diff --git a/server/jetstream_cluster_3_test.go b/server/jetstream_cluster_3_test.go
index aaf395a4..74840f2d 100644
--- a/server/jetstream_cluster_3_test.go
+++ b/server/jetstream_cluster_3_test.go
@@ -3999,10 +3999,7 @@ func TestJetStreamClusterLeafnodePlusDaisyChainSetup(t *testing.T) {
 		server_name: %s
 		jetstream: {max_mem_store: 256MB, max_file_store: 2GB, domain: CLOUD, store_dir: '%s'}
 
-		leaf {
-			listen: 127.0.0.1:-1
-			compression: off
-		}
+		leaf { listen: 127.0.0.1:-1 }
 
 		cluster {
 			name: %s
@@ -4059,7 +4056,7 @@ func TestJetStreamClusterLeafnodePlusDaisyChainSetup(t *testing.T) {
 	var leafFrag = `
 			leaf {
 				listen: 127.0.0.1:-1
-				remotes [ { urls: [ %s ], account: "T", compression:off }, { urls: [ %s ], account: "F", compression: off } ]
+				remotes [ { urls: [ %s ], account: "T" }, { urls: [ %s ], account: "F" } ]
 			}`
 
 	genLeafTmpl := func(tmpl string, c *cluster) string {
diff --git a/server/leafnode.go b/server/leafnode.go
index 5a60c433..35cb186a 100644
--- a/server/leafnode.go
+++ b/server/leafnode.go
@@ -696,6 +696,8 @@ func (s *Server) startLeafNodeAcceptLoop() {
 
 	tlsRequired := opts.LeafNode.TLSConfig != nil
 	tlsVerify := tlsRequired && opts.LeafNode.TLSConfig.ClientAuth == tls.RequireAndVerifyClientCert
+	// Do not set compression in this Info object, it would possibly cause
+	// issues when sending asynchronous INFO to the remote.
 	info := Info{
 		ID:            s.info.ID,
 		Name:          s.info.Name,
@@ -712,11 +714,6 @@ func (s *Server) startLeafNodeAcceptLoop() {
 		Proto:         1, // Fixed for now.
 		InfoOnConnect: true,
 	}
-	// For tests that want to simulate old servers, do not set the compression
-	// on the INFO protocol if configured with CompressionNotSupported.
-	if cm := opts.LeafNode.Compression.Mode; cm != CompressionNotSupported {
-		info.Compression = cm
-	}
 	// If we have selected a random port...
 	if port == 0 {
 		// Write resolved port back to options.
@@ -987,7 +984,11 @@ func (s *Server) createLeafNode(conn net.Conn, rURL *url.URL, remote *leafNodeCf
 		// Grab server variables
 		s.mu.Lock()
 		info = s.copyLeafNodeInfo()
-		info.Compression = opts.LeafNode.Compression.Mode
+		// For tests that want to simulate old servers, do not set the compression
+		// on the INFO protocol if configured with CompressionNotSupported.
+		if cm := opts.LeafNode.Compression.Mode; cm != CompressionNotSupported {
+			info.Compression = cm
+		}
 		s.generateNonce(nonce[:])
 		s.mu.Unlock()
 	}
@@ -1201,14 +1202,21 @@ func (c *client) processLeafnodeInfo(info *Info) {
 				c.leaf.compression = CompressionOff
 			}
 		}
+		// Accepting side does not normally process an INFO protocol during
+		// initial connection handshake. So we keep it consistent by returning
+		// if we are not soliciting.
+		if !didSolicit {
+			// If we had created the ping timer instead of the auth timer, we will
+			// clear the ping timer and set the auth timer now that the compression
+			// negotiation is done.
+			if info.Compression != _EMPTY_ && c.ping.tmr != nil {
+				clearTimer(&c.ping.tmr)
+				c.setAuthTimer(secondsToDuration(opts.LeafNode.AuthTimeout))
+			}
+			c.mu.Unlock()
+			return
+		}
 		// Fall through and process the INFO protocol as usual.
-	} else if firstINFO && !didSolicit && needsCompression(opts.LeafNode.Compression.Mode) {
-		// We used the ping timer instead of auth timer when accepting a remote
-		// connection so that we can exchange INFO protocols and not have the
-		// parser return a protocol violation. Now that the negotiation is over
-		// stop the ping timer and set the auth timer.
-		clearTimer(&c.ping.tmr)
-		c.setAuthTimer(secondsToDuration(opts.LeafNode.AuthTimeout))
 	}
 
 	// Note: For now, only the initial INFO has a nonce. We
@@ -2859,9 +2867,6 @@ func (s *Server) leafNodeResumeConnectProcess(c *client) {
 	// Spin up the write loop.
 	s.startGoRoutine(func() { c.writeLoop() })
 
-	// In case there was compression negotiation, the timer could have been
-	// already created. Destroy and recreate with different callback.
-	clearTimer(&c.ping.tmr)
 	// timeout leafNodeFinishConnectProcess
 	c.ping.tmr = time.AfterFunc(connectProcessTimeout, func() {
 		c.mu.Lock()
diff --git a/server/leafnode_test.go b/server/leafnode_test.go
index e1da45fe..24977604 100644
--- a/server/leafnode_test.go
+++ b/server/leafnode_test.go
@@ -5880,3 +5880,72 @@ func TestLeafNodeCompressionWithWSGetNeedsData(t *testing.T) {
 	require_True(t, len(msg.Data) == 156)
 	require_Equal(t, string(msg.Data), payload)
 }
+
+func TestLeafNodeCompressionAuthTimeout(t *testing.T) {
+	hconf := createConfFile(t, []byte(`
+		port: -1
+		server_name: "hub"
+		leafnodes {
+			port: -1
+			authorization {
+				timeout: 0.75
+			}
+		}
+	`))
+	sh, oh := RunServerWithConfig(hconf)
+	defer sh.Shutdown()
+
+	sconfTmpl := `
+		port: -1
+		server_name: "%s"
+		cluster {
+			port: -1
+			name: "spoke"
+			%s
+		}
+		leafnodes {
+			port: -1
+			remotes [
+				{ url: "nats://127.0.0.1:%d" }
+			]
+		}
+	`
+	s1conf := createConfFile(t, []byte(fmt.Sprintf(sconfTmpl, "SP1", _EMPTY_, oh.LeafNode.Port)))
+	s1, o1 := RunServerWithConfig(s1conf)
+	defer s1.Shutdown()
+
+	s2conf := createConfFile(t, []byte(fmt.Sprintf(sconfTmpl, "SP2", fmt.Sprintf("routes: [\"nats://127.0.0.1:%d\"]", o1.Cluster.Port), oh.LeafNode.Port)))
+	s2, _ := RunServerWithConfig(s2conf)
+	defer s2.Shutdown()
+
+	checkClusterFormed(t, s1, s2)
+
+	checkLeafNodeConnected(t, s1)
+	checkLeafNodeConnected(t, s2)
+
+	getCID := func(s *Server) uint64 {
+		s.mu.RLock()
+		defer s.mu.RUnlock()
+		var cid uint64
+		for _, l := range s.leafs {
+			l.mu.Lock()
+			cid = l.cid
+			l.mu.Unlock()
+		}
+		return cid
+	}
+	leaf1 := getCID(s1)
+	leaf2 := getCID(s2)
+
+	// Wait for more than auth timeout
+	time.Sleep(time.Second)
+
+	checkLeafNodeConnected(t, s1)
+	checkLeafNodeConnected(t, s2)
+	if l1 := getCID(s1); l1 != leaf1 {
+		t.Fatalf("Leaf connection first connection had CID %v, now %v", leaf1, l1)
+	}
+	if l2 := getCID(s2); l2 != leaf2 {
+		t.Fatalf("Leaf connection first connection had CID %v, now %v", leaf2, l2)
+	}
+}