diff --git a/libs/remote_storage/src/azure_blob.rs b/libs/remote_storage/src/azure_blob.rs
index 1c0d43d479..ae0a94295c 100644
--- a/libs/remote_storage/src/azure_blob.rs
+++ b/libs/remote_storage/src/azure_blob.rs
@@ -24,6 +24,7 @@ use azure_storage_blobs::{blob::operations::GetBlobBuilder, prelude::ContainerCl
 use bytes::Bytes;
 use futures::future::Either;
 use futures::stream::Stream;
+use futures::FutureExt;
 use futures_util::StreamExt;
 use futures_util::TryStreamExt;
 use http_types::{StatusCode, Url};
@@ -31,6 +32,7 @@ use scopeguard::ScopeGuard;
 use tokio_util::sync::CancellationToken;
 use tracing::debug;
 use utils::backoff;
+use utils::backoff::exponential_backoff_duration_seconds;
 
 use crate::metrics::{start_measuring_requests, AttemptOutcome, RequestKind};
 use crate::{
@@ -302,40 +304,59 @@ impl RemoteStorage for AzureBlobStorage {
 
             let mut next_marker = None;
 
+            let mut timeout_try_cnt = 1;
+
             'outer: loop {
                 let mut builder = builder.clone();
                 if let Some(marker) = next_marker.clone() {
                     builder = builder.marker(marker);
                 }
-                let response = builder.into_stream();
-                let response = response.into_stream().map_err(to_download_error);
-                let response = tokio_stream::StreamExt::timeout(response, self.timeout);
-                let response = response.map(|res| match res {
-                    Ok(res) => res,
-                    Err(_elapsed) => Err(DownloadError::Timeout),
+                // Azure Blob Rust SDK does not expose the list blob API directly. Users have to use
+                // their pageable iterator wrapper that returns all keys as a stream. We want to have
+                // full control of paging, and therefore we only take the first item from the stream.
+                let mut response_stream = builder.into_stream();
+                let response = response_stream.next();
+                // Timeout mechanism: Azure client will sometimes stuck on a request, but retrying that request
+                // would immediately succeed. Therefore, we use exponential backoff timeout to retry the request.
+                // (Usually, exponential backoff is used to determine the sleep time between two retries.) We
+                // start with 10.0 second timeout, and double the timeout for each failure, up to 5 failures.
+                // timeout = min(5 * (1.0+1.0)^n, self.timeout).
+                let this_timeout = (5.0 * exponential_backoff_duration_seconds(timeout_try_cnt, 1.0, self.timeout.as_secs_f64())).min(self.timeout.as_secs_f64());
+                let response = tokio::time::timeout(Duration::from_secs_f64(this_timeout), response);
+                let response = response.map(|res| {
+                    match res {
+                        Ok(Some(Ok(res))) => Ok(Some(res)),
+                        Ok(Some(Err(e)))  => Err(to_download_error(e)),
+                        Ok(None) => Ok(None),
+                        Err(_elasped) => Err(DownloadError::Timeout),
+                    }
                 });
-
-                let mut response = std::pin::pin!(response);
-
                 let mut max_keys = max_keys.map(|mk| mk.get());
                 let next_item = tokio::select! {
-                    op = response.next() => Ok(op),
+                    op = response => op,
                     _ = cancel.cancelled() => Err(DownloadError::Cancelled),
-                }?;
+                };
+
+                if let Err(DownloadError::Timeout) = &next_item {
+                    timeout_try_cnt += 1;
+                    if timeout_try_cnt <= 5 {
+                        continue;
+                    }
+                }
+
+                let next_item = next_item?;
+
+                if timeout_try_cnt >= 2 {
+                    tracing::warn!("Azure Blob Storage list timed out and succeeded after {} tries", timeout_try_cnt);
+                }
+                timeout_try_cnt = 1;
+
                 let Some(entry) = next_item else {
                     // The list is complete, so yield it.
                     break;
                 };
 
                 let mut res = Listing::default();
-                let entry = match entry {
-                    Ok(entry) => entry,
-                    Err(e) => {
-                        // The error is potentially retryable, so we must rewind the loop after yielding.
-                        yield Err(e);
-                        continue;
-                    }
-                };
                 next_marker = entry.continuation();
                 let prefix_iter = entry
                     .blobs
@@ -351,7 +372,7 @@ impl RemoteStorage for AzureBlobStorage {
                         last_modified: k.properties.last_modified.into(),
                         size: k.properties.content_length,
                     }
-                    );
+                );
 
                 for key in blob_iter {
                     res.keys.push(key);