diff --git a/src/stream-tcp-reassemble.c b/src/stream-tcp-reassemble.c
index ffe473093d..baf07c3c64 100644
--- a/src/stream-tcp-reassemble.c
+++ b/src/stream-tcp-reassemble.c
@@ -1689,19 +1689,9 @@ static void StreamTcpSetupMsg(TcpSession *ssn, TcpStream *stream, Packet *p,
     if ((!StreamTcpInlineMode() && p->flowflags & FLOW_PKT_TOSERVER) ||
         ( StreamTcpInlineMode() && p->flowflags & FLOW_PKT_TOCLIENT))
     {
-        COPY_ADDRESS(&p->flow->src,&smsg->data.src_ip);
-        COPY_ADDRESS(&p->flow->dst,&smsg->data.dst_ip);
-        COPY_PORT(p->flow->sp,smsg->data.src_port);
-        COPY_PORT(p->flow->dp,smsg->data.dst_port);
-
         smsg->flags |= STREAM_TOCLIENT;
         SCLogDebug("stream mesage is to_client");
     } else {
-        COPY_ADDRESS(&p->flow->dst,&smsg->data.src_ip);
-        COPY_ADDRESS(&p->flow->src,&smsg->data.dst_ip);
-        COPY_PORT(p->flow->dp,smsg->data.src_port);
-        COPY_PORT(p->flow->sp,smsg->data.dst_port);
-
         smsg->flags |= STREAM_TOSERVER;
         SCLogDebug("stream mesage is to_server");
     }
@@ -1737,26 +1727,28 @@ static int StreamTcpReassembleRawCheckLimit(TcpSession *ssn, TcpStream *stream,
     /* check if we have enough data to send to L7 */
     if (p->flowflags & FLOW_PKT_TOCLIENT) {
         SCLogDebug("StreamMsgQueueGetMinChunkLen(STREAM_TOSERVER) %"PRIu32,
-                StreamMsgQueueGetMinChunkLen(STREAM_TOSERVER));
+                StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOSERVER));
 
-        if (StreamMsgQueueGetMinChunkLen(STREAM_TOSERVER) >
+        if (StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOSERVER) >
                 (stream->last_ack - stream->ra_raw_base_seq)) {
             SCLogDebug("toserver min chunk len not yet reached: "
-                    "last_ack %"PRIu32", ra_raw_base_seq %"PRIu32", len "
+                    "last_ack %"PRIu32", ra_raw_base_seq %"PRIu32", %"PRIu32" < "
                     "%"PRIu32"", stream->last_ack, stream->ra_raw_base_seq,
-                    StreamMsgQueueGetMinChunkLen(STREAM_TOSERVER));
+                    (stream->last_ack - stream->ra_raw_base_seq),
+                    StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOSERVER));
             SCReturnInt(0);
         }
     } else {
         SCLogDebug("StreamMsgQueueGetMinChunkLen(STREAM_TOCLIENT) %"PRIu32,
-                StreamMsgQueueGetMinChunkLen(STREAM_TOCLIENT));
+                StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOCLIENT));
 
-        if (StreamMsgQueueGetMinChunkLen(STREAM_TOCLIENT) >
+        if (StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOCLIENT) >
                 (stream->last_ack - stream->ra_raw_base_seq)) {
             SCLogDebug("toclient min chunk len not yet reached: "
-                    "last_ack %"PRIu32", ra_base_seq %"PRIu32", len "
+                    "last_ack %"PRIu32", ra_base_seq %"PRIu32",  %"PRIu32" < "
                     "%"PRIu32"", stream->last_ack, stream->ra_raw_base_seq,
-                    StreamMsgQueueGetMinChunkLen(STREAM_TOCLIENT));
+                    (stream->last_ack - stream->ra_raw_base_seq),
+                    StreamMsgQueueGetMinChunkLen(FLOW_PKT_TOCLIENT));
             SCReturnInt(0);
         }
     }
@@ -2595,8 +2587,7 @@ static int StreamTcpReassembleAppLayer (TcpReassemblyThreadCtx *ra_ctx,
      * and state is beyond established, we send an empty msg */
     TcpSegment *seg_tail = stream->seg_list_tail;
     if (seg_tail == NULL ||
-            (seg_tail->flags & SEGMENTTCP_FLAG_RAW_PROCESSED &&
-             seg_tail->flags & SEGMENTTCP_FLAG_APPLAYER_PROCESSED))
+            (seg_tail->flags & SEGMENTTCP_FLAG_APPLAYER_PROCESSED))
     {
         /* send an empty EOF msg if we have no segments but TCP state
          * is beyond ESTABLISHED */
@@ -6056,10 +6047,6 @@ static int StreamTcpReassembleTest38 (void) {
     ThreadVars tv;
     memset(&tv, 0, sizeof (ThreadVars));
 
-    /* prevent L7 from kicking in */
-    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER, 0);
-    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOCLIENT, 0);
-
     FLOW_INITIALIZE(&f);
     StreamTcpInitConfig(TRUE);
     TcpReassemblyThreadCtx *ra_ctx = StreamTcpReassembleInitThreadCtx();
@@ -6110,13 +6097,13 @@ static int StreamTcpReassembleTest38 (void) {
     s = &ssn.server;
 
     if (StreamTcpReassembleHandleSegment(&tv, ra_ctx, &ssn, s, p, &pq) == -1) {
-        printf("failed in segments reassembly, while processing toserver packet\n");
+        printf("failed in segments reassembly, while processing toserver packet (1): ");
         goto end;
     }
 
     /* Check if we have stream smsgs in queue */
     if (ra_ctx->stream_q->len > 0) {
-        printf("there shouldn't be any stream smsgs in the queue\n");
+        printf("there shouldn't be any stream smsgs in the queue (2): ");
         goto end;
     }
 
@@ -6128,14 +6115,14 @@ static int StreamTcpReassembleTest38 (void) {
     s = &ssn.client;
 
     if (StreamTcpReassembleHandleSegment(&tv, ra_ctx, &ssn, s, p, &pq) == -1) {
-        printf("failed in segments reassembly, while processing toserver packet\n");
+        printf("failed in segments reassembly, while processing toserver packet (3): ");
         goto end;
     }
 
     /* Check if we have stream smsgs in queue */
     if (ra_ctx->stream_q->len > 0) {
         printf("there shouldn't be any stream smsgs in the queue, as we didn't"
-                " processed any smsg from toserver side till yet\n");
+                " processed any smsg from toserver side till yet (4): ");
         goto end;
     }
 
@@ -6146,17 +6133,13 @@ static int StreamTcpReassembleTest38 (void) {
     tcph.th_ack = htonl(53);
     s = &ssn.server;
     if (StreamTcpReassembleHandleSegment(&tv, ra_ctx, &ssn, s, p, &pq) == -1) {
-        printf("failed in segments reassembly, while processing toserver packet\n");
+        printf("failed in segments reassembly, while processing toserver packet (5): ");
         goto end;
     }
 
     /* Check if we have stream smsgs in queue */
-    if (ra_ctx->stream_q->len == 0) {
-        printf("there should be a stream smsgs in the queue\n");
-        goto end;
-    /* Process stream smsgs we may have in queue */
-    } else if (StreamTcpReassembleProcessAppLayer(ra_ctx) < 0) {
-        printf("failed in processing stream smsgs\n");
+    if (ra_ctx->stream_q->len != 0) {
+        printf("there should be no stream smsgs in the queue (6): ");
         goto end;
     }
 
@@ -6167,7 +6150,7 @@ static int StreamTcpReassembleTest38 (void) {
     tcph.th_ack = htonl(100);
     s = &ssn.client;
     if (StreamTcpReassembleHandleSegment(&tv, ra_ctx, &ssn, s, p, &pq) == -1) {
-        printf("failed in segments reassembly, while processing toserver packet\n");
+        printf("failed in segments reassembly, while processing toserver packet (8): ");
         goto end;
     }
 
@@ -6179,22 +6162,10 @@ static int StreamTcpReassembleTest38 (void) {
     s = &ssn.server;
 
     if (StreamTcpReassembleHandleSegment(&tv, ra_ctx, &ssn, s, p, &pq) == -1) {
-        printf("failed in segments reassembly, while processing toserver packet\n");
-        goto end;
-    }
-#if 0
-    /* Check if we have stream smsgs in queue */
-    if (ra_ctx->stream_q->len == 0) {
-        printf("there should be a stream smsgs in the queue, as we have detected"
-                " the app layer protocol and one smsg from toserver side has "
-                "been sent\n");
-        goto end;
-    /* Process stream smsgs we may have in queue */
-    } else if (StreamTcpReassembleProcessAppLayer(ra_ctx) < 0) {
-        printf("failed in processing stream smsgs\n");
+        printf("failed in segments reassembly, while processing toserver packet (9): ");
         goto end;
     }
-#endif
+
     ret = 1;
 end:
     StreamTcpReassembleFreeThreadCtx(ra_ctx);
@@ -6316,9 +6287,8 @@ static int StreamTcpReassembleTest39 (void) {
     }
 
     /* Check if we have stream smsgs in queue */
-    if (ra_ctx->stream_q->len > 0) {
-        printf("there shouldn't be any stream smsgs in the queue, as we didn't"
-                " processed any smsg from toserver side till yet (4): ");
+    if (ra_ctx->stream_q->len == 0) {
+        printf("there should be stream smsgs in the queue (4): ");
         goto end;
     }
     SCLogDebug("check client seg list %p", ssn.client.seg_list);
@@ -6469,6 +6439,8 @@ static int StreamTcpReassembleTest40 (void) {
 
     FLOW_INITIALIZE(&f);
     StreamTcpInitConfig(TRUE);
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER, 130);
+
     TcpReassemblyThreadCtx *ra_ctx = StreamTcpReassembleInitThreadCtx();
     AppLayerDetectProtoThreadInit();
 
@@ -6753,8 +6725,8 @@ static int StreamTcpReassembleTest41 (void) {
     uint8_t httpbuf2[] = "HTTP/1.0 200 OK\r\nServer: VictorServer/1.0\r\n\r\n";
     uint32_t httplen2 = sizeof(httpbuf2) - 1; /* minus the \0 */
 
-    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER, 0);
-    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOCLIENT, 0);
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOCLIENT, 100);
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER, 500);
 
     ssn.server.ra_raw_base_seq = ssn.server.ra_app_base_seq = 9;
     ssn.server.isn = 9;
@@ -6830,9 +6802,13 @@ static int StreamTcpReassembleTest41 (void) {
     }
 
     /* Check if we have stream smsgs in queue */
-    if (ra_ctx->stream_q->len > 0) {
-        printf("there shouldn't be any stream smsgs in the queue, as we didn't"
-                " processed any smsg from toserver side till yet: ");
+    if (ra_ctx->stream_q->len == 0) {
+        printf("there should be stream smsgs in the queue: ");
+        goto end;
+    }
+
+    if (StreamTcpReassembleProcessAppLayer(ra_ctx) < 0) {
+        printf("failed in processing stream smsgs: ");
         goto end;
     }
 
@@ -6940,6 +6916,9 @@ static int StreamTcpReassembleTest42 (void) {
     uint8_t httpbuf2[] = "HTTP/1.0 200 OK\r\nServer: VictorServer/1.0\r\n\r\n";
     uint32_t httplen2 = sizeof(httpbuf2) - 1; /* minus the \0 */
 
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOCLIENT, 50);
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER, 50);
+
     ssn.server.ra_raw_base_seq = ssn.server.ra_app_base_seq = 9;
     ssn.server.isn = 9;
     ssn.server.last_ack = 60;
@@ -6989,6 +6968,9 @@ static int StreamTcpReassembleTest42 (void) {
         goto end;
     }
 
+    /* pause the reassembling */
+    StreamTcpReassemblePause(&ssn, 1);
+
     p->flowflags = FLOW_PKT_TOSERVER;
     p->payload = httpbuf1;
     p->payload_len = httplen1;
@@ -7002,14 +6984,15 @@ static int StreamTcpReassembleTest42 (void) {
     }
 
     /* Check if we have stream smsgs in queue */
-    if (ra_ctx->stream_q->len > 0) {
-        printf("there shouldn't be any stream smsgs in the queue, as we didn't"
-                " processed any smsg from toserver side till yet (4): ");
+    if (ra_ctx->stream_q->len == 0) {
+        printf("there should be stream smsgs in the queue (4): ");
         goto end;
     }
 
-    /* pause the reassembling */
-    StreamTcpReassemblePause(&ssn, 1);
+    if (StreamTcpReassembleProcessAppLayer(ra_ctx) < 0) {
+        printf("failed in processing stream smsgs: ");
+        goto end;
+    }
 
     p->flowflags = FLOW_PKT_TOCLIENT;
     p->payload = httpbuf2;
diff --git a/src/stream-tcp.c b/src/stream-tcp.c
index 5fc4f6bc2f..9fd48bbee2 100644
--- a/src/stream-tcp.c
+++ b/src/stream-tcp.c
@@ -66,6 +66,8 @@
 #define STREAMTCP_DEFAULT_MEMCAP                32 * 1024 * 1024 /* 32mb */
 #define STREAMTCP_DEFAULT_REASSEMBLY_MEMCAP     64 * 1024 * 1024 /* 64mb */
 #define STREAMTCP_DEFAULT_REASSEMBLY_WINDOW     3000
+#define STREAMTCP_DEFAULT_TOSERVER_CHUNK_SIZE   2560
+#define STREAMTCP_DEFAULT_TOCLIENT_CHUNK_SIZE   2560
 
 #define STREAMTCP_NEW_TIMEOUT                   60
 #define STREAMTCP_EST_TIMEOUT                   3600
@@ -421,6 +423,31 @@ void StreamTcpInitConfig(char quiet)
         SCLogInfo("stream.\"inline\": %s", stream_inline ? "enabled" : "disabled");
     }
 
+    if ((ConfGetInt("stream.reassembly.toserver_chunk_size", &value)) == 1) {
+        stream_config.reassembly_toserver_chunk_size = (uint16_t)value;
+    } else {
+        stream_config.reassembly_toserver_chunk_size =
+            STREAMTCP_DEFAULT_TOSERVER_CHUNK_SIZE;
+    }
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOSERVER,
+            stream_config.reassembly_toserver_chunk_size);
+
+    if ((ConfGetInt("stream.reassembly.toclient_chunk_size", &value)) == 1) {
+        stream_config.reassembly_toclient_chunk_size = (uint16_t)value;
+    } else {
+        stream_config.reassembly_toclient_chunk_size =
+            STREAMTCP_DEFAULT_TOCLIENT_CHUNK_SIZE;
+    }
+    StreamMsgQueueSetMinChunkLen(FLOW_PKT_TOCLIENT,
+            stream_config.reassembly_toclient_chunk_size);
+
+    if (!quiet) {
+        SCLogInfo("stream.reassembly \"toserver_chunk_size\": %"PRIu16,
+            stream_config.reassembly_toserver_chunk_size);
+        SCLogInfo("stream.reassembly \"toclient_chunk_size\": %"PRIu16,
+            stream_config.reassembly_toclient_chunk_size);
+    }
+
     /** \todo yaml part */
     stream_config.reassembly_inline_window = STREAMTCP_DEFAULT_REASSEMBLY_WINDOW;
 
@@ -1181,13 +1208,11 @@ static int StreamTcpPacketStateSynSent(ThreadVars *tv, Packet *p,
                         StreamTcpPacketSetState(p, ssn, TCP_CLOSED);
                         SCLogDebug("ssn %p: Reset received and state changed to "
                                 "TCP_CLOSED", ssn);
-                        StreamTcpSessionPktFree(p);
                     }
                 } else {
                     StreamTcpPacketSetState(p, ssn, TCP_CLOSED);
                     SCLogDebug("ssn %p: Reset received and state changed to "
                             "TCP_CLOSED", ssn);
-                    StreamTcpSessionPktFree(p);
                 }
             } else
                 return -1;
@@ -1499,8 +1524,6 @@ static int StreamTcpPacketStateSynRecv(ThreadVars *tv, Packet *p,
                     if (ssn->flags & STREAMTCP_FLAG_TIMESTAMP) {
                         StreamTcpHandleTimestamp(ssn, p);
                     }
-
-                    StreamTcpSessionPktFree(p);
                 }
             } else
                 return -1;
@@ -2366,7 +2389,13 @@ static int StreamTcpPacketStateFinWait1(ThreadVars *tv, Packet *p,
                     StreamTcpHandleTimestamp(ssn, p);
                 }
 
-                StreamTcpSessionPktFree(p);
+                if (PKT_IS_TOSERVER(p)) {
+                    StreamTcpReassembleHandleSegment(tv, stt->ra_ctx, ssn,
+                            &ssn->client, p, pq);
+                } else {
+                    StreamTcpReassembleHandleSegment(tv, stt->ra_ctx, ssn,
+                            &ssn->server, p, pq);
+                }
             }
             else
                 return -1;
@@ -2512,7 +2541,13 @@ static int StreamTcpPacketStateFinWait2(ThreadVars *tv, Packet *p,
                     StreamTcpHandleTimestamp(ssn, p);
                 }
 
-                StreamTcpSessionPktFree(p);
+                if (PKT_IS_TOSERVER(p)) {
+                    StreamTcpReassembleHandleSegment(tv, stt->ra_ctx, ssn,
+                            &ssn->client, p, pq);
+                } else {
+                    StreamTcpReassembleHandleSegment(tv, stt->ra_ctx, ssn,
+                            &ssn->server, p, pq);
+                }
             }
             else
                 return -1;
@@ -3030,8 +3065,6 @@ static int StreamTcpPakcetStateLastAck(ThreadVars *tv, Packet *p,
                 SCLogDebug("ssn %p: =+ next SEQ %" PRIu32 ", last ACK "
                            "%" PRIu32 "", ssn, ssn->client.next_seq,
                            ssn->server.last_ack);
-
-                StreamTcpSessionPktFree(p);
             }
             break;
         default:
@@ -3108,8 +3141,6 @@ static int StreamTcpPacketStateTimeWait(ThreadVars *tv, Packet *p,
                 SCLogDebug("ssn %p: =+ next SEQ %" PRIu32 ", last ACK "
                            "%" PRIu32 "", ssn, ssn->client.next_seq,
                            ssn->server.last_ack);
-
-                StreamTcpSessionPktFree(p);
             } else {
                 SCLogDebug("ssn %p: pkt (%" PRIu32 ") is to client: SEQ "
                            "%" PRIu32 ", ACK %" PRIu32 "", ssn, p->payload_len,
@@ -3150,8 +3181,6 @@ static int StreamTcpPacketStateTimeWait(ThreadVars *tv, Packet *p,
                 SCLogDebug("ssn %p: =+ next SEQ %" PRIu32 ", last ACK "
                            "%" PRIu32 "", ssn, ssn->server.next_seq,
                            ssn->client.last_ack);
-
-                StreamTcpSessionPktFree(p);
             }
             break;
         default:
@@ -3302,8 +3331,6 @@ static int StreamTcpPacket (ThreadVars *tv, Packet *p, StreamTcpThread *stt,
                         &ssn->server, np, NULL);
             }
 
-            StreamTcpSessionPktFree(np);
-
             /* enqueue this packet so we inspect it in detect etc */
             PacketEnqueue(pq, np);
         }
diff --git a/src/stream-tcp.h b/src/stream-tcp.h
index 8e723fd492..47b18a0d1a 100644
--- a/src/stream-tcp.h
+++ b/src/stream-tcp.h
@@ -54,6 +54,9 @@ typedef struct TcpStreamCnf_ {
     uint32_t reassembly_memcap; /**< max memory usage for stream reassembly */
     uint32_t reassembly_depth;  /**< Depth until when we reassemble the stream */
 
+    uint16_t reassembly_toserver_chunk_size;
+    uint16_t reassembly_toclient_chunk_size;
+
     /** reassembly -- inline mode
      *
      *  sliding window size for raw stream reassembly
diff --git a/src/stream.c b/src/stream.c
index 89e63a1389..bee05e96ab 100644
--- a/src/stream.c
+++ b/src/stream.c
@@ -20,7 +20,7 @@
  *
  * \author Victor Julien <victor@inliniac.net>
  *
- * Stream Handling API
+ * Stream Chunk Handling API
  */
 
 #include "suricata-common.h"
diff --git a/src/stream.h b/src/stream.h
index 543e5937fd..401fb53f13 100644
--- a/src/stream.h
+++ b/src/stream.h
@@ -36,17 +36,17 @@
 #define MSG_DATA_SIZE       4024 /* 4096 - 72 (size of rest of the struct) */
 
 typedef struct StreamMsg_ {
-    uint32_t id;    /**< unique stream id */
     uint8_t flags;  /**< msg flags */
     Flow *flow;     /**< parent flow */
 
+    struct StreamMsg_ *next;
+    struct StreamMsg_ *prev;
+
     union {
         /* case !STREAM_EOF && !STREAM_GAP */
         struct {
-            Address src_ip, dst_ip;     /**< ipaddresses */
-            Port src_port, dst_port;    /**< ports */
             uint8_t data[MSG_DATA_SIZE];/**< reassembled data */
-            uint16_t data_len;          /**< length of the data */
+            uint32_t data_len;          /**< length of the data */
             uint32_t seq;               /**< sequence number */
         } data;
         /* case STREAM_GAP */
@@ -55,8 +55,6 @@ typedef struct StreamMsg_ {
         } gap;
     };
 
-    struct StreamMsg_ *next;
-    struct StreamMsg_ *prev;
 } StreamMsg;
 
 typedef struct StreamMsgQueue_ {
diff --git a/suricata.yaml b/suricata.yaml
index 681e79c81a..9348d841c6 100644
--- a/suricata.yaml
+++ b/suricata.yaml
@@ -427,6 +427,10 @@ flow-timeouts:
 #   reassembly:
 #     memcap: 67108864          # 64mb tcp reassembly memcap
 #     depth: 1048576            # 1 MB reassembly depth
+#     toserver_chunk_size: 2560 # inspect raw stream in chunks of at least
+#                               # this size
+#     toclient_chunk_size: 2560 # inspect raw stream in chunks of at least
+#                               # this size
 stream:
   memcap: 33554432              # 32mb
   checksum_validation: yes      # reject wrong csums
@@ -434,6 +438,8 @@ stream:
   reassembly:
     memcap: 67108864            # 64mb for reassembly
     depth: 1048576              # reassemble 1mb into a stream
+    toserver_chunk_size: 2560
+    toclient_chunk_size: 2560
 
 # Logging configuration.  This is not about logging IDS alerts, but
 # IDS output about what its doing, errors, etc.