diff --git a/runtime/observatory/tests/service/resume_shutdown_race_test.dart b/runtime/observatory/tests/service/resume_shutdown_race_test.dart
new file mode 100644
index 00000000000..1732aa6625b
--- /dev/null
+++ b/runtime/observatory/tests/service/resume_shutdown_race_test.dart
@@ -0,0 +1,80 @@
+// Copyright (c) 2023, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+
+// VMOptions=--pause-isolate-on-exit --enable-vm-service=0 --disable-service-auth-codes
+
+// See b/271314180.
+
+import 'dart:async';
+import 'dart:convert';
+import 'dart:developer';
+import 'dart:io';
+import 'dart:isolate';
+
+final childCount = 4;
+
+child(i) {
+  print("Child $i");
+  // Paused-at-exit.
+}
+
+main() {
+  for (var i = 0; i < childCount; i++) {
+    Isolate.spawn(child, i);
+  }
+  Isolate.spawn(resumer, null);
+  print("Parent");
+  // Paused-at-exit.
+}
+
+get(String method, Map<String, dynamic> arguments) async {
+  var info = await Service.getInfo();
+  var uri = info.serverUri!.replace(path: method, queryParameters: arguments);
+  var client = new HttpClient();
+  try {
+    var request = await client.getUrl(uri);
+    var response = await request.close();
+    var string = await response.transform(utf8.decoder).join();
+    return jsonDecode(string);
+  } finally {
+    client.close();
+  }
+}
+
+resumer(_) async {
+  try {
+    // Wait for the main isolate and children to all be paused at exit.
+    var paused = <String>[];
+    do {
+      paused.clear();
+      var vm = (await get("getVM", {}))["result"];
+      for (var isolate in vm["isolates"]) {
+        var id = isolate["id"];
+        isolate = (await get("getIsolate", {"isolateId": id}))["result"];
+        if ((isolate["pauseEvent"] != null) &&
+            (isolate["pauseEvent"]["kind"] == "PauseExit")) {
+          paused.add(id);
+        }
+      }
+    } while (paused.length != childCount + 1);
+
+    // Resume the main isolate and children. When the main isolate resumes, it
+    // will exit and trigger VM shutdown. The VM shutdown will send the OOB kill
+    // message to children and so race with the resume message. No matter how
+    // the race resolves, the children should exit and the VM shutdown should
+    // not hang with
+    //    Attempt:138 waiting for isolate child to check in
+    //    ...
+    for (var id in paused) {
+      get("resume", {"isolateId": id}).then((v) => print(v));
+    }
+  } catch (e, st) {
+    print(e);
+    print(st);
+    rethrow;
+  }
+
+  // This isolate itself will be paused-at-exit with no resume message coming,
+  // but should exit because of the VM shutdown.
+}
diff --git a/runtime/vm/message_handler.cc b/runtime/vm/message_handler.cc
index 55f0cf4240b..3194de15b82 100644
--- a/runtime/vm/message_handler.cc
+++ b/runtime/vm/message_handler.cc
@@ -424,7 +424,9 @@ void MessageHandler::TaskCallback() {
         return;
       } else {
         PausedOnExitLocked(&ml, false);
-        status = remembered_paused_on_exit_status_;
+        if (status != kShutdown) {
+          status = remembered_paused_on_exit_status_;
+        }
       }
     }
 #endif  // !defined(PRODUCT)