diff --git a/ethereum.go b/ethereum.go
index f43d37be21..18c1f8a232 100644
--- a/ethereum.go
+++ b/ethereum.go
@@ -160,7 +160,7 @@ func (s *Ethereum) IsUpToDate() bool {
 	upToDate := true
 	eachPeer(s.peers, func(peer *Peer, e *list.Element) {
 		if atomic.LoadInt32(&peer.connected) == 1 {
-			if peer.catchingUp == true {
+			if peer.catchingUp == true && peer.versionKnown {
 				upToDate = false
 			}
 		}
diff --git a/peer.go b/peer.go
index 1e354ca6d6..a900a31927 100644
--- a/peer.go
+++ b/peer.go
@@ -328,6 +328,7 @@ func (p *Peer) HandleInbound() {
 		for _, msg := range msgs {
 			peerlogger.DebugDetailf("(%v) => %v %v\n", p.conn.RemoteAddr(), msg.Type, msg.Data)
 
+		nextMsg:
 			switch msg.Type {
 			case ethwire.MsgHandshakeTy:
 				// Version message
@@ -373,6 +374,7 @@ func (p *Peer) HandleInbound() {
 								p.diverted = false
 								if !p.ethereum.StateManager().BlockChain().FindCanonicalChainFromMsg(msg, block.PrevHash) {
 									p.SyncWithPeerToLastKnown()
+									break nextMsg
 								}
 								break
 							}
@@ -385,10 +387,11 @@ func (p *Peer) HandleInbound() {
 						p.blocksRequested = p.blocksRequested * 2
 
 						peerlogger.Infof("No common ancestor found, requesting %d more blocks.\n", p.blocksRequested)
-						p.catchingUp = false
 						p.FindCommonParentBlock()
-						break
+						break nextMsg
 					}
+
+					p.catchingUp = false
 				}
 
 				for i := msg.Data.Len() - 1; i >= 0; i-- {