
     consumer = _consumer.Consumer()
     request = types.StreamingPullRequest(subscription='foo')
@@ -176,9 +208,10 @@ class RaisingResponseGenerator(object):
     #       rather than the **class** will not be iterable in Python 2.
     #       This is problematic since a `Mock` just sets members.
 
-    def __init__(self, exception):
+    def __init__(self, exception, active=True):
         self.exception = exception
         self.next_calls = 0
+        self._active = active
 
     def __next__(self):
         self.next_calls += 1
@@ -187,6 +220,32 @@ def __next__(self):
     def next(self):
         return self.__next__()  # Python 2
 
+    def is_active(self):
+        return self._active
+
+
+def test_blocking_consume_iter_exception_while_paused():
+    policy = mock.create_autospec(base.BasePolicy, instance=True)
+    exc = TypeError('Bad things!')
+    policy.call_rpc.return_value = RaisingResponseGenerator(
+        exc, active=False)
+
+    consumer = _consumer.Consumer()
+    # Ensure the consume is paused.
+    consumer.pause()
+    consumer._consumer_thread = mock.Mock(spec=threading.Thread)
+    policy.on_exception.side_effect = OnException()
+
+    # Start the thread. It should not block forever but should notice the rpc
+    # is inactive and raise the exception from the stream and then exit
+    # because on_exception returns false.
+    consumer._blocking_consume(policy)
+    assert consumer._consumer_thread is None
+
+    # Check mocks.
+    policy.call_rpc.assert_called_once()
+    policy.on_exception.assert_called_once_with(exc)
+
 
 def test_blocking_consume_two_exceptions():
     policy = mock.create_autospec(base.BasePolicy, instance=True)