diff --git a/bundle.go b/bundle.go
index 62478fa..b0dc434 100644
--- a/bundle.go
+++ b/bundle.go
@@ -148,7 +148,11 @@
 
 	log.Debugf("starting bundle download attempt for blobId=%s", r.blobId)
 
-	r.checkTimeout()
+	if r.checkTimeout() {
+		return &timeoutError{
+			markFailedAt: r.markFailedAt,
+		}
+	}
 
 	downloadedFile, err := downloadFromURI(r.blobServerURL, r.blobId, r.connTimeout)
 
@@ -173,13 +177,15 @@
 	return nil
 }
 
-func (r *DownloadRequest) checkTimeout() {
+func (r *DownloadRequest) checkTimeout() bool {
 
 	if !r.markFailedAt.IsZero() && time.Now().After(r.markFailedAt) {
 		r.markFailedAt = time.Time{}
 		log.Debugf("bundle download timeout. blobId=", r.blobId)
+		// TODO notify gateway of this failure
+		return true
 	}
-
+	return false
 }
 
 func getBlobFilePath(blobId string) string {
@@ -284,6 +290,10 @@
 			log.Debugf("starting download blobId=%s", req.blobId)
 			err := req.downloadBundle()
 			if err != nil {
+				// timeout
+				if _, ok := err.(*timeoutError); ok {
+					continue
+				}
 				go func() {
 					req.backoffFunc()
 					w.bm.enqueueRequest(req)
@@ -305,3 +315,11 @@
 		}
 	}
 }
+
+type timeoutError struct {
+	markFailedAt time.Time
+}
+
+func (e *timeoutError) Error() string {
+	return fmt.Sprintf("Timeout. markFailedAt=%v", e.markFailedAt)
+}
diff --git a/bundle_test.go b/bundle_test.go
index 2528d71..fa44b03 100644
--- a/bundle_test.go
+++ b/bundle_test.go
@@ -23,6 +23,7 @@
 	. "github.com/onsi/gomega"
 	"io"
 	"strings"
+	"sync/atomic"
 	"time"
 )
 
@@ -48,6 +49,9 @@
 			blobServer = &dummyBlobServer{
 				serverEndpoint: blobStoreUri,
 				signedEndpoint: dummySignedEndpoint,
+				signedTimeout:  new(int32),
+				blobTimeout:    new(int32),
+				resetTimeout:   true,
 			}
 			blobServer.start()
 		}
@@ -67,7 +71,7 @@
 			apiMan:                    dummyApiMan,
 			concurrentDownloads:       concurrentDownloads,
 			markDeploymentFailedAfter: 5 * time.Second,
-			bundleDownloadConnTimeout: 5 * time.Second,
+			bundleDownloadConnTimeout: time.Second,
 			bundleRetryDelay:          time.Second,
 			bundleCleanupDelay:        5 * time.Second,
 			downloadQueue:             make(chan *DownloadRequest, downloadQueueSize),
@@ -85,11 +89,46 @@
 	})
 
 	It("should download blob according to id", func() {
+		// download blob
 		id := GenerateUUID()
 		testBundleMan.enqueueRequest(testBundleMan.makeDownloadRequest(id))
 		received := <-dummyDbMan.fileResponse
 		Expect(received).Should(Equal(id))
 	})
+
+	It("should timeout connection and retry", func() {
+		// setup timeout
+		atomic.StoreInt32(blobServer.signedTimeout, 1)
+		atomic.StoreInt32(blobServer.blobTimeout, 1)
+		testBundleMan.bundleDownloadConnTimeout = 500 * time.Millisecond
+		testBundleMan.bundleRetryDelay = 50 * time.Millisecond
+
+		// download blobs
+		id := GenerateUUID()
+		testBundleMan.enqueueRequest(testBundleMan.makeDownloadRequest(id))
+		received := <-dummyDbMan.fileResponse
+		Expect(received).Should(Equal(id))
+
+	}, 4)
+
+	It("should mark as failure according to markDeploymentFailedAfter", func() {
+		// setup timeout
+		atomic.StoreInt32(blobServer.signedTimeout, 1)
+		atomic.StoreInt32(blobServer.blobTimeout, 1)
+		testBundleMan.bundleDownloadConnTimeout = 100 * time.Millisecond
+		testBundleMan.bundleRetryDelay = 100 * time.Millisecond
+		testBundleMan.markDeploymentFailedAfter = 200 * time.Millisecond
+
+		// download blobs
+		id := GenerateUUID()
+		req := testBundleMan.makeDownloadRequest(id)
+		Expect(req.markFailedAt.After(time.Now())).Should(BeTrue())
+		testBundleMan.enqueueRequest(req)
+
+		// should fail
+		time.Sleep(time.Second)
+		Expect(req.markFailedAt.IsZero()).Should(BeTrue())
+	}, 4)
 })
 
 type dummyApiManager struct {
@@ -101,6 +140,9 @@
 type dummyBlobServer struct {
 	serverEndpoint string
 	signedEndpoint string
+	signedTimeout  *int32
+	blobTimeout    *int32
+	resetTimeout   bool
 }
 
 func (b *dummyBlobServer) start() {
@@ -110,6 +152,13 @@
 
 // send a dummy uri as response
 func (b *dummyBlobServer) returnSigned(w http.ResponseWriter, r *http.Request) {
+	defer GinkgoRecover()
+	if atomic.LoadInt32(b.signedTimeout) == int32(1) {
+		if b.resetTimeout {
+			atomic.StoreInt32(b.signedTimeout, 0)
+		}
+		time.Sleep(time.Second)
+	}
 	vars := mux.Vars(r)
 	blobId := vars["blobId"]
 
@@ -122,6 +171,13 @@
 
 // send blobId back as response
 func (b *dummyBlobServer) returnBlob(w http.ResponseWriter, r *http.Request) {
+	defer GinkgoRecover()
+	if atomic.LoadInt32(b.blobTimeout) == int32(1) {
+		if b.resetTimeout {
+			atomic.StoreInt32(b.blobTimeout, 0)
+		}
+		time.Sleep(time.Second)
+	}
 	vars := mux.Vars(r)
 	blobId := vars["blobId"]
 	log.Debug("dummyBlobServer returnBlob id=" + blobId)