diff --git a/module/zfs/arc.c b/module/zfs/arc.c
index ec006cb0f6f3..ad29237b971a 100644
--- a/module/zfs/arc.c
+++ b/module/zfs/arc.c
@@ -22,7 +22,7 @@
  * Copyright (c) 2005, 2010, Oracle and/or its affiliates. All rights reserved.
  * Copyright (c) 2013 by Delphix. All rights reserved.
  * Copyright (c) 2013 by Saso Kiselkov. All rights reserved.
- * Copyright 2013 Nexenta Systems, Inc.  All rights reserved.
+ * Copyright 2014 Nexenta Systems, Inc.  All rights reserved.
  */
 
 /*
@@ -1701,6 +1701,8 @@ arc_hdr_destroy(arc_buf_hdr_t *hdr)
 			list_remove(l2hdr->b_dev->l2ad_buflist, hdr);
 			ARCSTAT_INCR(arcstat_l2_size, -hdr->b_size);
 			ARCSTAT_INCR(arcstat_l2_asize, -l2hdr->b_asize);
+			vdev_space_update(l2hdr->b_dev->l2ad_vdev,
+			    -l2hdr->b_asize, 0, 0);
 			kmem_cache_free(l2arc_hdr_cache, l2hdr);
 			arc_space_return(L2HDR_SIZE, ARC_SPACE_L2HDRS);
 			if (hdr->b_state == arc_l2c_only)
@@ -3791,6 +3793,8 @@ arc_release(arc_buf_t *buf, void *tag)
 
 	if (l2hdr) {
 		ARCSTAT_INCR(arcstat_l2_asize, -l2hdr->b_asize);
+		vdev_space_update(l2hdr->b_dev->l2ad_vdev,
+		    -l2hdr->b_asize, 0, 0);
 		kmem_cache_free(l2arc_hdr_cache, l2hdr);
 		arc_space_return(L2HDR_SIZE, ARC_SPACE_L2HDRS);
 		ARCSTAT_INCR(arcstat_l2_size, -buf_size);
@@ -4637,6 +4641,7 @@ l2arc_write_done(zio_t *zio)
 	arc_buf_hdr_t *head, *ab, *ab_prev;
 	l2arc_buf_hdr_t *abl2;
 	kmutex_t *hash_lock;
+	int64_t bytes_dropped = 0;
 
 	cb = zio->io_private;
 	ASSERT(cb != NULL);
@@ -4684,6 +4689,7 @@ l2arc_write_done(zio_t *zio)
 			 */
 			list_remove(buflist, ab);
 			ARCSTAT_INCR(arcstat_l2_asize, -abl2->b_asize);
+			bytes_dropped += abl2->b_asize;
 			ab->b_l2hdr = NULL;
 			kmem_cache_free(l2arc_hdr_cache, abl2);
 			arc_space_return(L2HDR_SIZE, ARC_SPACE_L2HDRS);
@@ -4703,6 +4709,8 @@ l2arc_write_done(zio_t *zio)
 	kmem_cache_free(hdr_cache, head);
 	mutex_exit(&l2arc_buflist_mtx);
 
+	vdev_space_update(dev->l2ad_vdev, -bytes_dropped, 0, 0);
+
 	l2arc_do_free_on_write();
 
 	kmem_free(cb, sizeof (l2arc_write_callback_t));
@@ -4841,6 +4849,7 @@ l2arc_evict(l2arc_dev_t *dev, uint64_t distance, boolean_t all)
 	arc_buf_hdr_t *ab, *ab_prev;
 	kmutex_t *hash_lock;
 	uint64_t taddr;
+	int64_t bytes_evicted = 0;
 
 	buflist = dev->l2ad_buflist;
 
@@ -4939,6 +4948,7 @@ l2arc_evict(l2arc_dev_t *dev, uint64_t distance, boolean_t all)
 			if (ab->b_l2hdr != NULL) {
 				abl2 = ab->b_l2hdr;
 				ARCSTAT_INCR(arcstat_l2_asize, -abl2->b_asize);
+				bytes_evicted += abl2->b_asize;
 				ab->b_l2hdr = NULL;
 				kmem_cache_free(l2arc_hdr_cache, abl2);
 				arc_space_return(L2HDR_SIZE, ARC_SPACE_L2HDRS);
@@ -4956,7 +4966,7 @@ l2arc_evict(l2arc_dev_t *dev, uint64_t distance, boolean_t all)
 	}
 	mutex_exit(&l2arc_buflist_mtx);
 
-	vdev_space_update(dev->l2ad_vdev, -(taddr - dev->l2ad_evict), 0, 0);
+	vdev_space_update(dev->l2ad_vdev, -bytes_evicted, 0, 0);
 	dev->l2ad_evict = taddr;
 }
 
@@ -5204,15 +5214,13 @@ l2arc_write_buffers(spa_t *spa, l2arc_dev_t *dev, uint64_t target_sz,
 	ARCSTAT_INCR(arcstat_l2_write_bytes, write_asize);
 	ARCSTAT_INCR(arcstat_l2_size, write_sz);
 	ARCSTAT_INCR(arcstat_l2_asize, write_asize);
-	vdev_space_update(dev->l2ad_vdev, write_psize, 0, 0);
+	vdev_space_update(dev->l2ad_vdev, write_asize, 0, 0);
 
 	/*
 	 * Bump device hand to the device start if it is approaching the end.
 	 * l2arc_evict() will already have evicted ahead for this case.
 	 */
 	if (dev->l2ad_hand >= (dev->l2ad_end - target_sz)) {
-		vdev_space_update(dev->l2ad_vdev,
-		    dev->l2ad_end - dev->l2ad_hand, 0, 0);
 		dev->l2ad_hand = dev->l2ad_start;
 		dev->l2ad_evict = dev->l2ad_start;
 		dev->l2ad_first = B_FALSE;