diff --git a/include/libtorrent/aux_/session_impl.hpp b/include/libtorrent/aux_/session_impl.hpp
index 060f41a75..9c5df4f7c 100644
--- a/include/libtorrent/aux_/session_impl.hpp
+++ b/include/libtorrent/aux_/session_impl.hpp
@@ -636,6 +636,7 @@ namespace libtorrent
 			void update_listen_interfaces();
 			void update_privileged_ports();
 			void update_auto_sequential();
+			void update_max_failcount();
 
 			void update_upnp();
 			void update_natpmp();
diff --git a/include/libtorrent/peer_list.hpp b/include/libtorrent/peer_list.hpp
index ffb1d01a8..5b5eaf82b 100644
--- a/include/libtorrent/peer_list.hpp
+++ b/include/libtorrent/peer_list.hpp
@@ -67,6 +67,7 @@ namespace libtorrent
 			, min_reconnect_time(60)
 			, loop_counter(0)
 			, ip(NULL), port(0)
+			, max_failcount(3)
 			, peer_allocator(NULL)
 		{}
 		bool is_paused;
@@ -90,6 +91,10 @@ namespace libtorrent
 		external_ip const* ip;
 		int port;
 
+		// the number of times a peer must fail before it's no longer considered
+		// a connect candidate
+		int max_failcount;
+
 		// this must be set to a torrent_peer allocator
 		torrent_peer_allocator_interface* peer_allocator;
 
@@ -193,6 +198,8 @@ namespace libtorrent
 		void erase_peer(torrent_peer* p, torrent_state* state);
 		void erase_peer(iterator i, torrent_state* state);
 
+		void set_max_failcount(torrent_state* st);
+
 	private:
 
 		void recalculate_connect_candidates(torrent_state* state);
@@ -207,7 +214,8 @@ namespace libtorrent
 		bool compare_peer(torrent_peer const* lhs, torrent_peer const* rhs
 			, external_ip const& external, int source_port) const;
 
-		void find_connect_candidates(std::vector<torrent_peer*>& peers, int session_time, torrent_state* state);
+		void find_connect_candidates(std::vector<torrent_peer*>& peers
+			, int session_time, torrent_state* state);
 
 		bool is_connect_candidate(torrent_peer const& p) const;
 		bool is_erase_candidate(torrent_peer const& p) const;
@@ -255,6 +263,9 @@ namespace libtorrent
 		// port for them).
 		int m_num_connect_candidates;
 
+		// if a peer has failed this many times or more, we don't consider
+		// it a connect candidate anymore.
+		int m_max_failcount;
 	};
 
 }
diff --git a/include/libtorrent/torrent.hpp b/include/libtorrent/torrent.hpp
index 7dbaedd52..acf6cac23 100644
--- a/include/libtorrent/torrent.hpp
+++ b/include/libtorrent/torrent.hpp
@@ -977,6 +977,12 @@ namespace libtorrent
 			return m_picker.get() != 0;
 		}
 
+		void update_max_failcount()
+		{
+			if (!m_peer_list) return;
+			torrent_state st = get_policy_state();
+			m_peer_list->set_max_failcount(&st);
+		}
 		int num_known_peers() const { return m_peer_list ? m_peer_list->num_peers() : 0; }
 		int num_connect_candidates() const { return m_peer_list ? m_peer_list->num_connect_candidates() : 0; }
 
diff --git a/src/peer_list.cpp b/src/peer_list.cpp
index f0bd25e91..410415eec 100644
--- a/src/peer_list.cpp
+++ b/src/peer_list.cpp
@@ -129,15 +129,25 @@ namespace libtorrent
 		, m_finished(0)
 		, m_round_robin(0)
 		, m_num_connect_candidates(0)
+		, m_max_failcount(3)
 	{
 		thread_started();
 	}
 
-	// disconnects and removes all peers that are now filtered
-	// fills in 'erased' with torrent_peer pointers that were removed
-	// from the peer list. Any references to these peers must be cleared
-	// immediately after this call returns. For instance, in the piece picker.
-	void peer_list::apply_ip_filter(ip_filter const& filter, torrent_state* state, std::vector<address>& banned)
+	void peer_list::set_max_failcount(torrent_state* state)
+	{
+		if (state->max_failcount == m_max_failcount) return;
+
+		m_max_failcount = state->max_failcount;
+		recalculate_connect_candidates(state);
+	}
+
+	// disconnects and removes all peers that are now filtered fills in 'erased'
+	// with torrent_peer pointers that were removed from the peer list. Any
+	// references to these peers must be cleared immediately after this call
+	// returns. For instance, in the piece picker.
+	void peer_list::apply_ip_filter(ip_filter const& filter
+		, torrent_state* state, std::vector<address>& banned)
 	{
 		TORRENT_ASSERT(is_single_thread());
 		INVARIANT_CHECK;
@@ -169,7 +179,9 @@ namespace libtorrent
 				
 				banned.push_back(p->remote().address());
 
-				p->disconnect(errors::banned_by_ip_filter, peer_connection_interface::op_bittorrent);
+				p->disconnect(errors::banned_by_ip_filter
+					, peer_connection_interface::op_bittorrent);
+
 				// what *i refers to has changed, i.e. cur was deleted
 				if (m_peers.size() < count)
 				{
@@ -196,7 +208,8 @@ namespace libtorrent
 	// fills in 'erased' with torrent_peer pointers that were removed
 	// from the peer list. Any references to these peers must be cleared
 	// immediately after this call returns. For instance, in the piece picker.
-	void peer_list::apply_port_filter(port_filter const& filter, torrent_state* state, std::vector<address>& banned)
+	void peer_list::apply_port_filter(port_filter const& filter
+		, torrent_state* state, std::vector<address>& banned)
 	{
 		TORRENT_ASSERT(is_single_thread());
 		INVARIANT_CHECK;
@@ -457,14 +470,14 @@ namespace libtorrent
 			|| p.web_seed
 			|| !p.connectable
 			|| (p.seed && m_finished)
-			// TODO: 3 settings_pack::max_failcount should be used here, not 3
-			|| int(p.failcount) >= 3)
+			|| int(p.failcount) >= m_max_failcount)
 			return false;
 		
 		return true;
 	}
 
-	void peer_list::find_connect_candidates(std::vector<torrent_peer*>& peers, int session_time, torrent_state* state)
+	void peer_list::find_connect_candidates(std::vector<torrent_peer*>& peers
+		, int session_time, torrent_state* state)
 	{
 		TORRENT_ASSERT(is_single_thread());
 		INVARIANT_CHECK;
diff --git a/src/session_impl.cpp b/src/session_impl.cpp
index bfd4a6ab5..bbbb744b4 100644
--- a/src/session_impl.cpp
+++ b/src/session_impl.cpp
@@ -5012,6 +5012,15 @@ retry:
 			, end(m_torrents.end()); i != end; ++i)
 			i->second->update_auto_sequential();
 	}
+	
+	void session_impl::update_max_failcount()
+	{
+		for (torrent_map::iterator i = m_torrents.begin()
+			, end(m_torrents.end()); i != end; ++i)
+		{
+			i->second->update_max_failcount();
+		}
+	}
 
 	void session_impl::update_proxy()
 	{
diff --git a/src/settings_pack.cpp b/src/settings_pack.cpp
index 991cc53a9..058ccb538 100644
--- a/src/settings_pack.cpp
+++ b/src/settings_pack.cpp
@@ -229,7 +229,7 @@ namespace libtorrent
 		SET(urlseed_pipeline_size, 5, 0),
 		SET(urlseed_wait_retry, 30, 0),
 		SET(file_pool_size, 40, 0),
-		SET(max_failcount, 3, 0),
+		SET(max_failcount, 3, &session_impl::update_max_failcount),
 		SET(min_reconnect_time, 60, 0),
 		SET(peer_connect_timeout, 15, 0),
 		SET(connection_speed, 6, &session_impl::update_connection_speed),
diff --git a/src/torrent.cpp b/src/torrent.cpp
index efadc0c9d..46d8bbafc 100644
--- a/src/torrent.cpp
+++ b/src/torrent.cpp
@@ -10639,6 +10639,7 @@ namespace libtorrent
 		ret.peer_allocator = m_ses.get_peer_allocator();
 		ret.ip = &m_ses.external_address();
 		ret.port = m_ses.listen_port();
+		ret.max_failcount = settings().get_int(settings_pack::max_failcount);
 		return ret;
 	}