diff --git a/server/mqtt.go b/server/mqtt.go
index eb147b62..4d5f08b0 100644
--- a/server/mqtt.go
+++ b/server/mqtt.go
@@ -1883,12 +1883,21 @@ func (as *mqttAccountSessionManager) createOrRestoreSession(clientID string, opt
 		accName := jsa.c.acc.GetName()
 		return nil, false, fmt.Errorf("%s for account %q, session %q: %v", errTxt, accName, clientID, err)
 	}
+CREATE_STREAM:
 	// Send a request to create the stream for this session.
 	si, err := jsa.createStream(cfg)
-	// If there is an error and not simply "already used" (which means that the
-	// stream already exists) then we fail.
-	if isErrorOtherThan(err, ErrJetStreamStreamAlreadyUsed) {
-		return formatError("create session stream", err)
+	if err != nil {
+		// Check for insufficient resources. If that is the case, and if possible, try
+		// again with a lower replicas value.
+		if cfg.Replicas > 1 && err.Error() == jsInsufficientErr.Description {
+			cfg.Replicas--
+			goto CREATE_STREAM
+		}
+		// If there is an error and not simply "already used" (which means that the
+		// stream already exists) then we fail.
+		if isErrorOtherThan(err, ErrJetStreamStreamAlreadyUsed) {
+			return formatError("create session stream", err)
+		}
 	}
 	if err != nil {
 		// Since we have returned if error is not "stream already exist", then
diff --git a/server/mqtt_test.go b/server/mqtt_test.go
index 18cd6872..1acc9027 100644
--- a/server/mqtt_test.go
+++ b/server/mqtt_test.go
@@ -683,21 +683,47 @@ func testMQTTWrite(c net.Conn, buf []byte) (int, error) {
 }
 
 func testMQTTConnect(t testing.TB, ci *mqttConnInfo, host string, port int) (net.Conn, *mqttReader) {
+	return testMQTTConnectRetry(t, ci, host, port, 0)
+}
+
+func testMQTTConnectRetry(t testing.TB, ci *mqttConnInfo, host string, port int, retryCount int) (net.Conn, *mqttReader) {
 	t.Helper()
 
+	retry := func(c net.Conn) bool {
+		if retryCount == 0 {
+			return false
+		}
+		if c != nil {
+			c.Close()
+		}
+		time.Sleep(time.Second)
+		retryCount--
+		return true
+	}
+
 	addr := fmt.Sprintf("%s:%d", host, port)
+RETRY:
 	c, err := net.Dial("tcp", addr)
 	if err != nil {
+		if retry(c) {
+			goto RETRY
+		}
 		t.Fatalf("Error creating mqtt connection: %v", err)
 	}
 
 	proto := mqttCreateConnectProto(ci)
 	if _, err := testMQTTWrite(c, proto); err != nil {
+		if retry(c) {
+			goto RETRY
+		}
 		t.Fatalf("Error writing connect: %v", err)
 	}
 
 	buf, err := testMQTTRead(c)
 	if err != nil {
+		if retry(c) {
+			goto RETRY
+		}
 		t.Fatalf("Error reading: %v", err)
 	}
 	br := &mqttReader{reader: c}
@@ -3003,6 +3029,33 @@ func TestMQTTClusterReplicasCount(t *testing.T) {
 	}
 }
 
+func TestMQTTClusterSessionReplicasAdjustment(t *testing.T) {
+	cl := createJetStreamClusterWithTemplate(t, testMQTTGetClusterTemplaceNoLeaf(), "MQTT", 3)
+	defer cl.shutdown()
+	o := cl.opts[0]
+
+	mc, rc := testMQTTConnect(t, &mqttConnInfo{cleanSess: true}, o.MQTT.Host, o.MQTT.Port)
+	defer mc.Close()
+	testMQTTCheckConnAck(t, rc, mqttConnAckRCConnectionAccepted, false)
+	mc.Close()
+
+	// Shutdown one of the server.
+	cl.servers[1].Shutdown()
+
+	// Make sure there is a meta leader
+	cl.waitOnPeerCount(2)
+	cl.waitOnLeader()
+
+	// Now try to create a new session. With R(3) this would fail, but now server will
+	// adjust it down to R(2).
+	o = cl.opts[2]
+	// We may still get failures because of some JS APIs may timeout while things
+	// settle, so try again for a certain amount of times.
+	mc, rc = testMQTTConnectRetry(t, &mqttConnInfo{cleanSess: true}, o.MQTT.Host, o.MQTT.Port, 5)
+	defer mc.Close()
+	testMQTTCheckConnAck(t, rc, mqttConnAckRCConnectionAccepted, false)
+}
+
 func TestMQTTClusterPlacement(t *testing.T) {
 	sc := createJetStreamSuperCluster(t, 3, 2)
 	defer sc.shutdown()