diff --git a/crates/core/src/host/scheduler.rs b/crates/core/src/host/scheduler.rs
index 295574606e2..8dba5287aca 100644
--- a/crates/core/src/host/scheduler.rs
+++ b/crates/core/src/host/scheduler.rs
@@ -63,6 +63,14 @@ enum SchedulerMessage {
         function_name: String,
         args: FunctionArgs,
     },
+    /// Re-enqueue an interval procedure after its spawned run finished. The spawned task
+    /// can't touch the actor's queue, so it sends the reschedule back through this message.
+    Reschedule {
+        id: ScheduledFunctionId,
+        function_name: Arc<str>,
+        at: Timestamp,
+        real_at: Instant,
+    },
 }
 
 #[derive(Clone)]
@@ -72,13 +80,15 @@ pub struct Scheduler {
 
 pub struct SchedulerStarter {
     rx: mpsc::UnboundedReceiver<MsgOrExit<SchedulerMessage>>,
+    /// Sender clone for the [`SchedulerActor`], so spawned procedure tasks can reschedule.
+    tx: mpsc::UnboundedSender<MsgOrExit<SchedulerMessage>>,
     db: Arc<RelationalDB>,
 }
 
 impl Scheduler {
     pub fn open(db: Arc<RelationalDB>) -> (Self, SchedulerStarter) {
         let (tx, rx) = mpsc::unbounded_channel();
-        (Scheduler { tx }, SchedulerStarter { rx, db })
+        (Scheduler { tx: tx.clone() }, SchedulerStarter { rx, tx, db })
     }
 }
 
@@ -149,6 +159,7 @@ impl SchedulerStarter {
         tokio::spawn(
             SchedulerActor {
                 rx: self.rx,
+                tx: self.tx,
                 queue,
                 key_map,
                 module_host: module_host.downgrade(),
@@ -271,6 +282,8 @@ impl Scheduler {
 
 struct SchedulerActor {
     rx: mpsc::UnboundedReceiver<MsgOrExit<SchedulerMessage>>,
+    /// Used by spawned procedure tasks to re-enqueue interval reschedules.
+    tx: mpsc::UnboundedSender<MsgOrExit<SchedulerMessage>>,
     queue: DelayQueue<QueueItem>,
     key_map: FxHashMap<ScheduledFunctionId, delay_queue::Key>,
     module_host: WeakModuleHost,
@@ -348,19 +361,7 @@ impl SchedulerActor {
                 effective_at,
                 real_at,
             } => {
-                // Incase of row update, remove the existing entry from queue first
-                if let Some(key) = self.key_map.get(&id) {
-                    self.queue.remove(key);
-                }
-                let key = self.queue.insert_at(
-                    QueueItem::Id {
-                        id,
-                        function_name,
-                        at: effective_at,
-                    },
-                    real_at,
-                );
-                self.key_map.insert(id, key);
+                self.enqueue_scheduled(id, function_name, effective_at, real_at);
             }
             SchedulerMessage::ScheduleImmediate { function_name, args } => {
                 self.queue.insert(
@@ -368,7 +369,38 @@ impl SchedulerActor {
                     Duration::ZERO,
                 );
             }
+            SchedulerMessage::Reschedule {
+                id,
+                function_name,
+                at,
+                real_at,
+            } => {
+                self.enqueue_scheduled(id, function_name, at, real_at);
+            }
+        }
+    }
+
+    /// Insert (or replace) the queued entry for `id`, used by both `Schedule` and `Reschedule`.
+    fn enqueue_scheduled(
+        &mut self,
+        id: ScheduledFunctionId,
+        function_name: Arc<str>,
+        at: Timestamp,
+        real_at: Instant,
+    ) {
+        // Incase of row update, remove the existing entry from queue first
+        if let Some(key) = self.key_map.get(&id) {
+            self.queue.remove(key);
         }
+        let key = self.queue.insert_at(
+            QueueItem::Id {
+                id,
+                function_name,
+                at,
+            },
+            real_at,
+        );
+        self.key_map.insert(id, key);
     }
 
     async fn handle_queued(&mut self, id: Expired<QueueItem>) {
@@ -386,26 +418,65 @@ impl SchedulerActor {
         };
 
         let params = ScheduledFunctionParams(item.clone());
-        let result = match params.kind(module_host.info()) {
+        match params.kind(module_host.info()) {
+            // Procedures can run for a long time (e.g. `sleep_until`) and execute on their own
+            // instance pool, so awaiting them inline here would starve every other due function.
+            // Spawn instead and keep draining the queue; interval reschedules come back via
+            // `SchedulerMessage::Reschedule`. (Scheduled procedures thus run concurrently rather
+            // than one-at-a-time; the datastore's serializable isolation still applies.)
             ScheduledFunctionKind::Procedure => {
-                panic::AssertUnwindSafe(module_host.call_scheduled_procedure(params))
-                    .catch_unwind()
-                    .await
+                let tx = self.tx.clone();
+                tokio::spawn(async move {
+                    // Catch panics so a faulty procedure logs instead of taking down the task.
+                    let result = panic::AssertUnwindSafe(module_host.call_scheduled_procedure(params))
+                        .catch_unwind()
+                        .await;
+                    let result = match result {
+                        Ok(result) => result,
+                        Err(_) => {
+                            log::warn!("scheduled function panicked");
+                            return;
+                        }
+                    };
+                    if let Ok(CallScheduledFunctionResult {
+                        reschedule: Some(Reschedule { at_ts, at_real }),
+                    }) = result
+                    {
+                        if let QueueItem::Id { id, function_name, .. } = item {
+                            let _ = tx.send(MsgOrExit::Msg(SchedulerMessage::Reschedule {
+                                id,
+                                function_name,
+                                at: at_ts,
+                                real_at: at_real,
+                            }));
+                        }
+                    }
+                });
             }
+            // Reducers can't yield and run on the main executor, so await inline to keep order.
             ScheduledFunctionKind::Reducer => {
-                panic::AssertUnwindSafe(module_host.call_scheduled_reducer(params))
+                let result = panic::AssertUnwindSafe(module_host.call_scheduled_reducer(params))
                     .catch_unwind()
-                    .await
-            }
-        };
-        let result = match result {
-            Ok(result) => result,
-            Err(_) => {
-                log::warn!("scheduled function panicked");
-                return;
+                    .await;
+                let result = match result {
+                    Ok(result) => result,
+                    Err(_) => {
+                        log::warn!("scheduled function panicked");
+                        return;
+                    }
+                };
+                self.handle_result(item, result);
             }
-        };
+        }
+    }
 
+    /// Handle the result of an inline (reducer) scheduled call, re-enqueueing it if it
+    /// is an interval schedule.
+    fn handle_result(
+        &mut self,
+        item: QueueItem,
+        result: Result<CallScheduledFunctionResult, CallScheduledFunctionError>,
+    ) {
         match result {
             // If the module already exited, leave the `ScheduledFunction` in
             // the database for when the module restarts.
diff --git a/sdks/rust/tests/procedure-concurrency-client/src/test_handlers.rs b/sdks/rust/tests/procedure-concurrency-client/src/test_handlers.rs
index fa67bc11692..5dcd6357ff4 100644
--- a/sdks/rust/tests/procedure-concurrency-client/src/test_handlers.rs
+++ b/sdks/rust/tests/procedure-concurrency-client/src/test_handlers.rs
@@ -13,8 +13,8 @@ pub async fn dispatch(test: &str, db_name: &str) {
         "procedure-concurrent-with-scheduled-reducer" => {
             exec_procedure_concurrent_with_scheduled_reducer(db_name).await
         }
-        "scheduled-procedure-scheduled-reducer-not-interleaved" => {
-            exec_scheduled_procedure_scheduled_reducer_not_interleaved(db_name).await
+        "scheduled-procedure-scheduled-reducer-interleaves" => {
+            exec_scheduled_procedure_scheduled_reducer_interleaves(db_name).await
         }
         _ => panic!("Unknown test: {test}"),
     }
@@ -468,9 +468,15 @@ async fn exec_procedure_concurrent_with_scheduled_reducer(db_name: &str) {
     test_counter.wait_for_all().await;
 }
 
-/// Like [`exec_procedure_reducer_same_client_not_interleaved`], but with the scheduler instead of a client.
-/// Tracks a behavior that we'd like to change.
-async fn exec_scheduled_procedure_scheduled_reducer_not_interleaved(db_name: &str) {
+/// Like [`exec_procedure_concurrent_with_scheduled_reducer`], but the procedure is itself
+/// scheduled rather than called by a client.
+///
+/// A long-running scheduled procedure (which sleeps between two inserts) must NOT starve a
+/// scheduled reducer whose deadline falls during the procedure's sleep: the reducer should
+/// run in between, giving insertion order `scheduled_procedure_before < scheduled_reducer <
+/// scheduled_procedure_after`. (This used to be serialized — the procedure ran to completion
+/// before the reducer — until the scheduler began dispatching procedures concurrently.)
+async fn exec_scheduled_procedure_scheduled_reducer_interleaves(db_name: &str) {
     let test_counter = TestCounter::new();
     let sub_applied_nothing_result = test_counter.add_test("on_subscription_applied_nothing");
     let mut reducer_callback_result = Some(test_counter.add_test("schedule_procedure_then_reducer_callback"));
@@ -526,8 +532,8 @@ async fn exec_scheduled_procedure_scheduled_reducer_not_interleaved(db_name: &st
                             #[allow(clippy::redundant_closure_call)]
                             (|| {
                                 anyhow::ensure!(
-                                    before < after && after < scheduled_reducer,
-                                    "Expected scheduled procedure insertion order scheduled_procedure_before < scheduled_procedure_after < scheduled_reducer, got {before} < {after} < {scheduled_reducer}"
+                                    before < scheduled_reducer && scheduled_reducer < after,
+                                    "Expected scheduled procedure/reducer to interleave: scheduled_procedure_before < scheduled_reducer < scheduled_procedure_after, got {before} < {scheduled_reducer} < {after}"
                                 );
                                 Ok(())
                             })(),
diff --git a/sdks/rust/tests/test.rs b/sdks/rust/tests/test.rs
index 0714033956f..d2c9d2aa2d1 100644
--- a/sdks/rust/tests/test.rs
+++ b/sdks/rust/tests/test.rs
@@ -544,14 +544,13 @@ mod rust_procedure_concurrency {
         make_test("procedure-concurrent-with-scheduled-reducer").run()
     }
 
-    /// Test that the scheduler has only a single active execution slot,
-    /// which can be occupied by a long-running or suspended procedure.
-    ///
-    /// We're not attached to this behavior, and in fact it should be changed.
-    /// At that time, this test should be altered to demonstrate that the execution is interleaved.
+    /// A long-running scheduled procedure must not starve a scheduled reducer that comes
+    /// due during the procedure's sleep: see issue
+    /// https://github.com/clockworklabs/SpacetimeDB/issues/4954 . The reducer should
+    /// interleave (`before < scheduled_reducer < after`).
     #[test]
-    fn scheduled_procedure_scheduled_reducer_not_interleaved() {
-        make_test("scheduled-procedure-scheduled-reducer-not-interleaved").run()
+    fn scheduled_procedure_scheduled_reducer_interleaves() {
+        make_test("scheduled-procedure-scheduled-reducer-interleaves").run()
     }
 }