diff --git a/CHANGELOG.md b/CHANGELOG.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,27 +1,34 @@
-# 1.3
+# v1.3.0.5
 
+## Fixes
+
+- Fix pool capacity leak when `initSession` fails (#56)
+- Fix background reaper never passively evicting idle connections: it used the connection-lifetime timeout instead of the idleness timeout when checking for idle connections
+
+# v1.3
+
 - Adapt to the new settings model of `hasql-1.9`
 
-# 1.2
+# v1.2
 
 - Migrated to `hasql-1.7`
 - Changed references to `QueryError` in observations to `SessionError`
 
-# 1.1
+# v1.1
 
 - `ReadyForUseConnectionStatus` got extended with the `ConnectionReadyForUseReason` details.
 - `initSession` setting added.
 
-# 1
+# v1
 
 - Optional observability event stream added. Provides a flexible mechanism for monitoring the healthiness of the pool via logs and metrics.
 - Configuration got isolated into a DSL, which will allow to provide new configurations without breaking backward compatibility.
 
-# 0.10.1
+# v0.10.1
 
 - Avoid releasing connections on exceptions thrown in session
 
-# 0.9
+# v0.9
 
 - Maximal lifetime added for connections. Allows to refresh the connections in time cleaning up the resources.
 
@@ -30,19 +37,19 @@
 - The acquisition timeout is now non-optional.
 - Moved to `DiffTime` for timeouts.
 
-# 0.8.0.7
+# v0.8.0.7
 
 Fix excessive connections during releases due to race conditions.
 
-# 0.8.0.5
+# v0.8.0.5
 
 Fix connections not returning to the pool on exceptions.
 
-# 0.8.0.2
+# v0.8.0.2
 
 Fixed Windows build.
 
-# 0.8
+# v0.8
 
 `release` became reusable. You can use it to destroy the whole pool (same as before), but now also you can use it to reset the connections.
 
@@ -54,19 +61,19 @@
 - `acquire` extended with the acquisition timeout parameter
 - `acquireDynamically` extended with the acquisition timeout parameter
 
-# 0.7.2
+# v0.7.2
 
 Added support for dynamic connection configuration ([issue #11](https://github.com/nikita-volkov/hasql-pool/issues/11)).
 
-# 0.7.1.2
+# v0.7.1.2
 
 Fixed connections not being released if they were in use during the call to `release`.
 
-# 0.7.1
+# v0.7.1
 
 Added `Exception` for `UsageError`.
 
-# 0.7
+# v0.7
 
 Simplified the implementation a lot by removing the notion of timeout.
 
@@ -74,7 +81,7 @@
 - Removed the `Settings` type
 - Changed the signature of `acquire`
 
-# 0.6
+# v0.6
 
 Moved away from "resource-pool" and fixed the handling of lost connections.
 
diff --git a/hasql-pool.cabal b/hasql-pool.cabal
--- a/hasql-pool.cabal
+++ b/hasql-pool.cabal
@@ -1,6 +1,6 @@
 cabal-version: 3.0
 name: hasql-pool
-version: 1.3.0.4
+version: 1.3.0.5
 category: Hasql, Database, PostgreSQL
 synopsis: Pool of connections for Hasql
 homepage: https://github.com/nikita-volkov/hasql-pool
diff --git a/src/integration-tests/Helpers/Hooks.hs b/src/integration-tests/Helpers/Hooks.hs
--- a/src/integration-tests/Helpers/Hooks.hs
+++ b/src/integration-tests/Helpers/Hooks.hs
@@ -2,8 +2,8 @@
 module Helpers.Hooks where
 
 import Data.Bool
-import TestcontainersPostgresql qualified
 import Prelude hiding (Handler)
+import TestcontainersPostgresql qualified
 
 -- | Testing action in the scope of the host name and port of a running fresh isolated postgres server.
 type Handler = (Text, Word16) -> IO ()
diff --git a/src/integration-tests/Helpers/Scripts.hs b/src/integration-tests/Helpers/Scripts.hs
--- a/src/integration-tests/Helpers/Scripts.hs
+++ b/src/integration-tests/Helpers/Scripts.hs
@@ -5,9 +5,10 @@
 import Hasql.Connection.Setting.Connection.Param qualified as Connection.Setting.Connection.Param
 import Hasql.Pool qualified as Pool
 import Hasql.Pool.Config qualified as Config
+import Hasql.Session qualified as Session
+import Prelude
 import System.Random.Stateful qualified as Random
 import TextBuilder qualified
-import Prelude
 
 -- |
 -- Parameters provided by the scope.
@@ -45,6 +46,38 @@
   -- Generate app name
   appName <- generateName "hasql-pool-test-"
   onTaggedPool poolSize acqTimeout maxLifetime maxIdletime appName (host, port) (cont appName)
+
+onTaggedPoolWithInitSession :: Int -> DiffTime -> DiffTime -> DiffTime -> Session.Session () -> Text -> ScopeParams -> (Pool.Pool -> IO ()) -> IO ()
+onTaggedPoolWithInitSession poolSize acqTimeout maxLifetime maxIdletime initSession appName (host, port) =
+  bracket
+    ( Pool.acquire
+        ( Config.settings
+            [ Config.size poolSize,
+              Config.acquisitionTimeout acqTimeout,
+              Config.agingTimeout maxLifetime,
+              Config.idlenessTimeout maxIdletime,
+              Config.initSession initSession,
+              Config.staticConnectionSettings
+                [ Connection.Setting.connection
+                    ( Connection.Setting.Connection.params
+                        [ Connection.Setting.Connection.Param.host host,
+                          Connection.Setting.Connection.Param.port (fromIntegral port),
+                          Connection.Setting.Connection.Param.user "postgres",
+                          Connection.Setting.Connection.Param.password "",
+                          Connection.Setting.Connection.Param.dbname "postgres",
+                          Connection.Setting.Connection.Param.other "application_name" appName
+                        ]
+                    )
+                ]
+            ]
+        )
+    )
+    Pool.release
+
+onAutotaggedPoolWithInitSession :: Int -> DiffTime -> DiffTime -> DiffTime -> Session.Session () -> ScopeParams -> (Text -> Pool.Pool -> IO ()) -> IO ()
+onAutotaggedPoolWithInitSession poolSize acqTimeout maxLifetime maxIdletime initSession (host, port) cont = do
+  appName <- generateName "hasql-pool-test-"
+  onTaggedPoolWithInitSession poolSize acqTimeout maxLifetime maxIdletime initSession appName (host, port) (cont appName)
 
 onDefaultTaggedPool :: ScopeParams -> (Text -> Pool.Pool -> IO ()) -> IO ()
 onDefaultTaggedPool =
diff --git a/src/integration-tests/Specs/BySubject/Config/AgingTimeoutSpec.hs b/src/integration-tests/Specs/BySubject/Config/AgingTimeoutSpec.hs
--- a/src/integration-tests/Specs/BySubject/Config/AgingTimeoutSpec.hs
+++ b/src/integration-tests/Specs/BySubject/Config/AgingTimeoutSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/Config/IdlenessTimeoutSpec.hs b/src/integration-tests/Specs/BySubject/Config/IdlenessTimeoutSpec.hs
--- a/src/integration-tests/Specs/BySubject/Config/IdlenessTimeoutSpec.hs
+++ b/src/integration-tests/Specs/BySubject/Config/IdlenessTimeoutSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
@@ -27,3 +27,18 @@
       threadDelay 1_000_000 -- 1s
       res4 <- use pool $ Sessions.getSetting varName
       res4 `shouldBe` Right Nothing
+
+  it "Passively times out idle connections" \scopeParams -> do
+    -- 0.5s connection idle time, large lifetime, so only idleness can explain a passive close.
+    Scripts.onAutotaggedPool 3 10 1_800 1_800 scopeParams \_appName1 pool1 -> do
+      Scripts.onAutotaggedPool 3 10 1_800 0.5 scopeParams \appName2 pool2 -> do
+        res <- use pool2 $ Sessions.selectOne
+        res `shouldBe` Right 1
+        res2 <- use pool1 $ Sessions.countConnections appName2
+        res2 `shouldBe` Right 1
+        -- Give the background reaper (1s tick) a chance to passively evict
+        -- the now-idle connection, without ever calling `use pool2` again
+        -- (which would trigger the separate active idleness check).
+        threadDelay 1_500_000 -- 1.5s
+        res3 <- use pool1 $ Sessions.countConnections appName2
+        res3 `shouldBe` Right 0
diff --git a/src/integration-tests/Specs/BySubject/Config/InitSessionSpec.hs b/src/integration-tests/Specs/BySubject/Config/InitSessionSpec.hs
--- a/src/integration-tests/Specs/BySubject/Config/InitSessionSpec.hs
+++ b/src/integration-tests/Specs/BySubject/Config/InitSessionSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
@@ -41,3 +41,19 @@
       res <- use pool do
         Sessions.getSetting varName
       shouldBe res (Right (Just "1"))
+
+  -- https://github.com/nikita-volkov/hasql-pool/issues/56
+  it "Does not exhaust the pool capacity when it fails" \scopeParams -> do
+    -- Pool of size 1 whose init session always fails, with a short
+    -- acquisition timeout so that a leaked capacity slot shows up as
+    -- an AcquisitionTimeoutUsageError instead of hanging the test.
+    Scripts.onAutotaggedPoolWithInitSession 1 1 60 60 Sessions.badQuery scopeParams \_ pool -> do
+      res1 <- use pool Sessions.selectOne
+      res1 `shouldSatisfy` \case
+        Left (SessionUsageError _) -> True
+        _ -> False
+
+      res2 <- use pool Sessions.selectOne
+      res2 `shouldSatisfy` \case
+        Left (SessionUsageError _) -> True
+        _ -> False
diff --git a/src/integration-tests/Specs/BySubject/Helpers/Sessions/CountConnectionsSpec.hs b/src/integration-tests/Specs/BySubject/Helpers/Sessions/CountConnectionsSpec.hs
--- a/src/integration-tests/Specs/BySubject/Helpers/Sessions/CountConnectionsSpec.hs
+++ b/src/integration-tests/Specs/BySubject/Helpers/Sessions/CountConnectionsSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/Helpers/Sessions/GetSettingSpec.hs b/src/integration-tests/Specs/BySubject/Helpers/Sessions/GetSettingSpec.hs
--- a/src/integration-tests/Specs/BySubject/Helpers/Sessions/GetSettingSpec.hs
+++ b/src/integration-tests/Specs/BySubject/Helpers/Sessions/GetSettingSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/ReleaseSpec.hs b/src/integration-tests/Specs/BySubject/ReleaseSpec.hs
--- a/src/integration-tests/Specs/BySubject/ReleaseSpec.hs
+++ b/src/integration-tests/Specs/BySubject/ReleaseSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/SpecHook.hs b/src/integration-tests/Specs/BySubject/SpecHook.hs
--- a/src/integration-tests/Specs/BySubject/SpecHook.hs
+++ b/src/integration-tests/Specs/BySubject/SpecHook.hs
@@ -3,8 +3,8 @@
 
 import Helpers.Hooks qualified as Hooks
 import Helpers.Scripts qualified as Scripts
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 hook :: SpecWith Scripts.ScopeParams -> Spec
 hook =
diff --git a/src/integration-tests/Specs/BySubject/UsageError/AcquisitionTimeoutSpec.hs b/src/integration-tests/Specs/BySubject/UsageError/AcquisitionTimeoutSpec.hs
--- a/src/integration-tests/Specs/BySubject/UsageError/AcquisitionTimeoutSpec.hs
+++ b/src/integration-tests/Specs/BySubject/UsageError/AcquisitionTimeoutSpec.hs
@@ -4,8 +4,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/UsageError/SessionSpec.hs b/src/integration-tests/Specs/BySubject/UsageError/SessionSpec.hs
--- a/src/integration-tests/Specs/BySubject/UsageError/SessionSpec.hs
+++ b/src/integration-tests/Specs/BySubject/UsageError/SessionSpec.hs
@@ -4,8 +4,8 @@
 import Hasql.Session qualified as Session
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/integration-tests/Specs/BySubject/UseSpec.hs b/src/integration-tests/Specs/BySubject/UseSpec.hs
--- a/src/integration-tests/Specs/BySubject/UseSpec.hs
+++ b/src/integration-tests/Specs/BySubject/UseSpec.hs
@@ -3,8 +3,8 @@
 import Hasql.Pool
 import Helpers.Scripts qualified as Scripts
 import Helpers.Sessions qualified as Sessions
-import Test.Hspec
 import Prelude
+import Test.Hspec
 
 spec :: SpecWith Scripts.ScopeParams
 spec = do
diff --git a/src/library/exposed/Hasql/Pool.hs b/src/library/exposed/Hasql/Pool.hs
--- a/src/library/exposed/Hasql/Pool.hs
+++ b/src/library/exposed/Hasql/Pool.hs
@@ -86,7 +86,7 @@
     join . atomically $ do
       entries <- flushTQueue connectionQueue
       let (agedEntries, unagedEntries) = partition (entryIsAged agingTimeoutNanos now) entries
-          (idleEntries, liveEntries) = partition (entryIsIdle agingTimeoutNanos now) unagedEntries
+          (idleEntries, liveEntries) = partition (entryIsIdle maxIdletimeNanos now) unagedEntries
       traverse_ (writeTQueue connectionQueue) liveEntries
       return $ do
         forM_ agedEntries $ \entry -> do
@@ -177,6 +177,7 @@
           Session.run poolInitSession connection >>= \case
             Left err -> do
               Connection.release connection
+              atomically $ modifyTVar' poolCapacity succ
               ErrorsDestruction.reset
                 ( \details -> do
                     poolObserver (ConnectionObservation id (TerminatedConnectionStatus (NetworkErrorConnectionTerminationReason (fmap (Text.decodeUtf8With Text.lenientDecode) details))))
diff --git a/src/library/other/Hasql/Pool/Prelude.hs b/src/library/other/Hasql/Pool/Prelude.hs
--- a/src/library/other/Hasql/Pool/Prelude.hs
+++ b/src/library/other/Hasql/Pool/Prelude.hs
@@ -61,6 +61,7 @@
 import GHC.Generics as Exports (Generic)
 import GHC.IO.Exception as Exports
 import Numeric as Exports
+import Prelude as Exports hiding (all, and, any, concat, concatMap, elem, fail, foldl, foldl1, foldr, foldr1, id, mapM, mapM_, maximum, minimum, notElem, or, product, sequence, sequence_, sum, (.))
 import System.Environment as Exports
 import System.Exit as Exports
 import System.IO as Exports (Handle, hClose)
@@ -72,4 +73,3 @@
 import Text.Printf as Exports (hPrintf, printf)
 import Text.Read as Exports (Read (..), readEither, readMaybe)
 import Unsafe.Coerce as Exports
-import Prelude as Exports hiding (all, and, any, concat, concatMap, elem, fail, foldl, foldl1, foldr, foldr1, id, mapM, mapM_, maximum, minimum, notElem, or, product, sequence, sequence_, sum, (.))