diff --git a/internal/codespaces/grpc/client.go b/internal/codespaces/grpc/client.go
index b4c5a0394..76119d659 100644
--- a/internal/codespaces/grpc/client.go
+++ b/internal/codespaces/grpc/client.go
@@ -19,9 +19,8 @@ import (
 )
 
 const (
-	serverConnectionTimeout = 5 * time.Second
-	requestTimeout          = 30 * time.Second
-	portConnectionTimeout   = 30 * time.Second
+	ConnectionTimeout = 5 * time.Second
+	RequestTimeout    = 30 * time.Second
 )
 
 const (
@@ -34,6 +33,7 @@ type Client struct {
 	token         string
 	listener      net.Listener
 	jupyterClient jupyter.JupyterServerHostClient
+	cancelPF      context.CancelFunc
 }
 
 type liveshareSession interface {
@@ -48,47 +48,67 @@ func Connect(ctx context.Context, session liveshareSession, token string) (*Clie
 	if err != nil {
 		return nil, fmt.Errorf("failed to listen to local port over tcp: %w", err)
 	}
-
-	// Tunnel the remote gRPC server port to the local port
 	localAddress := fmt.Sprintf("127.0.0.1:%d", listener.Addr().(*net.TCPAddr).Port)
-	internalTunnelClosed := make(chan error, 1)
-	go func() {
-		fwd := liveshare.NewPortForwarder(session, codespacesInternalSessionName, codespacesInternalPort, true)
-		internalTunnelClosed <- fwd.ForwardToListener(ctx, listener)
+
+	client := &Client{
+		token:    token,
+		listener: listener,
+	}
+
+	// Create a cancelable context to be able to cancel background tasks
+	// if we encounter an error while connecting to the gRPC server
+	connectctx, cancel := context.WithCancel(context.Background())
+	defer func() {
+		if err != nil {
+			cancel()
+		}
 	}()
 
-	// Ping the port to ensure that it is fully forwarded before continuing
-	connctx, cancel := context.WithTimeout(ctx, portConnectionTimeout)
-	defer cancel()
-	err = liveshare.WaitForPortConnection(connctx, localAddress)
-	if err != nil {
-		return nil, fmt.Errorf("failed to connect to local port: %w", err)
+	ch := make(chan error, 2) // Buffered channel to ensure we don't block on the goroutine
+
+	// Ensure we close the port forwarder if we encounter an error
+	// or once the gRPC connection is closed. pfcancel is retained
+	// to close the PF whenever we close the gRPC connection.
+	pfctx, pfcancel := context.WithCancel(connectctx)
+	client.cancelPF = pfcancel
+
+	// Tunnel the remote gRPC server port to the local port
+	go func() {
+		fwd := liveshare.NewPortForwarder(session, codespacesInternalSessionName, codespacesInternalPort, true)
+		ch <- fwd.ForwardToListener(pfctx, listener)
+	}()
+
+	var conn *grpc.ClientConn
+	go func() {
+		// Attempt to connect to the port
+		opts := []grpc.DialOption{
+			grpc.WithTransportCredentials(insecure.NewCredentials()),
+			grpc.WithBlock(),
+		}
+		conn, err = grpc.DialContext(connectctx, localAddress, opts...)
+		ch <- err // nil if we successfully connected
+	}()
+
+	// Wait for the connection to be established or for the context to be cancelled
+	select {
+	case <-ctx.Done():
+		return nil, ctx.Err()
+	case err := <-ch:
+		if err != nil {
+			return nil, err
+		}
 	}
 
-	// Attempt to connect to the port
-	opts := []grpc.DialOption{
-		grpc.WithTransportCredentials(insecure.NewCredentials()),
-		grpc.WithBlock(),
-	}
-	ctx, cancel = context.WithTimeout(ctx, serverConnectionTimeout)
-	defer cancel()
-	conn, err := grpc.DialContext(ctx, localAddress, opts...)
-	if err != nil {
-		return nil, err
-	}
+	client.conn = conn
+	client.jupyterClient = jupyter.NewJupyterServerHostClient(conn)
 
-	g := &Client{
-		conn:          conn,
-		token:         token,
-		listener:      listener,
-		jupyterClient: jupyter.NewJupyterServerHostClient(conn),
-	}
-
-	return g, nil
+	return client, nil
 }
 
 // Closes the gRPC connection
 func (g *Client) Close() error {
+	g.cancelPF()
+
 	// Closing the local listener effectively closes the gRPC connection
 	if err := g.listener.Close(); err != nil {
 		g.conn.Close() // If we fail to close the listener, explicitly close the gRPC connection and ignore any error
@@ -105,9 +125,7 @@ func (g *Client) appendMetadata(ctx context.Context) context.Context {
 
 // Starts a remote JupyterLab server to allow the user to connect to the codespace via JupyterLab in their browser
 func (g *Client) StartJupyterServer(ctx context.Context) (port int, serverUrl string, err error) {
-	ctx, cancel := context.WithTimeout(ctx, requestTimeout)
 	ctx = g.appendMetadata(ctx)
-	defer cancel()
 
 	response, err := g.jupyterClient.GetRunningServer(ctx, &jupyter.GetRunningServerRequest{})
 	if err != nil {
diff --git a/internal/codespaces/grpc/client_test.go b/internal/codespaces/grpc/client_test.go
index 62a7b1723..d905c0e29 100644
--- a/internal/codespaces/grpc/client_test.go
+++ b/internal/codespaces/grpc/client_test.go
@@ -3,29 +3,35 @@ package grpc
 import (
 	"context"
 	"fmt"
-	"os"
+	"log"
 	"testing"
 
-	"github.com/cli/cli/v2/internal/codespaces/grpc/test"
+	grpctest "github.com/cli/cli/v2/internal/codespaces/grpc/test"
 )
 
-func TestMain(m *testing.M) {
+func startServer(t *testing.T) {
+	t.Helper()
+
+	ctx, cancel := context.WithCancel(context.Background())
+
 	// Start the gRPC server in the background
 	go func() {
-		err := test.StartServer()
-		if err != nil {
-			panic(err)
+		err := grpctest.StartServer(ctx)
+		if err != nil && err != context.Canceled {
+			log.Println(fmt.Errorf("error starting test server: %v", err))
 		}
 	}()
 
-	m.Run()
-	os.Exit(0)
+	// Stop the gRPC server when the test is done
+	t.Cleanup(func() {
+		cancel()
+	})
 }
 
-func connect(t *testing.T) (ctx context.Context, client *Client) {
+func connect(t *testing.T) (client *Client) {
 	t.Helper()
-	ctx = context.Background()
-	client, err := Connect(ctx, &test.Session{}, "token")
+
+	client, err := Connect(context.Background(), &grpctest.Session{}, "token")
 	if err != nil {
 		t.Fatalf("error connecting to internal server: %v", err)
 	}
@@ -34,31 +40,34 @@ func connect(t *testing.T) (ctx context.Context, client *Client) {
 		client.Close()
 	})
 
-	return ctx, client
+	return client
 }
 
 // Test that the gRPC client returns the correct port and URL when the JupyterLab server starts successfully
 func TestStartJupyterServerSuccess(t *testing.T) {
-	ctx, client := connect(t)
-	port, url, err := client.StartJupyterServer(ctx)
+	startServer(t)
+	client := connect(t)
+
+	port, url, err := client.StartJupyterServer(context.Background())
 	if err != nil {
 		t.Fatalf("expected %v, got %v", nil, err)
 	}
-	if port != test.JupyterPort {
-		t.Fatalf("expected %d, got %d", test.JupyterPort, port)
+	if port != grpctest.JupyterPort {
+		t.Fatalf("expected %d, got %d", grpctest.JupyterPort, port)
 	}
-	if url != test.JupyterServerUrl {
-		t.Fatalf("expected %s, got %s", test.JupyterServerUrl, url)
+	if url != grpctest.JupyterServerUrl {
+		t.Fatalf("expected %s, got %s", grpctest.JupyterServerUrl, url)
 	}
 }
 
 // Test that the gRPC client returns an error when the JupyterLab server fails to start
 func TestStartJupyterServerFailure(t *testing.T) {
-	ctx, client := connect(t)
-	test.JupyterMessage = "error message"
-	test.JupyterResult = false
-	errorMessage := fmt.Sprintf("failed to start JupyterLab: %s", test.JupyterMessage)
-	port, url, err := client.StartJupyterServer(ctx)
+	startServer(t)
+	client := connect(t)
+	grpctest.JupyterMessage = "error message"
+	grpctest.JupyterResult = false
+	errorMessage := fmt.Sprintf("failed to start JupyterLab: %s", grpctest.JupyterMessage)
+	port, url, err := client.StartJupyterServer(context.Background())
 	if err.Error() != errorMessage {
 		t.Fatalf("expected %v, got %v", errorMessage, err)
 	}
diff --git a/internal/codespaces/grpc/test/server.go b/internal/codespaces/grpc/test/server.go
index 50608a9fa..8af5efc29 100644
--- a/internal/codespaces/grpc/test/server.go
+++ b/internal/codespaces/grpc/test/server.go
@@ -35,7 +35,7 @@ func (s *server) GetRunningServer(ctx context.Context, in *jupyter.GetRunningSer
 }
 
 // Starts the mock gRPC server listening on port 50051
-func StartServer() error {
+func StartServer(ctx context.Context) error {
 	listener, err := net.Listen("tcp", fmt.Sprintf("127.0.0.1:%d", ServerPort))
 	if err != nil {
 		return fmt.Errorf("failed to listen: %v", err)
@@ -44,9 +44,19 @@ func StartServer() error {
 
 	s := grpc.NewServer()
 	jupyter.RegisterJupyterServerHostServer(s, &server{})
-	if err := s.Serve(listener); err != nil {
-		return fmt.Errorf("failed to serve: %v", err)
-	}
 
-	return nil
+	ch := make(chan error, 1)
+	go func() {
+		if err := s.Serve(listener); err != nil {
+			ch <- fmt.Errorf("failed to serve: %v", err)
+		}
+	}()
+
+	select {
+	case <-ctx.Done():
+		s.Stop()
+		return ctx.Err()
+	case err := <-ch:
+		return err
+	}
 }
diff --git a/internal/codespaces/grpc/test/session.go b/internal/codespaces/grpc/test/session.go
index 70d81d41e..aba0f17ee 100644
--- a/internal/codespaces/grpc/test/session.go
+++ b/internal/codespaces/grpc/test/session.go
@@ -3,7 +3,6 @@ package test
 import (
 	"context"
 	"fmt"
-	"log"
 	"net"
 
 	"github.com/cli/cli/v2/pkg/liveshare"
@@ -11,23 +10,22 @@ import (
 )
 
 type Session struct {
+	channel ssh.Channel
 }
 
 func (s *Session) KeepAlive(reason string) {
 }
 
 func (s *Session) StartSharing(ctx context.Context, sessionName string, port int) (liveshare.ChannelID, error) {
+	conn, err := net.Dial("tcp", fmt.Sprintf("127.0.0.1:%d", ServerPort))
+	if err != nil {
+		return liveshare.ChannelID{}, err
+	}
+	s.channel = &Channel{conn}
 	return liveshare.ChannelID{}, nil
 }
 
 // Creates mock SSH channel connected to the mock gRPC server
 func (s *Session) OpenStreamingChannel(ctx context.Context, id liveshare.ChannelID) (ssh.Channel, error) {
-	dialer := net.Dialer{}
-	conn, err := dialer.Dial("tcp", fmt.Sprintf("127.0.0.1:%d", ServerPort))
-	if err != nil {
-		log.Fatalf("failed to connect to the grpc server: %v", err)
-	}
-	return &Channel{
-		conn: conn,
-	}, nil
+	return s.channel, nil
 }
diff --git a/pkg/cmd/codespace/jupyter.go b/pkg/cmd/codespace/jupyter.go
index c37a97ea7..5c19c2ab1 100644
--- a/pkg/cmd/codespace/jupyter.go
+++ b/pkg/cmd/codespace/jupyter.go
@@ -45,17 +45,17 @@ func (a *App) Jupyter(ctx context.Context, codespaceName string) (err error) {
 	defer safeClose(session, &err)
 
 	a.StartProgressIndicatorWithLabel("Starting JupyterLab on codespace")
-	client, err := grpc.Connect(ctx, session, codespace.Connection.SessionToken)
+	client, err := connectToGRPCServer(ctx, session, codespace.Connection.SessionToken)
 	if err != nil {
-		return fmt.Errorf("error connecting to internal server: %w", err)
+		return fmt.Errorf("failed to connect to internal server: %w", err)
 	}
 	defer safeClose(client, &err)
 
-	serverPort, serverUrl, err := client.StartJupyterServer(ctx)
-	a.StopProgressIndicator()
+	serverPort, serverUrl, err := startJupyterServer(ctx, client)
 	if err != nil {
 		return fmt.Errorf("failed to start JupyterLab server: %w", err)
 	}
+	a.StopProgressIndicator()
 
 	// Pass 0 to pick a random port
 	listen, err := net.Listen("tcp", fmt.Sprintf("127.0.0.1:%d", 0))
@@ -87,3 +87,27 @@ func (a *App) Jupyter(ctx context.Context, codespaceName string) (err error) {
 		return nil // success
 	}
 }
+
+func connectToGRPCServer(ctx context.Context, session liveshareSession, token string) (*grpc.Client, error) {
+	ctx, cancel := context.WithTimeout(ctx, grpc.ConnectionTimeout)
+	defer cancel()
+
+	client, err := grpc.Connect(ctx, session, token)
+	if err != nil {
+		return nil, fmt.Errorf("error connecting to internal server: %w", err)
+	}
+
+	return client, nil
+}
+
+func startJupyterServer(ctx context.Context, client *grpc.Client) (int, string, error) {
+	ctx, cancel := context.WithTimeout(ctx, grpc.RequestTimeout)
+	defer cancel()
+
+	serverPort, serverUrl, err := client.StartJupyterServer(ctx)
+	if err != nil {
+		return 0, "", fmt.Errorf("failed to start JupyterLab server: %w", err)
+	}
+
+	return serverPort, serverUrl, nil
+}
diff --git a/pkg/liveshare/port_forwarder.go b/pkg/liveshare/port_forwarder.go
index 923415c01..f042eeaea 100644
--- a/pkg/liveshare/port_forwarder.go
+++ b/pkg/liveshare/port_forwarder.go
@@ -99,41 +99,6 @@ func (fwd *PortForwarder) Forward(ctx context.Context, conn io.ReadWriteCloser)
 	return awaitError(ctx, errc)
 }
 
-// Loops until we can connect to the address or the context is canceled.
-func WaitForPortConnection(ctx context.Context, address string) error {
-	for {
-		select {
-		case <-ctx.Done():
-			return ctx.Err()
-		default:
-			err := connectToAddr(address)
-			if err != nil {
-				continue
-			}
-
-			return nil // success
-		}
-	}
-}
-
-// Connects to and pings a given address to ensure that the server is shared and the port is forwarded.
-func connectToAddr(address string) error {
-	// Verify that the port can be connected to
-	conn, err := net.Dial("tcp", address)
-	if err != nil {
-		return err
-	}
-	defer conn.Close()
-
-	// Send a ping and make sure it succeed
-	_, err = conn.Write([]byte("ping"))
-	if err != nil {
-		return err
-	}
-
-	return nil
-}
-
 func (fwd *PortForwarder) shareRemotePort(ctx context.Context) (ChannelID, error) {
 	id, err := fwd.session.StartSharing(ctx, fwd.name, fwd.remotePort)
 	if err != nil {