diff --git a/sys/dev/xen/bus/xen_intr.c b/sys/dev/xen/bus/xen_intr.c
--- a/sys/dev/xen/bus/xen_intr.c
+++ b/sys/dev/xen/bus/xen_intr.c
@@ -341,7 +341,7 @@
 /**
  * Interrupt handler for processing all Xen event channel events.
  * 
- * \param trap_frame  The trap frame context for the current interrupt.
+ * \param unused
  */
 int
 xen_intr_handle_upcall(void *unused __unused)
@@ -354,6 +354,15 @@
 	struct xen_intr_pcpu_data *pc;
 	u_long l1, l2;
 
+	/*
+	 * The upcall handler is an interrupt handler itself (that calls other
+	 * interrupt handlers), hence the caller has the responsibility to
+	 * increase td_intr_nesting_level ahead of dispatching the upcall
+	 * handler.
+	 */
+	KASSERT(curthread->td_intr_nesting_level > 0,
+	        ("Unexpected thread context"));
+
 	/* We must remain on the same vCPU during this function */
 	CRITICAL_ASSERT(curthread);
 
@@ -417,7 +426,17 @@
 				("Received unexpected event on vCPU#%u, event bound to vCPU#%u",
 				PCPU_GET(cpuid), isrc->xi_cpu));
 
+			/*
+			 * Reduce interrupt nesting level ahead of calling the
+			 * per-arch interrupt dispatch helper.  This is
+			 * required because the per-arch dispatcher will also
+			 * increase td_intr_nesting_level, and then handlers
+			 * would wrongly see td_intr_nesting_level = 2 when
+			 * there's no nesting at all.
+			 */
+			curthread->td_intr_nesting_level--;
 			xen_arch_intr_execute_handlers(isrc, trap_frame);
+			curthread->td_intr_nesting_level++;
 
 			/*
 			 * If this is the final port processed,