diff --git a/src/server/mq.rs b/src/server/mq.rs
index 22dcab4fb..e1e81a4e3 100644
--- a/src/server/mq.rs
+++ b/src/server/mq.rs
@@ -56,6 +56,11 @@ pub enum Task {
         parent: ParentHandle,
     },
 
+    SyncChildren {
+        ca_handle: CaHandle,
+        ca_version: u64
+    },
+
     ResourceClassRemoved {
         ca_handle: CaHandle,
         ca_version: u64,
@@ -120,6 +125,20 @@ impl Task {
                     ).finish()
                 )
             }
+            Task::SyncChildren { 
+                ca_handle: ca, 
+                .. 
+            } => {
+                Cow::Owned(
+                    Ident::builder(
+                        const { Ident::make("sync_") }
+                    ).push_handle(
+                        ca
+                    ).push_ident(
+                        const { Ident::make("_children") }
+                    ).finish()
+                )
+            },
             Task::SuspendChildrenIfNeeded { ca_handle: ca } => {
                 Cow::Owned(
                     Ident::builder(
@@ -234,6 +253,12 @@ impl fmt::Display for Task {
             } => {
                 write!(f, "synchronize CA '{ca}' with parent '{parent}'")
             }
+            Task::SyncChildren {
+                ca_handle: ca,
+                ..
+            } => {
+                write!(f, "synchronize CA '{ca}' with children")
+            }
             Task::RenewTestbedTa => write!(f, "renew testbed TA"),
             Task::SyncTrustAnchorProxySignerIfPossible => {
                 write!(f, "sync TA Proxy and Signer if both in this server.")
@@ -624,7 +649,21 @@ impl eventsourcing::PostSaveEventListener<CertAuth> for TaskQueue {
                             );
                     }
                 }
-
+                CertAuthEvent::ChildCertificateIssued { child, .. } => {
+                    if let Err(e) = self.schedule(
+                        Task::SyncChildren { 
+                            ca_handle: child.convert(), 
+                            ca_version: 0
+                        }, 
+                        now()
+                    ) {
+                        error!(
+                                "Could not schedule sync from {}. Restart Krill or run 'krillc bulk refresh'. Error was: {}",
+                                child,
+                                e
+                            );
+                    }
+                }
                 _ => {
                     // nothing to do
                 }
diff --git a/src/server/scheduler.rs b/src/server/scheduler.rs
index 564aa59a0..96c717d7a 100644
--- a/src/server/scheduler.rs
+++ b/src/server/scheduler.rs
@@ -147,6 +147,11 @@ impl Scheduler {
                 parent,
             } => self.sync_parent(ca, ca_version, parent).await,
 
+            Task::SyncChildren {
+                ca_handle: ca,
+                ca_version,
+            } => self.sync_children(ca, ca_version).await,
+
             Task::RenewTestbedTa => self.renew_testbed_ta().await,
 
             Task::SyncTrustAnchorProxySignerIfPossible => {
@@ -419,6 +424,30 @@ impl Scheduler {
         }
     }
 
+    async fn sync_children(
+        &self,
+        ca: CaHandle,
+        ca_version: u64,
+    ) -> Result<TaskResult, FatalError> {
+        if let Ok(parent) = self.ca_manager.get_ca(&ca) {
+            for child in parent.children() {
+                if let Ok(child) = self.ca_manager.get_ca(&child.convert()) {
+                    debug!(
+                        "Syncing child '{}' for parent {}", 
+                        child.handle(), 
+                        parent.handle()
+                    );
+                    self.tasks.schedule(Task::SyncParent { 
+                        ca_handle: child.handle().convert(), 
+                        ca_version, 
+                        parent: parent.handle().convert() 
+                    }, now()).map_err(FatalError)?;
+                }
+            }
+        }
+        Ok(TaskResult::Done)
+    }
+
     /// Resync the testbed TA signer and proxy
     async fn renew_testbed_ta(&self) -> Result<TaskResult, FatalError> {
         if let Err(e) = self.ca_manager.ta_renew_testbed_ta() {
diff --git a/tests/functional_grandchild_resources.rs b/tests/functional_grandchild_resources.rs
new file mode 100644
index 000000000..baec7869a
--- /dev/null
+++ b/tests/functional_grandchild_resources.rs
@@ -0,0 +1,182 @@
+//! Tests grandchild resources updated.
+
+use krill::api;
+use rpki::repository::resources::ResourceSet;
+
+use crate::common::sleep_seconds;
+
+mod common;
+
+
+//------------ Test Function -------------------------------------------------
+
+/// Test Krill parent/child/grandchild interactions.
+/// 
+/// The setup is:
+///
+/// ```text
+///       TA
+///        |
+///      parent
+///        |
+///      child
+///        |
+///    grandchild
+///        |
+/// grandgrandchild
+/// ```
+///
+/// The test verifies that:
+///  * Grandchild gets the resources from child,
+///  * Parent can restrict the resources on child,
+///  * Grandchild will learn about those resource changes and adjust the 
+///  effective resources accordingly
+
+#[tokio::test]
+async fn functional_resource_updates() {
+    let (server, _tmpdir)
+        = common::KrillServer::start_with_file_storage_and_testbed().await;
+
+    let testbed = common::ca_handle("testbed");
+
+    let ca_parent = common::ca_handle("parent");
+    let ca_parent_res = common::resources("AS65000", "10.0.0.0/16", "");
+
+    let ca_child = common::ca_handle("child");
+    let ca_child_res = common::resources("AS65000", "10.0.0.0/16", "");
+
+    let ca_grandchild = common::ca_handle("grandchild");
+    let ca_grandchild_res = common::resources("AS65000", "10.0.0.0/23", "");
+
+    let ca_grandgrandchild = common::ca_handle("grandgrandchild");
+    let ca_grandgrandchild_res = common::resources("AS65000", "10.0.0.0/23", "");
+
+    let rcn0 = common::rcn(0);
+
+    // Wait for the *testbed* CA to get its certificate, this means
+    // that all CAs which are set up as part of krill_start under the
+    // testbed config have been set up.
+    assert!(
+        server.wait_for_ca_resources(&testbed, &ResourceSet::all()).await
+    );
+
+    eprintln!(">>>> Set up CA parent under testbed.");
+    server.create_ca_with_repo(&ca_parent).await;
+    server.register_ca_with_parent(&ca_parent, &testbed, &ca_parent_res).await;
+
+    eprintln!(">>>> Set up CA child under parent.");
+    server.create_ca_with_repo(&ca_child).await;
+    server.register_ca_with_parent(&ca_child, &ca_parent, &ca_child_res).await;
+
+    eprintln!(">>>> Set up CA grandchild under child.");
+    server.create_ca_with_repo(&ca_grandchild).await;
+    server.register_ca_with_parent(&ca_grandchild, &ca_child, &ca_grandchild_res).await;
+
+    eprintln!(">>>> Set up CA grandgrandchild under grandchild.");
+    server.create_ca_with_repo(&ca_grandgrandchild).await;
+    server.register_ca_with_parent(&ca_grandgrandchild, &ca_grandchild, &ca_grandgrandchild_res).await;
+
+    eprintln!(">>>> Expect that CA child publishes the certificate for CA grandchild.");
+    let mut files = server.expected_objects(&ca_child);
+    files.push_mft_and_crl(&rcn0).await;
+    files.push_cer(&ca_grandchild, &rcn0).await;
+    assert!(files.wait_for_published().await);
+
+    sleep_seconds(3).await;
+
+    eprintln!(">>>> Update resources given to the child.");
+    let ca_child_new_res = common::resources("65000", "10.0.0.0/24", "");
+    let ca_grandchild_new_res = 
+        ca_grandchild_res.clone().intersection(&ca_child_new_res);
+    let ca_grandgrandchild_new_res = 
+        ca_grandgrandchild_res.clone().intersection(&ca_grandchild_new_res);
+    eprintln!("New resources: {}", &ca_grandchild_new_res);
+    server.client().child_update(
+        &ca_parent, 
+        &ca_child.convert(), 
+        api::admin::UpdateChildRequest::resources(ca_child_new_res.clone())
+    ).await.unwrap();
+    assert!(server.wait_for_ca_resources(&ca_child, &ca_child_new_res).await);
+
+    // Wait before the child gets aware of the new resources
+    sleep_seconds(3).await;
+
+    eprintln!(">>>> Check new resources given to the child.");
+    assert_eq!(
+        server.client().ca_details(&ca_child).await.unwrap().resources,
+        ca_child_new_res.clone()
+    );
+    // We want the 'parent' and 'child' to agree on the new resources.
+    // i.e. that the 'child' learnt that the new resource set it smaller.
+    assert_eq!(
+        server.client().ca_details(&ca_child).await.unwrap().resources,
+        server.client().child_details(
+            &ca_parent, &ca_child.convert()
+        ).await.unwrap().entitled_resources,
+    );
+
+    sleep_seconds(3).await;
+
+    eprintln!(">>>> Check resources updated on grandchild.");
+    // We do not want the 'child' to update the entitled resources of the
+    // 'grandchild'. The resources of the grandchild will shrink automatically
+    // and grow again when the child gets more resources again.
+    // This checks the entitled resources have not changed.
+    assert_eq!(
+        server.client().child_details(
+            &ca_child, &ca_grandchild.convert()
+        ).await.unwrap().entitled_resources,
+        ca_grandchild_res.clone()
+    );
+    // We do want 'grandchild' to learn of the effective resources after 
+    // shrinking.
+    assert_ne!(
+        server.client().ca_details(&ca_grandchild).await.unwrap().resources,
+        ca_grandchild_res.clone()
+    );
+    assert_eq!(
+        server.client().ca_details(&ca_grandchild).await.unwrap().resources,
+        ca_grandchild_new_res.clone()
+    );
+    // We also want the grandgrandchild to learn of the new effective resources
+    assert_eq!(
+        server.client().child_details(
+            &ca_grandchild, &ca_grandgrandchild.convert()
+        ).await.unwrap().entitled_resources,
+        ca_grandgrandchild_res.clone()
+    );
+    assert_eq!(
+        server.client().ca_details(&ca_grandgrandchild).await.unwrap().resources,
+        ca_grandgrandchild_new_res.clone()
+    );
+
+    eprintln!(">>>> Revert the resources given to the child.");
+    server.client().child_update(
+        &ca_parent, 
+        &ca_child.convert(), 
+        api::admin::UpdateChildRequest::resources(ca_child_res.clone())
+    ).await.unwrap();
+    assert!(server.wait_for_ca_resources(&ca_child, &ca_child_new_res).await);
+
+    sleep_seconds(3).await;
+
+    // Everything should be back to the original state again
+    assert_eq!(
+        server.client().ca_details(&ca_child).await.unwrap().resources,
+        ca_child_res.clone()
+    );
+    assert_eq!(
+        server.client().child_details(
+            &ca_child, &ca_grandchild.convert()
+        ).await.unwrap().entitled_resources,
+        ca_grandchild_res.clone()
+    );
+    assert_eq!(
+        server.client().ca_details(&ca_grandchild).await.unwrap().resources,
+        ca_grandchild_res.clone()
+    );
+    assert_eq!(
+        server.client().ca_details(&ca_grandgrandchild).await.unwrap().resources,
+        ca_grandgrandchild_res.clone()
+    );
+}