diff --git a/.changeset/blue-dots-jump.md b/.changeset/blue-dots-jump.md
new file mode 100644
index 00000000..fc5107f1
--- /dev/null
+++ b/.changeset/blue-dots-jump.md
@@ -0,0 +1,5 @@
+---
+'@livekit/rtc-node': patch
+---
+
+Release reader lock on stream completion and clear receivedChunks to prevent memory leak
diff --git a/packages/livekit-rtc/src/data_streams/stream_reader.ts b/packages/livekit-rtc/src/data_streams/stream_reader.ts
index 5bfff94f..7067d69d 100644
--- a/packages/livekit-rtc/src/data_streams/stream_reader.ts
+++ b/packages/livekit-rtc/src/data_streams/stream_reader.ts
@@ -53,12 +53,18 @@ export class ByteStreamReader extends BaseStreamReader<ByteStreamInfo> {
         try {
           const { done, value } = await reader.read();
           if (done) {
+            // Release the lock when the stream is exhausted so the
+            // underlying ReadableStream can be garbage-collected.
+            reader.releaseLock();
             return { done: true, value: undefined as unknown };
           } else {
             this.handleChunkReceived(value);
             return { done: false, value: value.content! };
           }
         } catch (error: unknown) {
+          // Release the lock on error so it doesn't stay held when the
+          // consumer never calls return() (e.g. breaking out of for-await).
+          reader.releaseLock();
           log.error('error processing stream update: %s', error);
           return { done: true, value: undefined as unknown };
         }
@@ -121,12 +127,18 @@ export class TextStreamReader extends BaseStreamReader<TextStreamInfo> {
   [Symbol.asyncIterator]() {
     const reader = this.reader.getReader();
     const decoder = new TextDecoder();
+    const receivedChunks = this.receivedChunks;
 
     return {
       next: async (): Promise<IteratorResult<string>> => {
         try {
           const { done, value } = await reader.read();
           if (done) {
+            // Release the lock when the stream is exhausted so the
+            // underlying ReadableStream can be garbage-collected.
+            reader.releaseLock();
+            // Clear received chunks so the buffered data can be GC'd.
+            receivedChunks.clear();
             return { done: true, value: undefined };
           } else {
             this.handleChunkReceived(value);
@@ -136,6 +148,10 @@ export class TextStreamReader extends BaseStreamReader<TextStreamInfo> {
             };
           }
         } catch (error: unknown) {
+          // Release the lock on error so it doesn't stay held when the
+          // consumer never calls return() (e.g. breaking out of for-await).
+          reader.releaseLock();
+          receivedChunks.clear();
           log.error('error processing stream update: %s', error);
           return { done: true, value: undefined };
         }
@@ -143,6 +159,8 @@ export class TextStreamReader extends BaseStreamReader<TextStreamInfo> {
 
       return(): IteratorResult<string> {
         reader.releaseLock();
+        // Clear received chunks so the buffered data can be GC'd.
+        receivedChunks.clear();
         return { done: true, value: undefined };
       },
     };