diff --git a/CHANGELOG.md b/CHANGELOG.md
index b120372fd..f5b934563 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,7 +4,8 @@
 
 - Optimize `GetAccount` implementation to serve vault assets from `AccountStateForest` ([#1981](https://github.com/0xMiden/node/pull/1981)).
 - Trace additional RPC request properties e.g. `account.id` in `GetAccount` ([#1983](https://github.com/0xMiden/node/pull/1983)).
-- Added `accept`, `origin`, `user-agent`, `forwarded`, `x-forwarded-for` and `x-real-ip` headers to telemetry for gRPC requests ([#1982](https://github.com/0xMiden/node/pull/1982)).
+- Added `accept`, `origin`, `user-agent`, `forwarded`, `x-forwarded-for` and `x-real-ip` headers to telemetry for gRPC requests ([#1982](https://github.com/0xMiden/node/pull/1982).
+- Fixed occasional mempool panic during transaction submission, causing the lock to be held for longer than expected ([#1984](https://github.com/0xMiden/node/pull/1984)).
 
 ## v0.14.9 (2026-04-21)
 
diff --git a/crates/block-producer/src/mempool/mod.rs b/crates/block-producer/src/mempool/mod.rs
index 734cb9204..9395a4111 100644
--- a/crates/block-producer/src/mempool/mod.rs
+++ b/crates/block-producer/src/mempool/mod.rs
@@ -174,7 +174,7 @@ pub struct Mempool {
     /// committed it is appended here, and the oldest block's state is pruned.
     committed_blocks: VecDeque<SelectedBlock>,
 
-    chain_tip: BlockNumber,
+    committed_chain_tip: BlockNumber,
 
     config: MempoolConfig,
     subscription: subscription::SubscriptionProvider,
@@ -192,7 +192,7 @@ impl Mempool {
     fn new(chain_tip: BlockNumber, config: MempoolConfig) -> Mempool {
         Self {
             config,
-            chain_tip,
+            committed_chain_tip: chain_tip,
             subscription: SubscriptionProvider::new(chain_tip),
             transactions: graph::TransactionGraph::default(),
             batches: graph::BatchGraph::default(),
@@ -203,9 +203,11 @@ impl Mempool {
 
     /// Returns the current chain tip height as seen by the mempool.
     ///
-    /// This reflects the latest committed block that the block producer is aware of.
+    /// This includes the block currently being built, if any.
     pub fn chain_tip(&self) -> BlockNumber {
-        self.chain_tip
+        self.pending_block
+            .as_ref()
+            .map_or(self.committed_chain_tip, |pending| pending.block_number)
     }
 
     // TRANSACTION & BATCH LIFECYCLE
@@ -246,7 +248,7 @@ impl Mempool {
         self.subscription.transaction_added(&tx);
         self.inject_telemetry();
 
-        Ok(self.chain_tip)
+        Ok(self.committed_chain_tip)
     }
 
     #[instrument(target = COMPONENT, name = "mempool.add_user_batch", skip_all)]
@@ -283,7 +285,7 @@ impl Mempool {
         }
         self.inject_telemetry();
 
-        Ok(self.chain_tip)
+        Ok(self.committed_chain_tip)
     }
 
     /// Returns a set of transactions for the next batch.
@@ -364,7 +366,7 @@ impl Mempool {
             self.pending_block.as_ref().unwrap().block_number
         );
 
-        let block_number = self.chain_tip.child();
+        let block_number = self.chain_tip().child();
         let batches = self.batches.select_block(self.config.block_budget);
         let block = SelectedBlock { block_number, batches };
         self.pending_block = Some(block.clone());
@@ -389,7 +391,7 @@ impl Mempool {
     /// Panics if there is no matching block in flight.
     #[instrument(target = COMPONENT, name = "mempool.commit_block", skip_all)]
     pub fn commit_block(&mut self, block_header: BlockHeader) {
-        assert_eq!(self.chain_tip.child(), block_header.block_num());
+        assert_eq!(self.committed_chain_tip.child(), block_header.block_num());
         let block = self
             .pending_block
             .take_if(|pending| pending.block_number == block_header.block_num())
@@ -402,7 +404,7 @@ impl Mempool {
             .map(miden_protocol::transaction::TransactionHeader::id)
             .collect();
 
-        self.chain_tip = self.chain_tip.child();
+        self.committed_chain_tip = self.committed_chain_tip.child();
         self.subscription.block_committed(block_header, tx_ids);
 
         self.committed_blocks.push_back(block);
@@ -542,18 +544,18 @@ impl Mempool {
     /// Transactions from batches are requeued. Expired transactions and their descendants are then
     /// reverted as well.
     fn revert_expired(&mut self) -> HashSet<TransactionId> {
-        let batches = self.batches.revert_expired(self.chain_tip);
+        let batches = self.batches.revert_expired(self.chain_tip());
         for batch in batches {
             self.transactions.requeue_transactions(&batch);
         }
-        self.transactions.revert_expired(self.chain_tip)
+        self.transactions.revert_expired(self.chain_tip())
     }
 
     /// Rejects authentication heights that fall outside the overlap guaranteed by the locally
     /// retained state.
     ///
-    /// The acceptable window is `[chain_tip - state_retention + 1, chain_tip]`; values below this
-    /// range are rejected as stale because the mempool no longer tracks the intermediate history.
+    /// If our oldest local block is at `N`, then we allow `N-1` and newer since this means we're
+    /// covering the full blockchain.
     ///
     /// # Panics
     ///
@@ -565,9 +567,11 @@ impl Mempool {
         authentication_height: BlockNumber,
     ) -> Result<(), MempoolSubmissionError> {
         let limit = self
-            .chain_tip
-            .checked_sub(self.committed_blocks.len() as u32)
-            .expect("number of committed blocks cannot exceed the chain tip");
+            .committed_blocks
+            .front()
+            .map_or(self.chain_tip(), |block| block.block_number)
+            .parent()
+            .unwrap_or_default();
 
         if authentication_height < limit {
             return Err(MempoolSubmissionError::StaleInputs {
@@ -577,16 +581,16 @@ impl Mempool {
         }
 
         assert!(
-            authentication_height <= self.chain_tip,
+            authentication_height <= self.chain_tip(),
             "Authentication height {authentication_height} exceeded the chain tip {}",
-            self.chain_tip
+            self.chain_tip()
         );
 
         Ok(())
     }
 
     fn expiration_check(&self, expired_at: BlockNumber) -> Result<(), MempoolSubmissionError> {
-        let limit = self.chain_tip + self.config.expiration_slack;
+        let limit = self.chain_tip() + self.config.expiration_slack;
         if expired_at <= limit {
             return Err(MempoolSubmissionError::Expired { expired_at, limit });
         }
diff --git a/crates/block-producer/src/mempool/tests.rs b/crates/block-producer/src/mempool/tests.rs
index 6a6e15f97..946891207 100644
--- a/crates/block-producer/src/mempool/tests.rs
+++ b/crates/block-producer/src/mempool/tests.rs
@@ -131,31 +131,37 @@ fn failed_batch_transactions_are_requeued() {
 fn block_commit_reverts_expired_txns() {
     let (mut uut, _) = Mempool::for_tests();
     uut.config.expiration_slack = 0;
+    let mut reference = uut.clone();
 
     let tx_to_commit = MockProvenTxBuilder::with_account_index(0).build();
     let tx_to_commit = Arc::new(AuthenticatedTransaction::from_inner(tx_to_commit));
 
-    // Force the tx into a pending block.
+    // Force the tx into the next block by batching it.
     uut.add_transaction(tx_to_commit.clone()).unwrap();
     uut.select_batch().unwrap();
     uut.commit_batch(Arc::new(ProvenBatch::mocked_from_transactions([
         tx_to_commit.raw_proven_transaction()
     ])));
-    let block = uut.select_block();
-    // A reverted transaction behaves as if it never existed, the current state is the expected
-    // outcome, plus an extra committed block at the end.
-    let mut reference = uut.clone();
 
-    // Add a new transaction which will expire when the pending block is committed.
+    // Add a new transaction which will expire when the block is committed.
     let tx_to_revert = MockProvenTxBuilder::with_account_index(1)
-        .expiration_block_num(block.block_number)
+        .expiration_block_num(uut.chain_tip().child())
         .build();
     let tx_to_revert = Arc::new(AuthenticatedTransaction::from_inner(tx_to_revert));
     uut.add_transaction(tx_to_revert).unwrap();
 
-    // Commit the pending block which should revert the above tx.
+    // Create and commit the block which should revert the above tx.
+    let block = uut.select_block();
     let arb_header = BlockHeader::mock(block.block_number, None, None, &[], Word::empty());
     uut.commit_block(arb_header.clone());
+
+    // A reverted transaction behaves as if it never existed.
+    reference.add_transaction(tx_to_commit.clone()).unwrap();
+    reference.select_batch().unwrap();
+    reference.commit_batch(Arc::new(ProvenBatch::mocked_from_transactions([
+        tx_to_commit.raw_proven_transaction()
+    ])));
+    reference.select_block();
     reference.commit_block(arb_header);
 
     assert_eq!(uut, reference);
diff --git a/crates/block-producer/src/mempool/tests/add_transaction.rs b/crates/block-producer/src/mempool/tests/add_transaction.rs
index dc73f317d..6abe59657 100644
--- a/crates/block-producer/src/mempool/tests/add_transaction.rs
+++ b/crates/block-producer/src/mempool/tests/add_transaction.rs
@@ -79,12 +79,13 @@ mod tx_expiration {
     #[test]
     fn expiration_after_slack_limit_is_accepted() {
         let mut uut = setup();
-        let limit = uut.chain_tip + uut.config.expiration_slack;
+        let limit = uut.chain_tip() + uut.config.expiration_slack;
 
         let tx = MockProvenTxBuilder::with_account_index(0)
             .expiration_block_num(limit.child())
             .build();
-        let tx = AuthenticatedTransaction::from_inner(tx).with_authentication_height(uut.chain_tip);
+        let tx =
+            AuthenticatedTransaction::from_inner(tx).with_authentication_height(uut.chain_tip());
         let tx = Arc::new(tx);
         uut.add_transaction(tx).unwrap();
     }
@@ -92,14 +93,14 @@ mod tx_expiration {
     #[test]
     fn expiration_within_slack_limit_is_rejected() {
         let mut uut = setup();
-        let limit = uut.chain_tip + uut.config.expiration_slack;
+        let limit = uut.chain_tip() + uut.config.expiration_slack;
 
-        for i in uut.chain_tip.child().as_u32()..=limit.as_u32() {
+        for i in uut.chain_tip().child().as_u32()..=limit.as_u32() {
             let tx = MockProvenTxBuilder::with_account_index(0)
                 .expiration_block_num(i.into())
                 .build();
-            let tx =
-                AuthenticatedTransaction::from_inner(tx).with_authentication_height(uut.chain_tip);
+            let tx = AuthenticatedTransaction::from_inner(tx)
+                .with_authentication_height(uut.chain_tip());
             let tx = Arc::new(tx);
             let result = uut.add_transaction(tx);
 
@@ -115,9 +116,10 @@ mod tx_expiration {
     fn already_expired_is_rejected() {
         let mut uut = setup();
         let tx = MockProvenTxBuilder::with_account_index(0)
-            .expiration_block_num(uut.chain_tip)
+            .expiration_block_num(uut.chain_tip())
             .build();
-        let tx = AuthenticatedTransaction::from_inner(tx).with_authentication_height(uut.chain_tip);
+        let tx =
+            AuthenticatedTransaction::from_inner(tx).with_authentication_height(uut.chain_tip());
         let tx = Arc::new(tx);
         let result = uut.add_transaction(tx);
 
@@ -154,11 +156,11 @@ mod authentication_height {
     fn stale_inputs_are_rejected() {
         let mut uut = setup();
 
-        let oldest_local = uut.chain_tip.as_u32() - uut.config.state_retention.get() as u32 + 1;
+        let oldest_mempool = uut.committed_blocks.front().map(|block| block.block_number).unwrap();
 
         let tx = MockProvenTxBuilder::with_account_index(0).build();
         let tx = AuthenticatedTransaction::from_inner(tx)
-            .with_authentication_height((oldest_local - 2).into());
+            .with_authentication_height((oldest_mempool.as_u32() - 2).into());
         let tx = Arc::new(tx);
         uut.add_transaction(tx).unwrap_err();
     }
@@ -173,7 +175,7 @@ mod authentication_height {
 
         let tx = MockProvenTxBuilder::with_account_index(0).build();
         let tx = AuthenticatedTransaction::from_inner(tx)
-            .with_authentication_height(uut.chain_tip.child());
+            .with_authentication_height(uut.chain_tip().child());
         let tx = Arc::new(tx);
         let _ = uut.add_transaction(tx);
     }
@@ -186,9 +188,9 @@ mod authentication_height {
     fn inputs_from_within_overlap_are_accepted() {
         let mut uut = setup();
 
-        let oldest_local = uut.chain_tip.as_u32() - uut.config.state_retention.get() as u32 + 1;
+        let oldest_local = uut.chain_tip().as_u32() - uut.config.state_retention.get() as u32 + 1;
 
-        for i in oldest_local - 1..=uut.chain_tip.as_u32() {
+        for i in oldest_local - 1..=uut.chain_tip().as_u32() {
             let tx = MockProvenTxBuilder::with_account_index(i).build();
             let tx = AuthenticatedTransaction::from_inner(tx).with_authentication_height(i.into());
             let tx = Arc::new(tx);
@@ -199,7 +201,7 @@ mod authentication_height {
                 result,
                 Ok(..),
                 "Failed run with authentication height {i}, chain tip {} and oldest local {oldest_local}",
-                uut.chain_tip
+                uut.chain_tip()
             );
         }
     }