diff --git a/lightning-liquidity/src/lsps1/peer_state.rs b/lightning-liquidity/src/lsps1/peer_state.rs
index 6e1889749ae..8f336446822 100644
--- a/lightning-liquidity/src/lsps1/peer_state.rs
+++ b/lightning-liquidity/src/lsps1/peer_state.rs
@@ -397,6 +397,27 @@ impl PeerState {
 		});
 	}
 
+	/// Removes a terminal order from state, allowing the operator to reclaim memory and free
+	/// per-peer quota.
+	///
+	/// Only orders in the `CompletedAndChannelOpened` or `FailedAndRefunded` terminal states
+	/// may be pruned. For `FailedAndRefunded` orders this may be called before the payment
+	/// invoice has expired, allowing the client to create new orders without being blocked by
+	/// DoS protections.
+	pub(super) fn prune_order(&mut self, order_id: &LSPS1OrderId) -> Result<(), PeerStateError> {
+		match self.outbound_channels_by_order_id.get(order_id) {
+			None => return Err(PeerStateError::UnknownOrderId),
+			Some(order) => match order.state {
+				ChannelOrderState::CompletedAndChannelOpened { .. }
+				| ChannelOrderState::FailedAndRefunded { .. } => {},
+				_ => return Err(PeerStateError::OrderNotPrunable),
+			},
+		}
+		self.outbound_channels_by_order_id.remove(order_id);
+		self.needs_persist |= true;
+		Ok(())
+	}
+
 	fn pending_requests_and_unpaid_orders(&self) -> usize {
 		let pending_requests = self.pending_requests.len();
 		// We exclude paid and completed orders.
@@ -428,6 +449,7 @@ pub(super) enum PeerStateError {
 	UnknownOrderId,
 	InvalidStateTransition(ChannelOrderStateError),
 	TooManyPendingRequests,
+	OrderNotPrunable,
 }
 
 impl fmt::Display for PeerStateError {
@@ -438,6 +460,9 @@ impl fmt::Display for PeerStateError {
 			Self::UnknownOrderId => write!(f, "unknown order id"),
 			Self::InvalidStateTransition(e) => write!(f, "{}", e),
 			Self::TooManyPendingRequests => write!(f, "too many pending requests"),
+			Self::OrderNotPrunable => {
+				write!(f, "order is not in a terminal state and cannot be pruned")
+			},
 		}
 	}
 }
@@ -778,4 +803,123 @@ mod tests {
 		// Available in CompletedAndChannelOpened
 		assert_eq!(state.channel_info(), Some(&channel_info));
 	}
+
+	fn create_test_order_params() -> LSPS1OrderParams {
+		LSPS1OrderParams {
+			lsp_balance_sat: 100_000,
+			client_balance_sat: 0,
+			required_channel_confirmations: 0,
+			funding_confirms_within_blocks: 6,
+			channel_expiry_blocks: 144,
+			token: None,
+			announce_channel: false,
+		}
+	}
+
+	#[test]
+	fn test_prune_order_completed() {
+		let mut peer_state = PeerState::default();
+		let order_id = LSPS1OrderId("order1".to_string());
+		let payment_info = create_test_payment_info_bolt11_only();
+		peer_state.new_order(
+			order_id.clone(),
+			create_test_order_params(),
+			LSPSDateTime::from_str("2035-01-01T00:00:00Z").unwrap(),
+			payment_info,
+		);
+
+		peer_state.order_payment_received(&order_id, PaymentMethod::Bolt11).unwrap();
+		peer_state.order_channel_opened(&order_id, create_test_channel_info()).unwrap();
+
+		assert!(peer_state.prune_order(&order_id).is_ok());
+		assert!(peer_state.get_order(&order_id).is_err());
+	}
+
+	#[test]
+	fn test_prune_order_failed_and_refunded() {
+		let mut peer_state = PeerState::default();
+		let order_id = LSPS1OrderId("order2".to_string());
+		// Use a non-expired invoice (expires_at in the future) to verify we bypass expiry check.
+		let payment_info = create_test_payment_info_bolt11_only();
+		peer_state.new_order(
+			order_id.clone(),
+			create_test_order_params(),
+			LSPSDateTime::from_str("2035-01-01T00:00:00Z").unwrap(),
+			payment_info,
+		);
+		peer_state.order_failed_and_refunded(&order_id).unwrap();
+
+		// Must succeed even though the invoice has not expired yet.
+		assert!(peer_state.prune_order(&order_id).is_ok());
+		assert!(peer_state.get_order(&order_id).is_err());
+	}
+
+	#[test]
+	fn test_prune_order_non_terminal_fails() {
+		let mut peer_state = PeerState::default();
+
+		// ExpectingPayment is not prunable.
+		let expecting_id = LSPS1OrderId("expecting".to_string());
+		peer_state.new_order(
+			expecting_id.clone(),
+			create_test_order_params(),
+			LSPSDateTime::from_str("2035-01-01T00:00:00Z").unwrap(),
+			create_test_payment_info_bolt11_only(),
+		);
+		assert!(matches!(
+			peer_state.prune_order(&expecting_id),
+			Err(PeerStateError::OrderNotPrunable)
+		));
+
+		// OrderPaid is not prunable.
+		let paid_id = LSPS1OrderId("paid".to_string());
+		peer_state.new_order(
+			paid_id.clone(),
+			create_test_order_params(),
+			LSPSDateTime::from_str("2035-01-01T00:00:00Z").unwrap(),
+			create_test_payment_info_bolt11_only(),
+		);
+		peer_state.order_payment_received(&paid_id, PaymentMethod::Bolt11).unwrap();
+		assert!(matches!(peer_state.prune_order(&paid_id), Err(PeerStateError::OrderNotPrunable)));
+	}
+
+	#[test]
+	fn test_prune_order_unknown_fails() {
+		let mut peer_state = PeerState::default();
+		let unknown_id = LSPS1OrderId("nonexistent".to_string());
+		assert!(matches!(peer_state.prune_order(&unknown_id), Err(PeerStateError::UnknownOrderId)));
+	}
+
+	#[test]
+	fn test_prune_order_frees_quota() {
+		let mut peer_state = PeerState::default();
+
+		// Fill up to the limit with FailedAndRefunded orders.
+		for i in 0..MAX_PENDING_REQUESTS_PER_PEER {
+			let order_id = LSPS1OrderId(format!("order{}", i));
+			peer_state.new_order(
+				order_id.clone(),
+				create_test_order_params(),
+				LSPSDateTime::from_str("2035-01-01T00:00:00Z").unwrap(),
+				create_test_payment_info_bolt11_only(),
+			);
+			peer_state.order_failed_and_refunded(&order_id).unwrap();
+		}
+
+		// Registering another request must fail: quota is exhausted.
+		let dummy_request = LSPS1Request::GetInfo(Default::default());
+		assert!(matches!(
+			peer_state.register_request(LSPSRequestId("r0".to_string()), dummy_request.clone()),
+			Err(PeerStateError::TooManyPendingRequests)
+		));
+
+		// Prune one FailedAndRefunded order.
+		let first_id = LSPS1OrderId("order0".to_string());
+		peer_state.prune_order(&first_id).unwrap();
+
+		// Now registering a new request must succeed.
+		assert!(peer_state
+			.register_request(LSPSRequestId("r1".to_string()), dummy_request)
+			.is_ok());
+	}
 }
diff --git a/lightning-liquidity/src/lsps1/service.rs b/lightning-liquidity/src/lsps1/service.rs
index 0e139907589..f0468e50788 100644
--- a/lightning-liquidity/src/lsps1/service.rs
+++ b/lightning-liquidity/src/lsps1/service.rs
@@ -752,6 +752,48 @@ where
 		Ok(())
 	}
 
+	/// Prunes a completed order from state, freeing memory and per-peer quota.
+	///
+	/// Only terminal orders ([`LSPS1OrderState::Completed`] /
+	/// [`LSPS1OrderState::Failed`]) may be pruned. For `FailedAndRefunded` orders this may be
+	/// called before the payment invoice has expired, allowing the client to create new orders
+	/// without being blocked by the per-peer request limit.
+	///
+	/// Returns an [`APIError::APIMisuseError`] if the counterparty has no state, the order is
+	/// unknown, or the order is in a non-terminal state.
+	pub async fn prune_order(
+		&self, counterparty_node_id: PublicKey, order_id: LSPS1OrderId,
+	) -> Result<(), APIError> {
+		let mut should_persist = false;
+		match self.per_peer_state.read().unwrap().get(&counterparty_node_id) {
+			Some(inner_state_lock) => {
+				let mut peer_state_lock = inner_state_lock.lock().unwrap();
+				peer_state_lock.prune_order(&order_id).map_err(|e| APIError::APIMisuseError {
+					err: format!("Failed to prune order: {}", e),
+				})?;
+				should_persist |= peer_state_lock.needs_persist();
+			},
+			None => {
+				return Err(APIError::APIMisuseError {
+					err: format!("No existing state with counterparty {}", counterparty_node_id),
+				});
+			},
+		}
+
+		if should_persist {
+			self.persist_peer_state(counterparty_node_id).await.map_err(|e| {
+				APIError::APIMisuseError {
+					err: format!(
+						"Failed to persist peer state for {}: {}",
+						counterparty_node_id, e
+					),
+				}
+			})?;
+		}
+
+		Ok(())
+	}
+
 	fn generate_order_id(&self) -> LSPS1OrderId {
 		let bytes = self.entropy_source.get_secure_random_bytes();
 		LSPS1OrderId(utils::hex_str(&bytes[0..16]))
@@ -930,6 +972,25 @@ where
 			},
 		}
 	}
+
+	/// Prunes a completed order from state.
+	///
+	/// Wraps [`LSPS1ServiceHandler::prune_order`].
+	pub fn prune_order(
+		&self, counterparty_node_id: PublicKey, order_id: LSPS1OrderId,
+	) -> Result<(), APIError> {
+		let mut fut = pin!(self.inner.prune_order(counterparty_node_id, order_id));
+
+		let mut waker = dummy_waker();
+		let mut ctx = task::Context::from_waker(&mut waker);
+		match fut.as_mut().poll(&mut ctx) {
+			task::Poll::Ready(result) => result,
+			task::Poll::Pending => {
+				// In a sync context, we can't wait for the future to complete.
+				unreachable!("Should not be pending in a sync context");
+			},
+		}
+	}
 }
 
 fn check_range(min: u64, max: u64, value: u64) -> bool {