diff --git a/README.md b/README.md
index 24bf52e..d5c9dd6 100644
--- a/README.md
+++ b/README.md
@@ -218,9 +218,25 @@ $browser->get($uri)->then(function (ResponseInterface $response) {
 ```
 
 Similarly, you can use a negative timeout value to not apply a timeout at all
-or use a `null` value to restore the default handling. Note that the underlying
-connection may still impose a different timeout value. See also
-[`Browser`](#browser) above and [`withOptions()`](#withoptions) for more details.
+or use a `null` value to restore the default handling.
+See also [`withOptions()`](#withoptions) for more details.
+
+If you're using a [streaming response body](#streaming), the time it takes to
+receive the response body stream will not be included in the timeout. This
+allows you to keep this incoming stream open for a longer time, such as when
+downloading a very large stream or when streaming data over a long-lived
+connection.
+
+If you're using a [streaming request body](#streaming), the time it takes to
+send the request body stream will not be included in the timeout. This allows
+you to keep this outgoing stream open for a longer time, such as when uploading
+a very large stream.
+
+Note that this timeout handling applies to the higher-level HTTP layer. Lower
+layers such as socket and DNS may also apply (different) timeout values. In
+particular, the underlying socket connection uses the same `default_socket_timeout`
+setting to establish the underlying transport connection. To control this
+connection timeout behavior, you can [inject a custom `Connector`](#browser).
 
 #### Authentication
 
diff --git a/tests/Io/TransactionTest.php b/tests/Io/TransactionTest.php
index c3f6885..59b796b 100644
--- a/tests/Io/TransactionTest.php
+++ b/tests/Io/TransactionTest.php
@@ -619,6 +619,30 @@ public function testCancelTransactionWillCancelRequest()
         $promise->cancel();
     }
 
+    public function testCancelTransactionWillCancelTimeoutTimer()
+    {
+        $messageFactory = new MessageFactory();
+
+        $timer = $this->getMockBuilder('React\EventLoop\TimerInterface')->getMock();
+        $loop = $this->getMockBuilder('React\EventLoop\LoopInterface')->getMock();
+        $loop->expects($this->once())->method('addTimer')->willReturn($timer);
+        $loop->expects($this->once())->method('cancelTimer')->with($timer);
+
+        $request = $messageFactory->request('GET', 'http://example.com');
+        $sender = $this->makeSenderMock();
+
+        $pending = new \React\Promise\Promise(function () { }, function () { throw new \RuntimeException(); });
+
+        // mock sender to return pending promise which should be cancelled when cancelling result
+        $sender->expects($this->once())->method('send')->willReturn($pending);
+
+        $transaction = new Transaction($sender, $messageFactory, $loop);
+        $transaction = $transaction->withOptions(array('timeout' => 2));
+        $promise = $transaction->send($request);
+
+        $promise->cancel();
+    }
+
     public function testCancelTransactionWillCancelRedirectedRequest()
     {
         $messageFactory = new MessageFactory();