diff --git a/NEWS b/NEWS
index 60c7d4b3..0037c3bb 100644
--- a/NEWS
+++ b/NEWS
@@ -8,6 +8,7 @@ What's new in psycopg 2.4.1
   - Correctly detect an empty query sent to the backend (ticket #46).
   - Fixed a SystemError clobbering libpq errors raised without SQLSTATE.
     Bug vivisectioned by Eric Snow.
+  - Fixed interaction between NamedTuple and server-side cursors.
   - Allow to specify --static-libpq on setup.py command line instead of
     just in 'setup.cfg'. Patch provided by Matthew Ryan (ticket #48).
 
diff --git a/lib/extras.py b/lib/extras.py
index dcbd65ed..1a4b730f 100644
--- a/lib/extras.py
+++ b/lib/extras.py
@@ -304,7 +304,14 @@ class NamedTupleCursor(_cursor):
         return [nt(*t) for t in ts]
 
     def __iter__(self):
-        return iter(self.fetchall())
+        # Invoking _cursor.__iter__(self) goes to infinite recursion,
+        # so we do pagination by hand
+        while 1:
+            recs = self.fetchmany(self.itersize)
+            if not recs:
+                return
+            for rec in recs:
+                yield rec
 
     try:
         from collections import namedtuple
diff --git a/tests/extras_dictcursor.py b/tests/extras_dictcursor.py
index a92968b1..494eca88 100755
--- a/tests/extras_dictcursor.py
+++ b/tests/extras_dictcursor.py
@@ -14,9 +14,11 @@
 # FITNESS FOR A PARTICULAR PURPOSE.  See the GNU Lesser General Public
 # License for more details.
 
+import time
+from datetime import timedelta
 import psycopg2
 import psycopg2.extras
-from testutils import unittest, skip_if_no_namedtuple
+from testutils import unittest, skip_before_postgres, skip_if_no_namedtuple
 from testconfig import dsn
 
 
@@ -293,6 +295,21 @@ class NamedTupleCursorTest(unittest.TestCase):
         recs = curs.fetchall()
         self.assertEqual(recs[0].i, 42)
 
+    @skip_if_no_namedtuple
+    @skip_before_postgres(8, 0)
+    def test_not_greedy(self):
+        curs = self.conn.cursor('tmp')
+        curs.itersize = 2
+        curs.execute("""select clock_timestamp() as ts from generate_series(1,3)""")
+        recs = []
+        for t in curs:
+            time.sleep(0.01)
+            recs.append(t)
+
+        # check that the dataset was not fetched in a single gulp
+        self.assert_(recs[1].ts - recs[0].ts < timedelta(seconds=0.005))
+        self.assert_(recs[2].ts - recs[1].ts > timedelta(seconds=0.0099))
+
 
 def test_suite():
     return unittest.TestLoader().loadTestsFromName(__name__)