diff --git a/xds/src/test/java/io/grpc/xds/XdsClientFallbackTest.java b/xds/src/test/java/io/grpc/xds/XdsClientFallbackTest.java
index 94b49bd94b2..7cf6280711f 100644
--- a/xds/src/test/java/io/grpc/xds/XdsClientFallbackTest.java
+++ b/xds/src/test/java/io/grpc/xds/XdsClientFallbackTest.java
@@ -31,6 +31,8 @@
 
 import com.google.common.collect.ImmutableList;
 import com.google.common.collect.ImmutableMap;
+import io.grpc.ChannelCredentials;
+import io.grpc.Grpc;
 import io.grpc.MetricRecorder;
 import io.grpc.Status;
 import io.grpc.internal.ExponentialBackoffPolicy;
@@ -43,11 +45,14 @@
 import io.grpc.xds.client.XdsClientImpl;
 import io.grpc.xds.client.XdsClientMetricReporter;
 import io.grpc.xds.client.XdsInitializationException;
+import io.grpc.xds.client.XdsTransportFactory;
 import java.net.InetSocketAddress;
 import java.util.Arrays;
 import java.util.Collections;
 import java.util.Map;
 import java.util.UUID;
+import java.util.concurrent.ExecutorService;
+import java.util.concurrent.Executors;
 import java.util.concurrent.TimeUnit;
 import java.util.logging.Level;
 import java.util.logging.Logger;
@@ -338,9 +343,21 @@ private static void verifyNoSubscribers(ControlPlaneRule rule) {
   public void connect_then_mainServerDown_fallbackServerUp() throws Exception {
     mainXdsServer.restartXdsServer();
     fallbackServer.restartXdsServer();
+    ExecutorService executor = Executors.newFixedThreadPool(1);
+    XdsTransportFactory xdsTransportFactory = new XdsTransportFactory() {
+      @Override
+      public XdsTransport create(Bootstrapper.ServerInfo serverInfo) {
+        ChannelCredentials channelCredentials =
+            (ChannelCredentials) serverInfo.implSpecificConfig();
+        return new GrpcXdsTransportFactory.GrpcXdsTransport(
+            Grpc.newChannelBuilder(serverInfo.target(), channelCredentials)
+              .executor(executor)
+              .build());
+      }
+    };
     XdsClientImpl xdsClient = CommonBootstrapperTestUtils.createXdsClient(
         new GrpcBootstrapperImpl().bootstrap(defaultBootstrapOverride()),
-        DEFAULT_XDS_TRANSPORT_FACTORY, fakeClock, new ExponentialBackoffPolicy.Provider(),
+        xdsTransportFactory, fakeClock, new ExponentialBackoffPolicy.Provider(),
         MessagePrinter.INSTANCE, xdsClientMetricReporter);
 
     xdsClient.watchXdsResource(XdsListenerResource.getInstance(), MAIN_SERVER, ldsWatcher);
@@ -355,7 +372,8 @@ public void connect_then_mainServerDown_fallbackServerUp() throws Exception {
     // Sleep for the ADS stream disconnect to be processed and for the retry to fail. Between those
     // two sleeps we need the fakeClock to progress by 1 second to restart the ADS stream.
     for (int i = 0; i < 5; i++) {
-      fakeClock.forwardTime(1000, TimeUnit.MILLISECONDS);
+      // FakeClock is not thread-safe, and the retry scheduling is concurrent to this test thread
+      executor.submit(() -> fakeClock.forwardTime(1000, TimeUnit.MILLISECONDS)).get();
       TimeUnit.SECONDS.sleep(1);
     }
 
@@ -393,6 +411,7 @@ public void connect_then_mainServerDown_fallbackServerUp() throws Exception {
     fakeClock.forwardTime(15000, TimeUnit.MILLISECONDS); // Does not exist timer
     verify(cdsWatcher2, timeout(5000)).onResourceDoesNotExist(eq(CLUSTER_NAME));
     xdsClient.shutdown();
+    executor.shutdown();
   }
 
   @Test