diff --git a/zebra-network/src/peer_set/set.rs b/zebra-network/src/peer_set/set.rs
index 0b614637e11..f7187b5a2ab 100644
--- a/zebra-network/src/peer_set/set.rs
+++ b/zebra-network/src/peer_set/set.rs
@@ -108,37 +108,80 @@ pub struct CancelClientWork;
 /// Otherwise, malicious peers could interfere with other peers' `PeerSet` state.
 pub struct PeerSet<D>
 where
-    D: Discover<Key = SocketAddr>,
+    D: Discover<Key = SocketAddr> + Unpin,
+    D::Service: Service<Request, Response = Response> + Load,
+    D::Error: Into<BoxError>,
+    <D::Service as Service<Request>>::Error: Into<BoxError> + 'static,
+    <D::Service as Service<Request>>::Future: Send + 'static,
+    <D::Service as Load>::Metric: Debug,
 {
+    /// Provides new and deleted peer [`Change`]s to the peer set,
+    /// via the [`Discover`] trait implementation.
     discover: D,
+
+    /// Connected peers that are ready to receive requests from Zebra,
+    /// or send requests to Zebra.
+    ready_services: IndexMap<D::Key, D::Service>,
+
     /// A preselected index for a ready service.
     /// INVARIANT: If this is `Some(i)`, `i` must be a valid index for `ready_services`.
     /// This means that every change to `ready_services` must invalidate or correct it.
     preselected_p2c_index: Option<usize>,
-    ready_services: IndexMap<D::Key, D::Service>,
-    cancel_handles: HashMap<D::Key, oneshot::Sender<CancelClientWork>>,
+
+    /// Stores gossiped inventory from connected peers.
+    /// Used to route inventory requests to peers that are likely to have it.
+    inventory_registry: InventoryRegistry,
+
+    /// Connected peers that are handling a Zebra request,
+    /// or Zebra is handling one of their requests.
     unready_services: FuturesUnordered<UnreadyService<D::Key, D::Service, Request>>,
+
+    /// Channels used to cancel the request that an unready service is doing.
+    cancel_handles: HashMap<D::Key, oneshot::Sender<CancelClientWork>>,
+
+    /// A channel that asks the peer crawler task to connect to more peers.
     demand_signal: mpsc::Sender<MorePeers>,
+
     /// Channel for passing ownership of tokio JoinHandles from PeerSet's background tasks
     ///
     /// The join handles passed into the PeerSet are used populate the `guards` member
     handle_rx: tokio::sync::oneshot::Receiver<Vec<JoinHandle<Result<(), BoxError>>>>,
+
     /// Unordered set of handles to background tasks associated with the `PeerSet`
     ///
     /// These guards are checked for errors as part of `poll_ready` which lets
     /// the `PeerSet` propagate errors from background tasks back to the user
     guards: futures::stream::FuturesUnordered<JoinHandle<Result<(), BoxError>>>,
-    inventory_registry: InventoryRegistry,
-    /// The last time we logged a message about the peer set size
-    last_peer_log: Option<Instant>,
+
     /// A shared list of peer addresses.
     ///
     /// Used for logging diagnostics.
     address_book: Arc<std::sync::Mutex<AddressBook>>,
+
+    /// The last time we logged a message about the peer set size
+    last_peer_log: Option<Instant>,
+
     /// The configured limit for inbound and outbound connections.
+    ///
+    /// The peer set panics if this size is exceeded.
+    /// If that happens, our connection limit code has a bug.
     peerset_total_connection_limit: usize,
 }
 
+impl<D> Drop for PeerSet<D>
+where
+    D: Discover<Key = SocketAddr> + Unpin,
+    D::Service: Service<Request, Response = Response> + Load,
+    D::Error: Into<BoxError>,
+    <D::Service as Service<Request>>::Error: Into<BoxError> + 'static,
+    <D::Service as Service<Request>>::Future: Send + 'static,
+    <D::Service as Load>::Metric: Debug,
+{
+    fn drop(&mut self) {
+        self.shut_down_tasks_and_channels()
+    }
+}
+
 impl<D> PeerSet<D>
 where
     D: Discover<Key = SocketAddr> + Unpin,
@@ -169,15 +212,22 @@ where
         address_book: Arc<std::sync::Mutex<AddressBook>>,
     ) -> Self {
         Self {
+            // Ready peers
             discover,
-            preselected_p2c_index: None,
             ready_services: IndexMap::new(),
-            cancel_handles: HashMap::new(),
+            preselected_p2c_index: None,
+            inventory_registry: InventoryRegistry::new(inv_stream),
+
+            // Unready peers
             unready_services: FuturesUnordered::new(),
+            cancel_handles: HashMap::new(),
             demand_signal,
-            guards: futures::stream::FuturesUnordered::new(),
+
+            // Background tasks
             handle_rx,
-            inventory_registry: InventoryRegistry::new(inv_stream),
+            guards: futures::stream::FuturesUnordered::new(),
+
+            // Metrics
             last_peer_log: None,
             address_book,
             peerset_total_connection_limit: config.peerset_total_connection_limit(),
@@ -189,42 +239,107 @@ where
     /// If any background task exits, shuts down all other background tasks,
     /// and returns an error.
     fn poll_background_errors(&mut self, cx: &mut Context) -> Result<(), BoxError> {
-        if self.guards.is_empty() {
-            match self.handle_rx.try_recv() {
-                Ok(handles) => {
-                    for handle in handles {
-                        self.guards.push(handle);
-                    }
-                }
-                Err(TryRecvError::Closed) => unreachable!(
-                    "try_recv will never be called if the futures have already been received"
-                ),
-                Err(TryRecvError::Empty) => return Ok(()),
-            }
+        if let Some(result) = self.receive_tasks_if_needed() {
+            return result;
         }
 
-        let exit_error = match Pin::new(&mut self.guards).poll_next(cx) {
-            Poll::Pending => return Ok(()),
+        match Pin::new(&mut self.guards).poll_next(cx) {
+            // All background tasks are still running.
+            Poll::Pending => Ok(()),
+
             Poll::Ready(Some(res)) => {
                 info!(
                     background_tasks = %self.guards.len(),
                     "a peer set background task exited, shutting down other peer set tasks"
                 );
 
+                self.shut_down_tasks_and_channels();
+
                 // Flatten the join result and inner result,
                 // then turn Ok() task exits into errors.
                 res.map_err(Into::into)
+                    // TODO: replace with Result::flatten when it stabilises (#70142)
                     .and_then(convert::identity)
                     .and(Err("a peer set background task exited".into()))
             }
-            Poll::Ready(None) => Err("all peer set background tasks have exited".into()),
-        };
 
+            Poll::Ready(None) => {
+                self.shut_down_tasks_and_channels();
+                Err("all peer set background tasks have exited".into())
+            }
+        }
+    }
+
+    /// Receive background tasks, if they've been sent on the channel,
+    /// but not consumed yet.
+    ///
+    /// Returns a result representing the current task state,
+    /// or `None` if the background tasks should be polled to check their state.
+    fn receive_tasks_if_needed(&mut self) -> Option<Result<(), BoxError>> {
+        if self.guards.is_empty() {
+            match self.handle_rx.try_recv() {
+                // The tasks haven't been sent yet.
+                Err(TryRecvError::Empty) => Some(Ok(())),
+
+                // The tasks have been sent, but not consumed.
+                Ok(handles) => {
+                    // Currently, the peer set treats an empty background task set as an error.
+                    //
+                    // TODO: refactor `handle_rx` and `guards` into an enum
+                    //       for the background task state: Waiting/Running/Shutdown.
+                    assert!(
+                        !handles.is_empty(),
+                        "the peer set requires at least one background task"
+                    );
+
+                    for handle in handles {
+                        self.guards.push(handle);
+                    }
+
+                    None
+                }
+
+                // The tasks have been sent and consumed, but then they exited.
+                //
+                // Correctness: the peer set must receive at least one task.
+                //
+                // TODO: refactor `handle_rx` and `guards` into an enum
+                //       for the background task state: Waiting/Running/Shutdown.
+                Err(TryRecvError::Closed) => {
+                    Some(Err("all peer set background tasks have exited".into()))
+                }
+            }
+        } else {
+            None
+        }
+    }
+
+    /// Shut down:
+    /// - services by dropping the service lists
+    /// - background tasks via their join handles or cancel handles
+    /// - channels by closing the channel
+    fn shut_down_tasks_and_channels(&mut self) {
+        // Drop services and cancel their background tasks.
+        self.preselected_p2c_index = None;
+        self.ready_services = IndexMap::new();
+
+        for (_peer_key, handle) in self.cancel_handles.drain() {
+            let _ = handle.send(CancelClientWork);
+        }
+        self.unready_services = FuturesUnordered::new();
+
+        // Close the MorePeers channel for all senders,
+        // so we don't add more peers to a shut down peer set.
+        self.demand_signal.close_channel();
+
+        // Shut down background tasks.
+        self.handle_rx.close();
+        self.receive_tasks_if_needed();
         for guard in self.guards.iter() {
             guard.abort();
         }
 
-        exit_error
+        // TODO: implement graceful shutdown for InventoryRegistry (#1678)
     }
 
     fn poll_unready(&mut self, cx: &mut Context<'_>) {