diff --git a/fs/btrfs/ctree.h b/fs/btrfs/ctree.h
index bc57e236ac64..2b15fb97d23f 100644
--- a/fs/btrfs/ctree.h
+++ b/fs/btrfs/ctree.h
@@ -2006,6 +2006,7 @@ int btrfs_write_dirty_block_groups(struct btrfs_trans_handle *trans,
 int btrfs_extent_readonly(struct btrfs_root *root, u64 bytenr);
 int btrfs_free_block_groups(struct btrfs_fs_info *info);
 int btrfs_read_block_groups(struct btrfs_root *root);
+int btrfs_can_relocate(struct btrfs_root *root, u64 bytenr);
 int btrfs_make_block_group(struct btrfs_trans_handle *trans,
 			   struct btrfs_root *root, u64 bytes_used,
 			   u64 type, u64 chunk_objectid, u64 chunk_offset,
diff --git a/fs/btrfs/extent-tree.c b/fs/btrfs/extent-tree.c
index 4bd04f3fa8bb..4c7c9467f224 100644
--- a/fs/btrfs/extent-tree.c
+++ b/fs/btrfs/extent-tree.c
@@ -7402,6 +7402,93 @@ out:
 }
 #endif
 
+/*
+ * checks to see if its even possible to relocate this block group.
+ *
+ * @return - -1 if it's not a good idea to relocate this block group, 0 if its
+ * ok to go ahead and try.
+ */
+int btrfs_can_relocate(struct btrfs_root *root, u64 bytenr)
+{
+	struct btrfs_block_group_cache *block_group;
+	struct btrfs_space_info *space_info;
+	struct btrfs_fs_devices *fs_devices = root->fs_info->fs_devices;
+	struct btrfs_device *device;
+	int full = 0;
+	int ret = 0;
+
+	block_group = btrfs_lookup_block_group(root->fs_info, bytenr);
+
+	/* odd, couldn't find the block group, leave it alone */
+	if (!block_group)
+		return -1;
+
+	/* no bytes used, we're good */
+	if (!btrfs_block_group_used(&block_group->item))
+		goto out;
+
+	space_info = block_group->space_info;
+	spin_lock(&space_info->lock);
+
+	full = space_info->full;
+
+	/*
+	 * if this is the last block group we have in this space, we can't
+	 * relocate it.
+	 */
+	if (space_info->total_bytes == block_group->key.offset) {
+		ret = -1;
+		spin_unlock(&space_info->lock);
+		goto out;
+	}
+
+	/*
+	 * need to make sure we have room in the space to handle all of the
+	 * extents from this block group.  If we can, we're good
+	 */
+	if (space_info->bytes_used + space_info->bytes_reserved +
+	    space_info->bytes_pinned + space_info->bytes_readonly +
+	    btrfs_block_group_used(&block_group->item) <
+	    space_info->total_bytes) {
+		spin_unlock(&space_info->lock);
+		goto out;
+	}
+	spin_unlock(&space_info->lock);
+
+	/*
+	 * ok we don't have enough space, but maybe we have free space on our
+	 * devices to allocate new chunks for relocation, so loop through our
+	 * alloc devices and guess if we have enough space.  However, if we
+	 * were marked as full, then we know there aren't enough chunks, and we
+	 * can just return.
+	 */
+	ret = -1;
+	if (full)
+		goto out;
+
+	mutex_lock(&root->fs_info->chunk_mutex);
+	list_for_each_entry(device, &fs_devices->alloc_list, dev_alloc_list) {
+		u64 min_free = btrfs_block_group_used(&block_group->item);
+		u64 dev_offset, max_avail;
+
+		/*
+		 * check to make sure we can actually find a chunk with enough
+		 * space to fit our block group in.
+		 */
+		if (device->total_bytes > device->bytes_used + min_free) {
+			ret = find_free_dev_extent(NULL, device, min_free,
+						   &dev_offset, &max_avail);
+			if (!ret)
+				break;
+			ret = -1;
+		}
+	}
+	mutex_unlock(&root->fs_info->chunk_mutex);
+out:
+	btrfs_put_block_group(block_group);
+	return ret;
+}
+
 static int find_first_block_group(struct btrfs_root *root,
 		struct btrfs_path *path, struct btrfs_key *key)
 {
diff --git a/fs/btrfs/volumes.c b/fs/btrfs/volumes.c
index d2358c06bbd9..be953afe804c 100644
--- a/fs/btrfs/volumes.c
+++ b/fs/btrfs/volumes.c
@@ -719,10 +719,9 @@ error:
  * called very infrequently and that a given device has a small number
  * of extents
  */
-static noinline int find_free_dev_extent(struct btrfs_trans_handle *trans,
-					 struct btrfs_device *device,
-					 u64 num_bytes, u64 *start,
-					 u64 *max_avail)
+int find_free_dev_extent(struct btrfs_trans_handle *trans,
+			 struct btrfs_device *device, u64 num_bytes,
+			 u64 *start, u64 *max_avail)
 {
 	struct btrfs_key key;
 	struct btrfs_root *root = device->dev_root;
@@ -1736,6 +1735,10 @@ static int btrfs_relocate_chunk(struct btrfs_root *root,
 	extent_root = root->fs_info->extent_root;
 	em_tree = &root->fs_info->mapping_tree.map_tree;
 
+	ret = btrfs_can_relocate(extent_root, chunk_offset);
+	if (ret)
+		return -ENOSPC;
+
 	/* step one, relocate all the extents inside this chunk */
 	ret = btrfs_relocate_block_group(extent_root, chunk_offset);
 	BUG_ON(ret);
@@ -1807,12 +1810,15 @@ static int btrfs_relocate_sys_chunks(struct btrfs_root *root)
 	struct btrfs_key found_key;
 	u64 chunk_tree = chunk_root->root_key.objectid;
 	u64 chunk_type;
+	bool retried = false;
+	int failed = 0;
 	int ret;
 
 	path = btrfs_alloc_path();
 	if (!path)
 		return -ENOMEM;
 
+again:
 	key.objectid = BTRFS_FIRST_CHUNK_TREE_OBJECTID;
 	key.offset = (u64)-1;
 	key.type = BTRFS_CHUNK_ITEM_KEY;
@@ -1842,7 +1848,10 @@ static int btrfs_relocate_sys_chunks(struct btrfs_root *root)
 			ret = btrfs_relocate_chunk(chunk_root, chunk_tree,
 						   found_key.objectid,
 						   found_key.offset);
-			BUG_ON(ret);
+			if (ret == -ENOSPC)
+				failed++;
+			else if (ret)
+				BUG();
 		}
 
 		if (found_key.offset == 0)
@@ -1850,6 +1859,14 @@ static int btrfs_relocate_sys_chunks(struct btrfs_root *root)
 		key.offset = found_key.offset - 1;
 	}
 	ret = 0;
+	if (failed && !retried) {
+		failed = 0;
+		retried = true;
+		goto again;
+	} else if (failed && retried) {
+		WARN_ON(1);
+		ret = -ENOSPC;
+	}
 error:
 	btrfs_free_path(path);
 	return ret;
@@ -1894,6 +1911,8 @@ int btrfs_balance(struct btrfs_root *dev_root)
 			continue;
 
 		ret = btrfs_shrink_device(device, old_size - size_to_free);
+		if (ret == -ENOSPC)
+			break;
 		BUG_ON(ret);
 
 		trans = btrfs_start_transaction(dev_root, 1);
@@ -1938,9 +1957,8 @@ int btrfs_balance(struct btrfs_root *dev_root)
 		chunk = btrfs_item_ptr(path->nodes[0],
 				       path->slots[0],
 				       struct btrfs_chunk);
-		key.offset = found_key.offset;
 		/* chunk zero is special */
-		if (key.offset == 0)
+		if (found_key.offset == 0)
 			break;
 
 		btrfs_release_path(chunk_root, path);
@@ -1948,7 +1966,8 @@ int btrfs_balance(struct btrfs_root *dev_root)
 					   chunk_root->root_key.objectid,
 					   found_key.objectid,
 					   found_key.offset);
-		BUG_ON(ret);
+		BUG_ON(ret && ret != -ENOSPC);
+		key.offset = found_key.offset - 1;
 	}
 	ret = 0;
 error:
@@ -1974,10 +1993,13 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 	u64 chunk_offset;
 	int ret;
 	int slot;
+	int failed = 0;
+	bool retried = false;
 	struct extent_buffer *l;
 	struct btrfs_key key;
 	struct btrfs_super_block *super_copy = &root->fs_info->super_copy;
 	u64 old_total = btrfs_super_total_bytes(super_copy);
+	u64 old_size = device->total_bytes;
 	u64 diff = device->total_bytes - new_size;
 
 	if (new_size >= device->total_bytes)
@@ -1987,12 +2009,6 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 	if (!path)
 		return -ENOMEM;
 
-	trans = btrfs_start_transaction(root, 1);
-	if (!trans) {
-		ret = -ENOMEM;
-		goto done;
-	}
-
 	path->reada = 2;
 
 	lock_chunks(root);
@@ -2001,8 +2017,8 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 	if (device->writeable)
 		device->fs_devices->total_rw_bytes -= diff;
 	unlock_chunks(root);
-	btrfs_end_transaction(trans, root);
 
+again:
 	key.objectid = device->devid;
 	key.offset = (u64)-1;
 	key.type = BTRFS_DEV_EXTENT_KEY;
@@ -2017,6 +2033,7 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 			goto done;
 		if (ret) {
 			ret = 0;
+			btrfs_release_path(root, path);
 			break;
 		}
 
@@ -2024,14 +2041,18 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 		slot = path->slots[0];
 		btrfs_item_key_to_cpu(l, &key, path->slots[0]);
 
-		if (key.objectid != device->devid)
+		if (key.objectid != device->devid) {
+			btrfs_release_path(root, path);
 			break;
+		}
 
 		dev_extent = btrfs_item_ptr(l, slot, struct btrfs_dev_extent);
 		length = btrfs_dev_extent_length(l, dev_extent);
 
-		if (key.offset + length <= new_size)
+		if (key.offset + length <= new_size) {
+			btrfs_release_path(root, path);
 			break;
+		}
 
 		chunk_tree = btrfs_dev_extent_chunk_tree(l, dev_extent);
 		chunk_objectid = btrfs_dev_extent_chunk_objectid(l, dev_extent);
@@ -2040,8 +2061,26 @@ int btrfs_shrink_device(struct btrfs_device *device, u64 new_size)
 
 		ret = btrfs_relocate_chunk(root, chunk_tree, chunk_objectid,
 					   chunk_offset);
-		if (ret)
+		if (ret && ret != -ENOSPC)
 			goto done;
+		if (ret == -ENOSPC)
+			failed++;
+		key.offset -= 1;
+	}
+
+	if (failed && !retried) {
+		failed = 0;
+		retried = true;
+		goto again;
+	} else if (failed && retried) {
+		ret = -ENOSPC;
+		lock_chunks(root);
+
+		device->total_bytes = old_size;
+		if (device->writeable)
+			device->fs_devices->total_rw_bytes += diff;
+		unlock_chunks(root);
+		goto done;
 	}
 
 	/* Shrinking succeeded, else we would be at "done". */
diff --git a/fs/btrfs/volumes.h b/fs/btrfs/volumes.h
index 5139a833f721..31b0fabdd2ea 100644
--- a/fs/btrfs/volumes.h
+++ b/fs/btrfs/volumes.h
@@ -181,4 +181,7 @@ int btrfs_balance(struct btrfs_root *dev_root);
 void btrfs_unlock_volumes(void);
 void btrfs_lock_volumes(void);
 int btrfs_chunk_readonly(struct btrfs_root *root, u64 chunk_offset);
+int find_free_dev_extent(struct btrfs_trans_handle *trans,
+			 struct btrfs_device *device, u64 num_bytes,
+			 u64 *start, u64 *max_avail);
 #endif