diff --git a/RELEASENOTES.md b/RELEASENOTES.md
index fd02527b4d..2237810a19 100644
--- a/RELEASENOTES.md
+++ b/RELEASENOTES.md
@@ -41,6 +41,9 @@
     *   Request smaller decoder input buffers for Dolby Vision. This fixes an
         issue that could cause UHD Dolby Vision playbacks to fail on some
         devices, including Amazon Fire TV 4K.
+*   DRM:
+    *   Fix `DefaultDrmSessionManager` to correctly eagerly release preacquired
+        DRM sessions when there's a shortage of DRM resources on the device.
 *   UI
     *   `SubtitleView` no longer implements `TextOutput`. `SubtitleView`
         implements `Player.Listener`, so can be registered to a player with
diff --git a/library/core/src/main/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManager.java b/library/core/src/main/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManager.java
index ad5ba1427b..cd40555205 100644
--- a/library/core/src/main/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManager.java
+++ b/library/core/src/main/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManager.java
@@ -684,13 +684,7 @@ public class DefaultDrmSessionManager implements DrmSessionManager {
     // If we're short on DRM session resources, first try eagerly releasing all our keepalive
     // sessions and then retry the acquisition.
     if (acquisitionFailedIndicatingResourceShortage(session) && !keepaliveSessions.isEmpty()) {
-      // Make a local copy, because sessions are removed from this.keepaliveSessions during
-      // release (via callback).
-      ImmutableSet<DefaultDrmSession> keepaliveSessions =
-          ImmutableSet.copyOf(this.keepaliveSessions);
-      for (DrmSession keepaliveSession : keepaliveSessions) {
-        keepaliveSession.release(/* eventDispatcher= */ null);
-      }
+      releaseAllKeepaliveSessions();
       undoAcquisition(session, eventDispatcher);
       session = createAndAcquireSession(schemeDatas, isPlaceholderSession, eventDispatcher);
     }
@@ -702,6 +696,11 @@ public class DefaultDrmSessionManager implements DrmSessionManager {
         && shouldReleasePreacquiredSessionsBeforeRetrying
         && !preacquiredSessionReferences.isEmpty()) {
       releaseAllPreacquiredSessions();
+      if (!keepaliveSessions.isEmpty()) {
+        // Some preacquired sessions released above are now in their keepalive timeout phase. We
+        // release the keepalive references immediately.
+        releaseAllKeepaliveSessions();
+      }
       undoAcquisition(session, eventDispatcher);
       session = createAndAcquireSession(schemeDatas, isPlaceholderSession, eventDispatcher);
     }
@@ -728,6 +727,15 @@ public class DefaultDrmSessionManager implements DrmSessionManager {
     }
   }
 
+  private void releaseAllKeepaliveSessions() {
+    // Make a local copy, because sessions are removed from this.keepaliveSessions during
+    // release (via callback).
+    ImmutableSet<DefaultDrmSession> keepaliveSessions = ImmutableSet.copyOf(this.keepaliveSessions);
+    for (DrmSession keepaliveSession : keepaliveSessions) {
+      keepaliveSession.release(/* eventDispatcher= */ null);
+    }
+  }
+
   private void releaseAllPreacquiredSessions() {
     // Make a local copy, because sessions are removed from this.preacquiredSessionReferences
     // during release (via callback).
diff --git a/library/core/src/test/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManagerTest.java b/library/core/src/test/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManagerTest.java
index e5375012f7..ea8e91628b 100644
--- a/library/core/src/test/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManagerTest.java
+++ b/library/core/src/test/java/com/google/android/exoplayer2/drm/DefaultDrmSessionManagerTest.java
@@ -25,6 +25,7 @@ import androidx.annotation.Nullable;
 import androidx.test.ext.junit.runners.AndroidJUnit4;
 import com.google.android.exoplayer2.C;
 import com.google.android.exoplayer2.Format;
+import com.google.android.exoplayer2.drm.DrmSessionManager.DrmSessionReference;
 import com.google.android.exoplayer2.drm.ExoMediaDrm.AppManagedProvider;
 import com.google.android.exoplayer2.source.MediaSource;
 import com.google.android.exoplayer2.testutil.FakeExoMediaDrm;
@@ -302,6 +303,64 @@ public class DefaultDrmSessionManagerTest {
     assertThat(secondDrmSession.getState()).isEqualTo(DrmSession.STATE_OPENED_WITH_KEYS);
   }
 
+  @Test(timeout = 10_000)
+  public void maxConcurrentSessionsExceeded_allPreacquiredAndKeepaliveSessionsEagerlyReleased()
+      throws Exception {
+    ImmutableList<DrmInitData.SchemeData> secondSchemeDatas =
+        ImmutableList.of(DRM_SCHEME_DATAS.get(0).copyWithData(TestUtil.createByteArray(4, 5, 6)));
+    FakeExoMediaDrm.LicenseServer licenseServer =
+        FakeExoMediaDrm.LicenseServer.allowingSchemeDatas(DRM_SCHEME_DATAS, secondSchemeDatas);
+    Format secondFormatWithDrmInitData =
+        new Format.Builder().setDrmInitData(new DrmInitData(secondSchemeDatas)).build();
+    DrmSessionManager drmSessionManager =
+        new DefaultDrmSessionManager.Builder()
+            .setUuidAndExoMediaDrmProvider(
+                DRM_SCHEME_UUID,
+                uuid -> new FakeExoMediaDrm.Builder().setMaxConcurrentSessions(1).build())
+            .setSessionKeepaliveMs(10_000)
+            .setMultiSession(true)
+            .build(/* mediaDrmCallback= */ licenseServer);
+
+    drmSessionManager.prepare();
+    DrmSessionReference firstDrmSessionReference =
+        checkNotNull(
+            drmSessionManager.preacquireSession(
+                /* playbackLooper= */ checkNotNull(Looper.myLooper()),
+                /* eventDispatcher= */ null,
+                FORMAT_WITH_DRM_INIT_DATA));
+    DrmSession firstDrmSession =
+        checkNotNull(
+            drmSessionManager.acquireSession(
+                /* playbackLooper= */ checkNotNull(Looper.myLooper()),
+                /* eventDispatcher= */ null,
+                FORMAT_WITH_DRM_INIT_DATA));
+    waitForOpenedWithKeys(firstDrmSession);
+    firstDrmSession.release(/* eventDispatcher= */ null);
+
+    // The direct reference to firstDrmSession has been released, it's being kept alive by both
+    // firstDrmSessionReference and drmSessionManager's internal reference.
+    assertThat(firstDrmSession.getState()).isEqualTo(DrmSession.STATE_OPENED_WITH_KEYS);
+    DrmSession secondDrmSession =
+        checkNotNull(
+            drmSessionManager.acquireSession(
+                /* playbackLooper= */ checkNotNull(Looper.myLooper()),
+                /* eventDispatcher= */ null,
+                secondFormatWithDrmInitData));
+    // The drmSessionManager had to release both it's internal keep-alive reference and the
+    // reference represented by firstDrmSessionReference in order to acquire secondDrmSession.
+    assertThat(firstDrmSession.getState()).isEqualTo(DrmSession.STATE_RELEASED);
+
+    waitForOpenedWithKeys(secondDrmSession);
+    assertThat(secondDrmSession.getState()).isEqualTo(DrmSession.STATE_OPENED_WITH_KEYS);
+
+    // Not needed (because the manager has already released this reference) but we call it anyway
+    // for completeness.
+    firstDrmSessionReference.release();
+    // Clean-up
+    secondDrmSession.release(/* eventDispatcher= */ null);
+    drmSessionManager.release();
+  }
+
   @Test(timeout = 10_000)
   public void sessionReacquired_keepaliveTimeOutCancelled() throws Exception {
     FakeExoMediaDrm.LicenseServer licenseServer =
@@ -364,7 +423,7 @@ public class DefaultDrmSessionManagerTest {
 
     drmSessionManager.prepare();
 
-    DrmSessionManager.DrmSessionReference sessionReference =
+    DrmSessionReference sessionReference =
         drmSessionManager.preacquireSession(
             /* playbackLooper= */ checkNotNull(Looper.myLooper()),
             eventDispatcher,
@@ -413,7 +472,7 @@ public class DefaultDrmSessionManagerTest {
 
     drmSessionManager.prepare();
 
-    DrmSessionManager.DrmSessionReference sessionReference =
+    DrmSessionReference sessionReference =
         drmSessionManager.preacquireSession(
             /* playbackLooper= */ checkNotNull(Looper.myLooper()),
             /* eventDispatcher= */ null,
@@ -453,7 +512,7 @@ public class DefaultDrmSessionManagerTest {
 
     drmSessionManager.prepare();
 
-    DrmSessionManager.DrmSessionReference sessionReference =
+    DrmSessionReference sessionReference =
         drmSessionManager.preacquireSession(
             /* playbackLooper= */ checkNotNull(Looper.myLooper()),
             /* eventDispatcher= */ null,