diff --git a/dial_sync.go b/dial_sync.go
index f746b9a9a30c3ac53da9b954c6142f7ce609d849..4c1230f5fc393c2993228fd1790ef681c5244387 100644
--- a/dial_sync.go
+++ b/dial_sync.go
@@ -2,11 +2,15 @@ package swarm
 
 import (
 	"context"
+	"errors"
 	"sync"
 
 	"github.com/libp2p/go-libp2p-core/peer"
 )
 
+// TODO: change this text when we fix the bug
+var errDialCanceled = errors.New("dial was aborted internally, likely due to https://git.io/Je2wW")
+
 // DialFunc is the type of function expected by DialSync.
 type DialFunc func(context.Context, peer.ID) (*Conn, error)
 
@@ -78,6 +82,16 @@ func (ad *activeDial) decref() {
 
 func (ad *activeDial) start(ctx context.Context) {
 	ad.conn, ad.err = ad.ds.dialFunc(ctx, ad.id)
+
+	// This isn't the user's context so we should fix the error.
+	switch ad.err {
+	case context.Canceled:
+		// The dial was canceled with `CancelDial`.
+		ad.err = errDialCanceled
+	case context.DeadlineExceeded:
+		// We hit an internal timeout, not a context timeout.
+		ad.err = ErrDialTimeout
+	}
 	close(ad.waitch)
 	ad.cancel()
 }
diff --git a/swarm.go b/swarm.go
index 5366bdcc6f7ba12d45fdb9e5b9fd5c7f21a0da5f..f7c57717fa9d8c57c302bf5ada175d8e84700587 100644
--- a/swarm.go
+++ b/swarm.go
@@ -40,6 +40,9 @@ var ErrSwarmClosed = errors.New("swarm closed")
 // transport is misbehaving.
 var ErrAddrFiltered = errors.New("address filtered")
 
+// ErrDialTimeout is returned when one a dial times out due to the global timeout
+var ErrDialTimeout = errors.New("dial timed out")
+
 // Swarm is a connection muxer, allowing connections to other peers to
 // be opened and closed, while still using the same Chan for all
 // communication. The Chan sends/receives Messages, which note the
diff --git a/swarm_dial.go b/swarm_dial.go
index ffb7ab5e2c0b4db8f432f43b3cbbdcd1640ccaca..475a7e250eab269952705d7902ec556b9270641c 100644
--- a/swarm_dial.go
+++ b/swarm_dial.go
@@ -221,12 +221,23 @@ func (s *Swarm) dialPeer(ctx context.Context, p peer.ID) (*Conn, error) {
 	defer cancel()
 
 	conn, err = s.dsync.DialLock(ctx, p)
-	if err != nil {
-		return nil, err
+	if err == nil {
+		return conn, nil
 	}
 
 	log.Debugf("network for %s finished dialing %s", s.local, p)
-	return conn, err
+
+	if ctx.Err() != nil {
+		// Context error trumps any dial errors as it was likely the ultimate cause.
+		return nil, ctx.Err()
+	}
+
+	if s.ctx.Err() != nil {
+		// Ok, so the swarm is shutting down.
+		return nil, ErrSwarmClosed
+	}
+
+	return nil, err
 }
 
 // doDial is an ugly shim method to retain all the logging and backoff logic