diff --git a/test/core/end2end/fixtures/http_proxy_fixture.cc b/test/core/end2end/fixtures/http_proxy_fixture.cc
index 31dfcd665e175..5c73ddb003355 100644
--- a/test/core/end2end/fixtures/http_proxy_fixture.cc
+++ b/test/core/end2end/fixtures/http_proxy_fixture.cc
@@ -68,15 +68,6 @@ struct grpc_end2end_http_proxy {
 // Connection handling
 //
 
-#define SERVER_EP_READ_FAIL 1
-#define SERVER_EP_WRITE_FAIL 2
-#define CLIENT_EP_READ_FAIL 4
-#define CLIENT_EP_WRITE_FAIL 8
-
-#define SERVER_EP_FAIL (SERVER_EP_READ_FAIL | SERVER_EP_WRITE_FAIL)
-#define CLIENT_EP_FAIL (CLIENT_EP_READ_FAIL | CLIENT_EP_WRITE_FAIL)
-#define EP_FAIL (SERVER_EP_FAIL | CLIENT_EP_FAIL)
-
 // proxy_connection structure is only accessed in the closures which are all
 // scheduled under the same combiner lock. So there is is no need for a mutex to
 // protect this structure.
@@ -88,13 +79,6 @@ typedef struct proxy_connection {
 
   gpr_refcount refcount;
 
-  // The lower four bits store the endpoint failure information
-  //   bit-0 Server endpoint read failure
-  //   bit-1 Server endpoint write failure
-  //   bit-2 Client endpoint read failure
-  //   bit-3 Client endpoint write failure
-  int ep_state;
-
   grpc_pollset_set* pollset_set;
 
   // NOTE: All the closures execute under proxy->combiner lock. Which means
@@ -107,6 +91,13 @@ typedef struct proxy_connection {
   grpc_closure on_server_read_done;
   grpc_closure on_server_write_done;
 
+  bool client_read_failed : 1;
+  bool client_write_failed : 1;
+  bool client_shutdown : 1;
+  bool server_read_failed : 1;
+  bool server_write_failed : 1;
+  bool server_shutdown : 1;
+
   grpc_slice_buffer client_read_buffer;
   grpc_slice_buffer client_deferred_write_buffer;
   bool client_is_writing;
@@ -150,36 +141,52 @@ static void proxy_connection_unref(grpc_exec_ctx* exec_ctx,
   }
 }
 
+enum failure_type {
+  SETUP_FAILED,  // To be used before we start proxying.
+  CLIENT_READ_FAILED,
+  CLIENT_WRITE_FAILED,
+  SERVER_READ_FAILED,
+  SERVER_WRITE_FAILED,
+};
+
 // Helper function to shut down the proxy connection.
-// Does NOT take ownership of a reference to error.
 static void proxy_connection_failed(grpc_exec_ctx* exec_ctx,
-                                    proxy_connection* conn, int failure_type,
-                                    const char* prefix, grpc_error* error) {
-  const char* msg = grpc_error_string(error);
-  gpr_log(GPR_INFO, "%s: %s", prefix, msg);
-  int ep_state = conn->ep_state;
-  int new_ep_state = ep_state | failure_type;
-  if (ep_state != new_ep_state) {
-    conn->ep_state = new_ep_state;
-    // Shutdown the endpoint (client and/or server) if both read and write
-    // failures are observed after setting the failure_type.
-    // To prevent calling endpoint shutdown multiple times, It is important to
-    // ensure that ep_state i.e the old state, did not already have both
-    // failures set.
-    if (((ep_state & SERVER_EP_FAIL) != SERVER_EP_FAIL) &&
-        ((new_ep_state & SERVER_EP_FAIL) == SERVER_EP_FAIL)) {
-      if (conn->server_endpoint != nullptr) {
-        grpc_endpoint_shutdown(exec_ctx, conn->server_endpoint,
-                               GRPC_ERROR_REF(error));
-      }
+                                    proxy_connection* conn,
+                                    failure_type failure, const char* prefix,
+                                    grpc_error* error) {
+  gpr_log(GPR_INFO, "%s: %s", prefix, grpc_error_string(error));
+  // Decide whether we should shut down the client and server.
+  bool shutdown_client = false;
+  bool shutdown_server = false;
+  if (failure == SETUP_FAILED) {
+    shutdown_client = true;
+    shutdown_server = true;
+  } else {
+    if ((failure == CLIENT_READ_FAILED && conn->client_write_failed) ||
+        (failure == CLIENT_WRITE_FAILED && conn->client_read_failed) ||
+        (failure == SERVER_READ_FAILED && !conn->client_is_writing)) {
+      shutdown_client = true;
     }
-    if (((ep_state & CLIENT_EP_FAIL) != CLIENT_EP_FAIL) &&
-        ((new_ep_state & CLIENT_EP_FAIL) == CLIENT_EP_FAIL)) {
-      grpc_endpoint_shutdown(exec_ctx, conn->client_endpoint,
-                             GRPC_ERROR_REF(error));
+    if ((failure == SERVER_READ_FAILED && conn->server_write_failed) ||
+        (failure == SERVER_WRITE_FAILED && conn->server_read_failed) ||
+        (failure == CLIENT_READ_FAILED && !conn->server_is_writing)) {
+      shutdown_server = true;
     }
   }
+  // If we decided to shut down either one and have not yet done so, do so.
+  if (shutdown_client && !conn->client_shutdown) {
+    grpc_endpoint_shutdown(exec_ctx, conn->client_endpoint,
+                           GRPC_ERROR_REF(error));
+    conn->client_shutdown = true;
+  }
+  if (shutdown_server && !conn->server_shutdown) {
+    grpc_endpoint_shutdown(exec_ctx, conn->server_endpoint,
+                           GRPC_ERROR_REF(error));
+    conn->server_shutdown = true;
+  }
+  // Unref the connection.
   proxy_connection_unref(exec_ctx, conn, "conn_failed");
+  GRPC_ERROR_UNREF(error);
 }
 
 // Callback for writing proxy data to the client.
@@ -188,8 +195,8 @@ static void on_client_write_done(grpc_exec_ctx* exec_ctx, void* arg,
   proxy_connection* conn = (proxy_connection*)arg;
   conn->client_is_writing = false;
   if (error != GRPC_ERROR_NONE) {
-    proxy_connection_failed(exec_ctx, conn, CLIENT_EP_WRITE_FAIL,
-                            "HTTP proxy client write", error);
+    proxy_connection_failed(exec_ctx, conn, CLIENT_WRITE_FAILED,
+                            "HTTP proxy client write", GRPC_ERROR_REF(error));
     return;
   }
   // Clear write buffer (the data we just wrote).
@@ -215,8 +222,8 @@ static void on_server_write_done(grpc_exec_ctx* exec_ctx, void* arg,
   proxy_connection* conn = (proxy_connection*)arg;
   conn->server_is_writing = false;
   if (error != GRPC_ERROR_NONE) {
-    proxy_connection_failed(exec_ctx, conn, SERVER_EP_WRITE_FAIL,
-                            "HTTP proxy server write", error);
+    proxy_connection_failed(exec_ctx, conn, SERVER_WRITE_FAILED,
+                            "HTTP proxy server write", GRPC_ERROR_REF(error));
     return;
   }
   // Clear write buffer (the data we just wrote).
@@ -244,11 +251,8 @@ static void on_client_read_done(grpc_exec_ctx* exec_ctx, void* arg,
   if (error != GRPC_ERROR_NONE) {
     // Report a read failure on the client endpoint. If there is no pending
     // server write, then shutdown the server endpoint as well.
-    proxy_connection_failed(
-        exec_ctx, conn,
-        (conn->server_is_writing ? CLIENT_EP_READ_FAIL
-                                 : (CLIENT_EP_READ_FAIL | SERVER_EP_FAIL)),
-        "HTTP proxy client read", error);
+    proxy_connection_failed(exec_ctx, conn, CLIENT_READ_FAILED,
+                            "HTTP proxy client read", GRPC_ERROR_REF(error));
     return;
   }
   // If there is already a pending write (i.e., server_write_buffer is
@@ -282,11 +286,8 @@ static void on_server_read_done(grpc_exec_ctx* exec_ctx, void* arg,
   if (error != GRPC_ERROR_NONE) {
     // Report a read failure on the server end point. If there is no pending
     // write to the client, then shutdown the client endpoint as well.
-    proxy_connection_failed(
-        exec_ctx, conn,
-        (conn->client_is_writing ? SERVER_EP_READ_FAIL
-                                 : (SERVER_EP_READ_FAIL | CLIENT_EP_FAIL)),
-        "HTTP proxy server read", error);
+    proxy_connection_failed(exec_ctx, conn, SERVER_READ_FAILED,
+                            "HTTP proxy server read", GRPC_ERROR_REF(error));
     return;
   }
   // If there is already a pending write (i.e., client_write_buffer is
@@ -318,8 +319,8 @@ static void on_write_response_done(grpc_exec_ctx* exec_ctx, void* arg,
   proxy_connection* conn = (proxy_connection*)arg;
   conn->client_is_writing = false;
   if (error != GRPC_ERROR_NONE) {
-    proxy_connection_failed(exec_ctx, conn, EP_FAIL,
-                            "HTTP proxy write response", error);
+    proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                            "HTTP proxy write response", GRPC_ERROR_REF(error));
     return;
   }
   // Clear write buffer.
@@ -347,8 +348,8 @@ static void on_server_connect_done(grpc_exec_ctx* exec_ctx, void* arg,
     // connection failed.  However, for the purposes of this test code,
     // it's fine to pretend this is a client-side error, which will
     // cause the client connection to be dropped.
-    proxy_connection_failed(exec_ctx, conn, EP_FAIL,
-                            "HTTP proxy server connect", error);
+    proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                            "HTTP proxy server connect", GRPC_ERROR_REF(error));
     return;
   }
   // We've established a connection, so send back a 200 response code to
@@ -397,8 +398,8 @@ static void on_read_request_done(grpc_exec_ctx* exec_ctx, void* arg,
   gpr_log(GPR_DEBUG, "on_read_request_done: %p %s", conn,
           grpc_error_string(error));
   if (error != GRPC_ERROR_NONE) {
-    proxy_connection_failed(exec_ctx, conn, EP_FAIL, "HTTP proxy read request",
-                            error);
+    proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                            "HTTP proxy read request", GRPC_ERROR_REF(error));
     return;
   }
   // Read request and feed it to the parser.
@@ -407,8 +408,9 @@ static void on_read_request_done(grpc_exec_ctx* exec_ctx, void* arg,
       error = grpc_http_parser_parse(
           &conn->http_parser, conn->client_read_buffer.slices[i], nullptr);
       if (error != GRPC_ERROR_NONE) {
-        proxy_connection_failed(exec_ctx, conn, EP_FAIL,
-                                "HTTP proxy request parse", error);
+        proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                                "HTTP proxy request parse",
+                                GRPC_ERROR_REF(error));
         GRPC_ERROR_UNREF(error);
         return;
       }
@@ -428,8 +430,8 @@ static void on_read_request_done(grpc_exec_ctx* exec_ctx, void* arg,
                  conn->http_request.method);
     error = GRPC_ERROR_CREATE_FROM_COPIED_STRING(msg);
     gpr_free(msg);
-    proxy_connection_failed(exec_ctx, conn, EP_FAIL, "HTTP proxy read request",
-                            error);
+    proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                            "HTTP proxy read request", GRPC_ERROR_REF(error));
     GRPC_ERROR_UNREF(error);
     return;
   }
@@ -449,8 +451,8 @@ static void on_read_request_done(grpc_exec_ctx* exec_ctx, void* arg,
     if (!client_authenticated) {
       const char* msg = "HTTP Connect could not verify authentication";
       error = GRPC_ERROR_CREATE_FROM_STATIC_STRING(msg);
-      proxy_connection_failed(exec_ctx, conn, EP_FAIL,
-                              "HTTP proxy read request", error);
+      proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                              "HTTP proxy read request", GRPC_ERROR_REF(error));
       GRPC_ERROR_UNREF(error);
       return;
     }
@@ -460,8 +462,8 @@ static void on_read_request_done(grpc_exec_ctx* exec_ctx, void* arg,
   error = grpc_blocking_resolve_address(conn->http_request.path, "80",
                                         &resolved_addresses);
   if (error != GRPC_ERROR_NONE) {
-    proxy_connection_failed(exec_ctx, conn, EP_FAIL, "HTTP proxy DNS lookup",
-                            error);
+    proxy_connection_failed(exec_ctx, conn, SETUP_FAILED,
+                            "HTTP proxy DNS lookup", GRPC_ERROR_REF(error));
     GRPC_ERROR_UNREF(error);
     return;
   }