diff --git a/CHANGELOG_PENDING.md b/CHANGELOG_PENDING.md
index 0c7da31e..948c7b66 100644
--- a/CHANGELOG_PENDING.md
+++ b/CHANGELOG_PENDING.md
@@ -21,6 +21,7 @@ program](https://hackerone.com/tendermint).
 
 - [privval] \#3370 Refactors and simplifies validator/kms connection handling. Please refer to thttps://github.com/tendermint/tendermint/pull/3370#issue-257360971
 - [consensus] \#3839 Reduce "Error attempting to add vote" message severity (Error -> Info)
+- [mempool] \#3877 Make `max_tx_bytes` configurable instead of `max_msg_bytes`
 
 ### BUG FIXES:
 
diff --git a/config/config.go b/config/config.go
index b00702ce..d414d056 100644
--- a/config/config.go
+++ b/config/config.go
@@ -637,7 +637,7 @@ type MempoolConfig struct {
 	Size        int    `mapstructure:"size"`
 	MaxTxsBytes int64  `mapstructure:"max_txs_bytes"`
 	CacheSize   int    `mapstructure:"cache_size"`
-	MaxMsgBytes int    `mapstructure:"max_msg_bytes"`
+	MaxTxBytes  int    `mapstructure:"max_tx_bytes"`
 }
 
 // DefaultMempoolConfig returns a default configuration for the Tendermint mempool
@@ -651,7 +651,7 @@ func DefaultMempoolConfig() *MempoolConfig {
 		Size:        5000,
 		MaxTxsBytes: 1024 * 1024 * 1024, // 1GB
 		CacheSize:   10000,
-		MaxMsgBytes: 1024 * 1024, // 1MB
+		MaxTxBytes:  1024 * 1024, // 1MB
 	}
 }
 
@@ -684,8 +684,8 @@ func (cfg *MempoolConfig) ValidateBasic() error {
 	if cfg.CacheSize < 0 {
 		return errors.New("cache_size can't be negative")
 	}
-	if cfg.MaxMsgBytes < 0 {
-		return errors.New("max_msg_bytes can't be negative")
+	if cfg.MaxTxBytes < 0 {
+		return errors.New("max_tx_bytes can't be negative")
 	}
 	return nil
 }
diff --git a/config/toml.go b/config/toml.go
index b79d14d9..268c96ff 100644
--- a/config/toml.go
+++ b/config/toml.go
@@ -294,8 +294,9 @@ max_txs_bytes = {{ .Mempool.MaxTxsBytes }}
 # Size of the cache (used to filter transactions we saw earlier) in transactions
 cache_size = {{ .Mempool.CacheSize }}
 
-# Limit the size of TxMessage
-max_msg_bytes = {{ .Mempool.MaxMsgBytes }}
+# Maximum size of a single transaction.
+# NOTE: the max size of a tx transmitted over the network is {max_tx_bytes} + {amino overhead}.
+max_tx_bytes = {{ .Mempool.MaxTxBytes }}
 
 ##### fast sync configuration options #####
 [fastsync]
diff --git a/docs/tendermint-core/configuration.md b/docs/tendermint-core/configuration.md
index 8fd369d8..59a25966 100644
--- a/docs/tendermint-core/configuration.md
+++ b/docs/tendermint-core/configuration.md
@@ -240,8 +240,9 @@ max_txs_bytes = 1073741824
 # Size of the cache (used to filter transactions we saw earlier) in transactions
 cache_size = 10000
 
-# Limit the size of TxMessage
-max_msg_bytes = 1048576
+# Maximum size of a single transaction.
+# NOTE: the max size of a tx transmitted over the network is {max_tx_bytes} + {amino overhead}.
+max_tx_bytes = 1048576
 
 ##### fast sync configuration options #####
 [fastsync]
diff --git a/mempool/clist_mempool.go b/mempool/clist_mempool.go
index fc4591d2..8df4e670 100644
--- a/mempool/clist_mempool.go
+++ b/mempool/clist_mempool.go
@@ -232,8 +232,8 @@ func (mem *CListMempool) CheckTxWithInfo(tx types.Tx, cb func(*abci.Response), t
 	// The size of the corresponding amino-encoded TxMessage
 	// can't be larger than the maxMsgSize, otherwise we can't
 	// relay it to peers.
-	if max := calcMaxTxSize(mem.config.MaxMsgBytes); txSize > max {
-		return ErrTxTooLarge{max, txSize}
+	if txSize > mem.config.MaxTxBytes {
+		return ErrTxTooLarge{mem.config.MaxTxBytes, txSize}
 	}
 
 	if mem.preCheck != nil {
diff --git a/mempool/clist_mempool_test.go b/mempool/clist_mempool_test.go
index 220bb5cb..666d5530 100644
--- a/mempool/clist_mempool_test.go
+++ b/mempool/clist_mempool_test.go
@@ -426,8 +426,8 @@ func TestMempoolMaxMsgSize(t *testing.T) {
 	mempl, cleanup := newMempoolWithApp(cc)
 	defer cleanup()
 
-	maxMsgSize := mempl.config.MaxMsgBytes
-	maxTxSize := calcMaxTxSize(mempl.config.MaxMsgBytes)
+	maxTxSize := mempl.config.MaxTxBytes
+	maxMsgSize := calcMaxMsgSize(maxTxSize)
 
 	testCases := []struct {
 		len int
diff --git a/mempool/reactor.go b/mempool/reactor.go
index 0ca27340..349ed7ea 100644
--- a/mempool/reactor.go
+++ b/mempool/reactor.go
@@ -263,8 +263,9 @@ func RegisterMempoolMessages(cdc *amino.Codec) {
 }
 
 func (memR *Reactor) decodeMsg(bz []byte) (msg MempoolMessage, err error) {
-	if l := len(bz); l > memR.config.MaxMsgBytes {
-		return msg, ErrTxTooLarge{memR.config.MaxMsgBytes, l}
+	maxMsgSize := calcMaxMsgSize(memR.config.MaxTxBytes)
+	if l := len(bz); l > maxMsgSize {
+		return msg, ErrTxTooLarge{maxMsgSize, l}
 	}
 	err = cdc.UnmarshalBinaryBare(bz, &msg)
 	return
@@ -282,8 +283,8 @@ func (m *TxMessage) String() string {
 	return fmt.Sprintf("[TxMessage %v]", m.Tx)
 }
 
-// calcMaxTxSize returns the max size of Tx
+// calcMaxMsgSize returns the max size of TxMessage
 // account for amino overhead of TxMessage
-func calcMaxTxSize(maxMsgSize int) int {
-	return maxMsgSize - aminoOverheadForTxMessage
+func calcMaxMsgSize(maxTxSize int) int {
+	return maxTxSize + aminoOverheadForTxMessage
 }