diff --git a/spanner/read.go b/spanner/read.go
index 2752b0ec93e0..eefd44b4843a 100644
--- a/spanner/read.go
+++ b/spanner/read.go
@@ -64,6 +64,9 @@ func stream(
 		rpc,
 		nil,
 		nil,
+		func(err error) error {
+			return err
+		},
 		setTimestamp,
 		release,
 	)
@@ -79,6 +82,7 @@ func streamWithReplaceSessionFunc(
 	rpc func(ct context.Context, resumeToken []byte) (streamingReceiver, error),
 	replaceSession func(ctx context.Context) error,
 	setTransactionID func(transactionID),
+	updateTxState func(err error) error,
 	setTimestamp func(time.Time),
 	release func(error),
 ) *RowIterator {
@@ -89,6 +93,7 @@ func streamWithReplaceSessionFunc(
 		streamd:            newResumableStreamDecoder(ctx, logger, rpc, replaceSession),
 		rowd:               &partialResultSetDecoder{},
 		setTransactionID:   setTransactionID,
+		updateTxState:      updateTxState,
 		setTimestamp:       setTimestamp,
 		release:            release,
 		cancel:             cancel,
@@ -127,6 +132,7 @@ type RowIterator struct {
 	streamd            *resumableStreamDecoder
 	rowd               *partialResultSetDecoder
 	setTransactionID   func(transactionID)
+	updateTxState      func(err error) error
 	setTimestamp       func(time.Time)
 	release            func(error)
 	cancel             func()
@@ -214,7 +220,7 @@ func (r *RowIterator) Next() (*Row, error) {
 		return row, nil
 	}
 	if err := r.streamd.lastErr(); err != nil {
-		r.err = ToSpannerError(err)
+		r.err = r.updateTxState(ToSpannerError(err))
 	} else if !r.rowd.done() {
 		r.err = errEarlyReadEnd()
 	} else {
diff --git a/spanner/transaction.go b/spanner/transaction.go
index 9e3e107d1065..a33d03628685 100644
--- a/spanner/transaction.go
+++ b/spanner/transaction.go
@@ -18,6 +18,7 @@ package spanner
 
 import (
 	"context"
+	"fmt"
 	"sync"
 	"sync/atomic"
 	"time"
@@ -63,6 +64,12 @@ type txReadOnly struct {
 	// operations.
 	txReadEnv
 
+	// updateTxStateFunc is a function that updates the state of the current
+	// transaction based on the given error. This function is by default a no-op,
+	// but is overridden for read/write transactions to set the state to txAborted
+	// if Spanner aborts the transaction.
+	updateTxStateFunc func(err error) error
+
 	// Atomic. Only needed for DML statements, but used forall.
 	sequenceNumber int64
 
@@ -98,6 +105,13 @@ type txReadOnly struct {
 	otConfig *openTelemetryConfig
 }
 
+func (t *txReadOnly) updateTxState(err error) error {
+	if t.updateTxStateFunc == nil {
+		return err
+	}
+	return t.updateTxStateFunc(err)
+}
+
 // TransactionOptions provides options for a transaction.
 type TransactionOptions struct {
 	CommitOptions CommitOptions
@@ -323,7 +337,7 @@ func (t *txReadOnly) ReadWithOptions(ctx context.Context, table string, keys Key
 					t.setTransactionID(nil)
 					return client, errInlineBeginTransactionFailed()
 				}
-				return client, err
+				return client, t.updateTxState(err)
 			}
 			md, err := client.Header()
 			if getGFELatencyMetricsFlag() && md != nil && t.ct != nil {
@@ -338,6 +352,9 @@ func (t *txReadOnly) ReadWithOptions(ctx context.Context, table string, keys Key
 		},
 		t.replaceSessionFunc,
 		setTransactionID,
+		func(err error) error {
+			return t.updateTxState(err)
+		},
 		t.setTimestamp,
 		t.release,
 	)
@@ -607,7 +624,7 @@ func (t *txReadOnly) query(ctx context.Context, statement Statement, options Que
 					t.setTransactionID(nil)
 					return client, errInlineBeginTransactionFailed()
 				}
-				return client, err
+				return client, t.updateTxState(err)
 			}
 			md, err := client.Header()
 			if getGFELatencyMetricsFlag() && md != nil && t.ct != nil {
@@ -622,6 +639,9 @@ func (t *txReadOnly) query(ctx context.Context, statement Statement, options Que
 		},
 		t.replaceSessionFunc,
 		setTransactionID,
+		func(err error) error {
+			return t.updateTxState(err)
+		},
 		t.setTimestamp,
 		t.release)
 }
@@ -673,6 +693,8 @@ const (
 	txActive
 	// transaction is closed, cannot be used anymore.
 	txClosed
+	// transaction was aborted by Spanner and should be retried.
+	txAborted
 )
 
 // errRtsUnavailable returns error for read transaction's read timestamp being
@@ -1216,7 +1238,7 @@ func (t *ReadWriteTransaction) update(ctx context.Context, stmt Statement, opts
 			t.setTransactionID(nil)
 			return 0, errInlineBeginTransactionFailed()
 		}
-		return 0, ToSpannerError(err)
+		return 0, t.txReadOnly.updateTxState(ToSpannerError(err))
 	}
 	if hasInlineBeginTransaction {
 		if resultSet != nil && resultSet.GetMetadata() != nil && resultSet.GetMetadata().GetTransaction() != nil &&
@@ -1325,7 +1347,7 @@ func (t *ReadWriteTransaction) batchUpdateWithOptions(ctx context.Context, stmts
 			t.setTransactionID(nil)
 			return nil, errInlineBeginTransactionFailed()
 		}
-		return nil, ToSpannerError(err)
+		return nil, t.txReadOnly.updateTxState(ToSpannerError(err))
 	}
 
 	haveTransactionID := false
@@ -1348,7 +1370,7 @@ func (t *ReadWriteTransaction) batchUpdateWithOptions(ctx context.Context, stmts
 		return counts, errInlineBeginTransactionFailed()
 	}
 	if resp.Status != nil && resp.Status.Code != 0 {
-		return counts, spannerErrorf(codes.Code(uint32(resp.Status.Code)), resp.Status.Message)
+		return counts, t.txReadOnly.updateTxState(spannerErrorf(codes.Code(uint32(resp.Status.Code)), resp.Status.Message))
 	}
 	return counts, nil
 }
@@ -1666,7 +1688,7 @@ func (t *ReadWriteTransaction) commit(ctx context.Context, options CommitOptions
 		trace.TracePrintf(ctx, nil, "Error in recording GFE Latency through OpenTelemetry. Error: %v", metricErr)
 	}
 	if e != nil {
-		return resp, toSpannerErrorWithCommitInfo(e, true)
+		return resp, t.txReadOnly.updateTxState(toSpannerErrorWithCommitInfo(e, true))
 	}
 	if tstamp := res.GetCommitTimestamp(); tstamp != nil {
 		resp.CommitTs = time.Unix(tstamp.Seconds, int64(tstamp.Nanos))
@@ -1758,6 +1780,7 @@ type ReadWriteStmtBasedTransaction struct {
 	// ReadWriteTransaction contains methods for performing transactional reads.
 	ReadWriteTransaction
 
+	client  *Client
 	options TransactionOptions
 }
 
@@ -1783,23 +1806,35 @@ func NewReadWriteStmtBasedTransaction(ctx context.Context, c *Client) (*ReadWrit
 // used by the transaction will not be returned to the pool and cause a session
 // leak.
 //
+// ResetForRetry resets the transaction before a retry attempt. This function
+// returns a new transaction that should be used for the retry attempt. The
+// transaction that is returned by this function is assigned a higher priority
+// than the previous transaction, making it less probable to be aborted by
+// Spanner again during the retry.
+//
 // NewReadWriteStmtBasedTransactionWithOptions is a configurable version of
 // NewReadWriteStmtBasedTransaction.
 func NewReadWriteStmtBasedTransactionWithOptions(ctx context.Context, c *Client, options TransactionOptions) (*ReadWriteStmtBasedTransaction, error) {
+	return newReadWriteStmtBasedTransactionWithSessionHandle(ctx, c, options, nil)
+}
+
+func newReadWriteStmtBasedTransactionWithSessionHandle(ctx context.Context, c *Client, options TransactionOptions, sh *sessionHandle) (*ReadWriteStmtBasedTransaction, error) {
 	var (
-		sh  *sessionHandle
 		err error
 		t   *ReadWriteStmtBasedTransaction
 	)
-	sh, err = c.idleSessions.take(ctx)
-	if err != nil {
-		// If session retrieval fails, just fail the transaction.
-		return nil, err
+	if sh == nil {
+		sh, err = c.idleSessions.take(ctx)
+		if err != nil {
+			// If session retrieval fails, just fail the transaction.
+			return nil, err
+		}
 	}
 	t = &ReadWriteStmtBasedTransaction{
 		ReadWriteTransaction: ReadWriteTransaction{
 			txReadyOrClosed: make(chan struct{}),
 		},
+		client: c,
 	}
 	t.txReadOnly.sp = c.idleSessions
 	t.txReadOnly.sh = sh
@@ -1807,6 +1842,15 @@ func NewReadWriteStmtBasedTransactionWithOptions(ctx context.Context, c *Client,
 	t.txReadOnly.qo = c.qo
 	t.txReadOnly.ro = c.ro
 	t.txReadOnly.disableRouteToLeader = c.disableRouteToLeader
+	t.txReadOnly.updateTxStateFunc = func(err error) error {
+		if ErrCode(err) == codes.Aborted {
+			t.mu.Lock()
+			t.state = txAborted
+			t.mu.Unlock()
+		}
+		return err
+	}
+
 	t.txOpts = c.txo.merge(options)
 	t.ct = c.ct
 	t.otConfig = c.otConfig
@@ -1838,6 +1882,7 @@ func (t *ReadWriteStmtBasedTransaction) CommitWithReturnResp(ctx context.Context
 	}
 	if t.sh != nil {
 		t.sh.recycle()
+		t.sh = nil
 	}
 	return resp, err
 }
@@ -1848,7 +1893,22 @@ func (t *ReadWriteStmtBasedTransaction) Rollback(ctx context.Context) {
 	t.rollback(ctx)
 	if t.sh != nil {
 		t.sh.recycle()
+		t.sh = nil
+	}
+}
+
+// ResetForRetry resets the transaction before a retry. This should be
+// called if the transaction was aborted by Spanner and the application
+// wants to retry the transaction.
+// It is recommended to use this method above creating a new transaction,
+// as this method will give the transaction a higher priority and thus a
+// smaller probability of being aborted again by Spanner.
+func (t *ReadWriteStmtBasedTransaction) ResetForRetry(ctx context.Context) (*ReadWriteStmtBasedTransaction, error) {
+	if t.state != txAborted {
+		return nil, fmt.Errorf("ResetForRetry should only be called on an active transaction that was aborted by Spanner")
 	}
+	// Create a new transaction that re-uses the current session if it is available.
+	return newReadWriteStmtBasedTransactionWithSessionHandle(ctx, t.client, t.options, t.sh)
 }
 
 // writeOnlyTransaction provides the most efficient way of doing write-only
diff --git a/spanner/transaction_test.go b/spanner/transaction_test.go
index 983b9902f0b9..930c9c18142e 100644
--- a/spanner/transaction_test.go
+++ b/spanner/transaction_test.go
@@ -470,8 +470,103 @@ func TestReadWriteStmtBasedTransaction_CommitAborted(t *testing.T) {
 	}
 }
 
+func TestReadWriteStmtBasedTransaction_QueryAborted(t *testing.T) {
+	t.Parallel()
+	rowCount, attempts, err := testReadWriteStmtBasedTransaction(t, map[string]SimulatedExecutionTime{
+		MethodExecuteStreamingSql: {Errors: []error{status.Error(codes.Aborted, "Transaction aborted")}},
+	})
+	if err != nil {
+		t.Fatalf("transaction failed to commit: %v", err)
+	}
+	if rowCount != SelectSingerIDAlbumIDAlbumTitleFromAlbumsRowCount {
+		t.Fatalf("Row count mismatch, got %v, expected %v", rowCount, SelectSingerIDAlbumIDAlbumTitleFromAlbumsRowCount)
+	}
+	if g, w := attempts, 2; g != w {
+		t.Fatalf("number of attempts mismatch:\nGot%d\nWant:%d", g, w)
+	}
+}
+
+func TestReadWriteStmtBasedTransaction_UpdateAborted(t *testing.T) {
+	t.Parallel()
+	server, client, teardown := setupMockedTestServerWithConfig(t, ClientConfig{
+		SessionPoolConfig: SessionPoolConfig{
+			// Use a session pool with size 1 to ensure that there are no session leaks.
+			MinOpened: 1,
+			MaxOpened: 1,
+		},
+	})
+	defer teardown()
+	server.TestSpanner.PutExecutionTime(
+		MethodExecuteSql,
+		SimulatedExecutionTime{Errors: []error{status.Error(codes.Aborted, "Transaction aborted")}})
+
+	ctx := context.Background()
+	tx, err := NewReadWriteStmtBasedTransaction(ctx, client)
+	if err != nil {
+		t.Fatal(err)
+	}
+	_, err = tx.Update(ctx, Statement{SQL: UpdateBarSetFoo})
+	if g, w := ErrCode(err), codes.Aborted; g != w {
+		t.Fatalf("error code mismatch\n Got: %v\nWant: %v", g, w)
+	}
+	tx, err = tx.ResetForRetry(ctx)
+	if err != nil {
+		t.Fatal(err)
+	}
+	c, err := tx.Update(ctx, Statement{SQL: UpdateBarSetFoo})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if g, w := c, int64(UpdateBarSetFooRowCount); g != w {
+		t.Fatalf("update count mismatch\n Got: %v\nWant: %v", g, w)
+	}
+}
+
+func TestReadWriteStmtBasedTransaction_BatchUpdateAborted(t *testing.T) {
+	t.Parallel()
+	server, client, teardown := setupMockedTestServerWithConfig(t, ClientConfig{
+		SessionPoolConfig: SessionPoolConfig{
+			// Use a session pool with size 1 to ensure that there are no session leaks.
+			MinOpened: 1,
+			MaxOpened: 1,
+		},
+	})
+	defer teardown()
+	server.TestSpanner.PutExecutionTime(
+		MethodExecuteBatchDml,
+		SimulatedExecutionTime{Errors: []error{status.Error(codes.Aborted, "Transaction aborted")}})
+
+	ctx := context.Background()
+	tx, err := NewReadWriteStmtBasedTransaction(ctx, client)
+	if err != nil {
+		t.Fatal(err)
+	}
+	_, err = tx.BatchUpdate(ctx, []Statement{{SQL: UpdateBarSetFoo}})
+	if g, w := ErrCode(err), codes.Aborted; g != w {
+		t.Fatalf("error code mismatch\n Got: %v\nWant: %v", g, w)
+	}
+	tx, err = tx.ResetForRetry(ctx)
+	if err != nil {
+		t.Fatal(err)
+	}
+	c, err := tx.BatchUpdate(ctx, []Statement{{SQL: UpdateBarSetFoo}})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if g, w := c, []int64{UpdateBarSetFooRowCount}; !reflect.DeepEqual(g, w) {
+		t.Fatalf("update count mismatch\n Got: %v\nWant: %v", g, w)
+	}
+}
+
 func testReadWriteStmtBasedTransaction(t *testing.T, executionTimes map[string]SimulatedExecutionTime) (rowCount int64, attempts int, err error) {
-	server, client, teardown := setupMockedTestServer(t)
+	// server, client, teardown := setupMockedTestServer(t)
+	server, client, teardown := setupMockedTestServerWithConfig(t, ClientConfig{
+		SessionPoolConfig: SessionPoolConfig{
+			// Use a session pool with size 1 to ensure that there are no session leaks.
+			MinOpened: 1,
+			MaxOpened: 1,
+		},
+	})
 	defer teardown()
 	for method, exec := range executionTimes {
 		server.TestSpanner.PutExecutionTime(method, exec)
@@ -500,9 +595,14 @@ func testReadWriteStmtBasedTransaction(t *testing.T, executionTimes map[string]S
 		return rowCount, nil
 	}
 
+	var tx *ReadWriteStmtBasedTransaction
 	for {
 		attempts++
-		tx, err := NewReadWriteStmtBasedTransaction(ctx, client)
+		if attempts > 1 {
+			tx, err = tx.ResetForRetry(ctx)
+		} else {
+			tx, err = NewReadWriteStmtBasedTransaction(ctx, client)
+		}
 		if err != nil {
 			return 0, attempts, fmt.Errorf("failed to begin a transaction: %v", err)
 		}