diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7a1aeef8f7e..382bf3983fa 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -39,6 +39,7 @@
 * [BUGFIX] Compactor: Add back deletion of partition group info file even if not complete #7157
 * [BUGFIX] Query Frontend: Add Native Histogram extraction logic in results cache #7167
 * [BUGFIX] Alertmanager: Fix alertmanager reloading bug that removes user template files #7196
+* [BUGFIX] Query Scheduler: If max_outstanding_requests_per_tenant value is updated to lesser value than the current number of requests in the queue, the excess requests (newest ones) will be dropped to prevent deadlocks. #7188
 
 ## 1.20.1 2025-12-03
 
diff --git a/pkg/scheduler/queue/queue_test.go b/pkg/scheduler/queue/queue_test.go
index 464c0e3e238..de98453978f 100644
--- a/pkg/scheduler/queue/queue_test.go
+++ b/pkg/scheduler/queue/queue_test.go
@@ -283,6 +283,60 @@ func TestQueriersShouldGetHighPriorityQueryFirst(t *testing.T) {
 	assert.Equal(t, highPriorityRequest, nextRequest) // high priority request returned, although it was enqueued the last
 }
 
+func TestGetOrAddQueue_ShouldNotDeadlockWhenLimitsAreReduced(t *testing.T) {
+	// Setup: Large initial limit
+	initialLimit := 100
+	newLimit := 50
+
+	limits := MockLimits{
+		MaxOutstanding: initialLimit,
+	}
+
+	// Initialize queues
+	q := newUserQueues(0, limits, nil)
+
+	// Create user queue
+	userID := "test-user-deadlock"
+	queue := q.getOrAddQueue(userID, 1)
+
+	// Fill queue to capacity (near initialLimit)
+	// We fill it more than newLimit
+	itemsToFill := 80
+	for range itemsToFill {
+		queue.enqueueRequest(MockRequest{priority: 1})
+	}
+
+	require.Equal(t, itemsToFill, queue.length())
+
+	// Reduce limit below current size
+	// We change the mock limits return value.
+	// In real app this comes from runtime config reload.
+	limits.MaxOutstanding = newLimit
+	q.limits = limits // Update strict reference in queues struct (mocking the reload effect)
+
+	// Now call getOrAddQueue again.
+	// This triggers the migration logic: existing queue (80 items) -> new queue (cap 50).
+	done := make(chan struct{})
+	go func() {
+		_ = q.getOrAddQueue(userID, 1)
+		close(done)
+	}()
+
+	select {
+	case <-done:
+		// Success: no deadlock
+	case <-time.After(2 * time.Second):
+		t.Fatal("Deadlock detected! getOrAddQueue timed out while migrating queue with reduced limits.")
+	}
+
+	// The new queue should be capped at newLimit or contain what managed to fit.
+	// Logic: it breaks when full. So new queue should be full (length == newLimit).
+	newQueue := q.getOrAddQueue(userID, 1) // Should be fast now
+
+	// Note: The actual items in queue should be newLimit (50). The rest (30) are dropped.
+	assert.Equal(t, newLimit, newQueue.length())
+}
+
 func TestReservedQueriersShouldOnlyGetHighPriorityQueries(t *testing.T) {
 	queue := NewRequestQueue(0,
 		prometheus.NewGaugeVec(prometheus.GaugeOpts{}, []string{"user", "priority", "type"}),
diff --git a/pkg/scheduler/queue/user_queues.go b/pkg/scheduler/queue/user_queues.go
index c7e30d87375..b96f5ab4876 100644
--- a/pkg/scheduler/queue/user_queues.go
+++ b/pkg/scheduler/queue/user_queues.go
@@ -169,7 +169,9 @@ func (q *queues) getOrAddQueue(userID string, maxQueriers int) userRequestQueue
 		tmpQueue := q.createUserRequestQueue(userID)
 
 		// flush to new queue
-		for uq.queue.length() > 0 {
+		// If the new limit is lower than the current number of requests,
+		// the excess requests (newest ones) will be dropped to prevent deadlocks.
+		for (uq.queue.length() > 0) && (tmpQueue.length() < maxOutstanding) {
 			tmpQueue.enqueueRequest(uq.queue.dequeueRequest(0, false))
 		}