diff --git a/pkg/ingester/transfer.go b/pkg/ingester/transfer.go
index 9aa3e384a6..ac30baf5df 100644
--- a/pkg/ingester/transfer.go
+++ b/pkg/ingester/transfer.go
@@ -221,36 +221,39 @@ func (i *Ingester) transferOut(ctx context.Context) error {
 
 	for instanceID, inst := range i.instances {
 		for _, istream := range inst.streams {
-			chunks := make([]*logproto.Chunk, 0, len(istream.chunks))
+			lbls := []*logproto.LabelPair{}
+			for _, lbl := range istream.labels {
+				lbls = append(lbls, &logproto.LabelPair{Name: lbl.Name, Value: lbl.Value})
+			}
 
+			// We moved to sending one chunk at a time in a stream instead of sending all chunks for a stream
+			// as large chunks can create large payloads of >16MB which can hit GRPC limits,
+			// typically streams won't have many chunks in memory so sending one at a time
+			// shouldn't add too much overhead.
 			for _, c := range istream.chunks {
 				bb, err := c.chunk.Bytes()
 				if err != nil {
 					return err
 				}
 
-				chunks = append(chunks, &logproto.Chunk{
+				chunks := make([]*logproto.Chunk, 1, 1)
+				chunks[0] = &logproto.Chunk{
 					Data: bb,
-				})
-			}
+				}
 
-			lbls := []*logproto.LabelPair{}
-			for _, lbl := range istream.labels {
-				lbls = append(lbls, &logproto.LabelPair{Name: lbl.Name, Value: lbl.Value})
-			}
+				err = stream.Send(&logproto.TimeSeriesChunk{
+					Chunks:         chunks,
+					UserId:         instanceID,
+					Labels:         lbls,
+					FromIngesterId: i.lifecycler.ID,
+				})
+				if err != nil {
+					level.Error(logger).Log("msg", "failed sending stream's chunks to ingester", "to_ingester", targetIngester.Addr, "err", err)
+					return err
+				}
 
-			err := stream.Send(&logproto.TimeSeriesChunk{
-				Chunks:         chunks,
-				UserId:         instanceID,
-				Labels:         lbls,
-				FromIngesterId: i.lifecycler.ID,
-			})
-			if err != nil {
-				level.Error(logger).Log("msg", "failed sending stream's chunks to ingester", "to_ingester", targetIngester.Addr, "err", err)
-				return err
+				sentChunks.Add(float64(len(chunks)))
 			}
-
-			sentChunks.Add(float64(len(chunks)))
 		}
 	}
 
diff --git a/pkg/ingester/transfer_test.go b/pkg/ingester/transfer_test.go
index 9b81495bca..76e567b3a2 100644
--- a/pkg/ingester/transfer_test.go
+++ b/pkg/ingester/transfer_test.go
@@ -20,6 +20,7 @@ import (
 	"golang.org/x/net/context"
 	"google.golang.org/grpc"
 
+	"github.com/grafana/loki/pkg/chunkenc"
 	"github.com/grafana/loki/pkg/ingester/client"
 	"github.com/grafana/loki/pkg/logproto"
 	"github.com/grafana/loki/pkg/logql"
@@ -62,8 +63,9 @@ func TestTransferOut(t *testing.T) {
 		Streams: []logproto.Stream{
 			{
 				Entries: []logproto.Entry{
-					{Line: "out of order line", Timestamp: time.Unix(0, 0)},
 					{Line: "line 4", Timestamp: time.Unix(2, 0)},
+					{Line: "ooo", Timestamp: time.Unix(0, 0)},
+					{Line: "line 5", Timestamp: time.Unix(3, 0)},
 				},
 				Labels: `{foo="bar",bar="baz1"}`,
 			},
@@ -72,7 +74,7 @@ func TestTransferOut(t *testing.T) {
 
 	require.Error(t, err2)
 	require.Contains(t, err2.Error(), "out of order")
-	require.Contains(t, err2.Error(), "total ignored: 1 out of 2")
+	require.Contains(t, err2.Error(), "total ignored: 1 out of 3")
 
 	// Create a new ingester and transfer data to it
 	ing2 := f.getIngester(time.Second*60, t)
@@ -108,7 +110,7 @@ func TestTransferOut(t *testing.T) {
 
 		assert.Equal(
 			t,
-			[]string{"line 0", "line 1", "line 2", "line 3", "line 4"},
+			[]string{"line 0", "line 1", "line 2", "line 3", "line 4", "line 5"},
 			lines,
 		)
 	}
@@ -141,6 +143,11 @@ func (f *testIngesterFactory) getIngester(joinAfter time.Duration, t *testing.T)
 	cfg.LifecyclerConfig.RingConfig.KVStore.Mock = f.store
 	cfg.LifecyclerConfig.JoinAfter = joinAfter
 	cfg.LifecyclerConfig.Addr = cfg.LifecyclerConfig.ID
+	// Force a tiny chunk size and no encoding so we can guarantee multiple chunks
+	// These values are also crafted around the specific use of `line _` in the log line which is 6 bytes long
+	cfg.BlockSize = 3 // Block size needs to be less than chunk size so we can get more than one block per chunk
+	cfg.TargetChunkSize = 24
+	cfg.ChunkEncoding = chunkenc.EncNone.String()
 
 	cfg.ingesterClientFactory = func(cfg client.Config, addr string) (client.HealthAndIngesterClient, error) {
 		ingester, ok := f.ingesters[addr]