diff --git a/pkg/tcpip/header/ipv6_extension_headers.go b/pkg/tcpip/header/ipv6_extension_headers.go
index 583c2c5d3..571eae233 100644
--- a/pkg/tcpip/header/ipv6_extension_headers.go
+++ b/pkg/tcpip/header/ipv6_extension_headers.go
@@ -47,6 +47,11 @@ const (
 	// IPv6NoNextHeaderIdentifier is the header identifier used to signify the end
 	// of an IPv6 payload, as per RFC 8200 section 4.7.
 	IPv6NoNextHeaderIdentifier IPv6ExtensionHeaderIdentifier = 59
+
+	// IPv6UnknownExtHdrIdentifier is reserved by IANA.
+	// https://www.iana.org/assignments/ipv6-parameters/ipv6-parameters.xhtml#extension-header
+	// "254	Use for experimentation and testing	[RFC3692][RFC4727]"
+	IPv6UnknownExtHdrIdentifier IPv6ExtensionHeaderIdentifier = 254
 )
 
 const (
@@ -452,9 +457,11 @@ func (i *IPv6PayloadIterator) AsRawHeader(consume bool) IPv6RawPayloadHeader {
 		// Since we consume the iterator, we return the payload as is.
 		buf = i.payload
 
-		// Mark i as done.
+		// Mark i as done, but keep track of where we were for error reporting.
 		*i = IPv6PayloadIterator{
 			nextHdrIdentifier: IPv6NoNextHeaderIdentifier,
+			headerOffset:      i.headerOffset,
+			nextOffset:        i.nextOffset,
 		}
 	} else {
 		buf = i.payload.Clone(nil)
diff --git a/pkg/tcpip/network/ipv6/ipv6.go b/pkg/tcpip/network/ipv6/ipv6.go
index afc7ecf2a..181c50cc7 100644
--- a/pkg/tcpip/network/ipv6/ipv6.go
+++ b/pkg/tcpip/network/ipv6/ipv6.go
@@ -34,7 +34,9 @@ import (
 )
 
 const (
+	// ReassembleTimeout controls how long a fragment will be held.
 	// As per RFC 8200 section 4.5:
+	//
 	//   If insufficient fragments are received to complete reassembly of a packet
 	//   within 60 seconds of the reception of the first-arriving fragment of that
 	//   packet, reassembly of that packet must be abandoned.
@@ -1092,9 +1094,16 @@ func (e *endpoint) handlePacket(pkt *stack.PacketBuffer) {
 					//
 					// Which when taken together indicate that an unknown protocol should
 					// be treated as an unrecognized next header value.
+					// The location of the Next Header field is in a different place in
+					// the initial IPv6 header than it is in the extension headers so
+					// treat it specially.
+					prevHdrIDOffset := uint32(header.IPv6NextHeaderOffset)
+					if previousHeaderStart != 0 {
+						prevHdrIDOffset = previousHeaderStart
+					}
 					_ = e.protocol.returnError(&icmpReasonParameterProblem{
 						code:    header.ICMPv6UnknownHeader,
-						pointer: it.ParseOffset(),
+						pointer: prevHdrIDOffset,
 					}, pkt)
 				default:
 					panic(fmt.Sprintf("unrecognized result from DeliverTransportPacket = %d", res))
@@ -1102,12 +1111,11 @@ func (e *endpoint) handlePacket(pkt *stack.PacketBuffer) {
 			}
 
 		default:
-			_ = e.protocol.returnError(&icmpReasonParameterProblem{
-				code:    header.ICMPv6UnknownHeader,
-				pointer: it.ParseOffset(),
-			}, pkt)
-			stats.UnknownProtocolRcvdPackets.Increment()
-			return
+			// Since the iterator returns IPv6RawPayloadHeader for unknown Extension
+			// Header IDs this should never happen unless we missed a supported type
+			// here.
+			panic(fmt.Sprintf("unrecognized type from it.Next() = %T", extHdr))
+
 		}
 	}
 }
diff --git a/pkg/tcpip/network/ipv6/ipv6_test.go b/pkg/tcpip/network/ipv6/ipv6_test.go
index cff98c541..781bf7900 100644
--- a/pkg/tcpip/network/ipv6/ipv6_test.go
+++ b/pkg/tcpip/network/ipv6/ipv6_test.go
@@ -51,6 +51,7 @@ const (
 	fragmentExtHdrID    = uint8(header.IPv6FragmentExtHdrIdentifier)
 	destinationExtHdrID = uint8(header.IPv6DestinationOptionsExtHdrIdentifier)
 	noNextHdrID         = uint8(header.IPv6NoNextHeaderIdentifier)
+	unknownHdrID        = uint8(header.IPv6UnknownExtHdrIdentifier)
 
 	extraHeaderReserve = 50
 )
@@ -572,6 +573,33 @@ func TestReceiveIPv6ExtHdrs(t *testing.T) {
 			shouldAccept: false,
 			expectICMP:   false,
 		},
+		{
+			name: "unknown next header (first)",
+			extHdr: func(nextHdr uint8) ([]byte, uint8) {
+				return []byte{
+					nextHdr, 0, 63, 4, 1, 2, 3, 4,
+				}, unknownHdrID
+			},
+			shouldAccept: false,
+			expectICMP:   true,
+			ICMPType:     header.ICMPv6ParamProblem,
+			ICMPCode:     header.ICMPv6UnknownHeader,
+			pointer:      header.IPv6NextHeaderOffset,
+		},
+		{
+			name: "unknown next header (not first)",
+			extHdr: func(nextHdr uint8) ([]byte, uint8) {
+				return []byte{
+					unknownHdrID, 0,
+					63, 4, 1, 2, 3, 4,
+				}, hopByHopExtHdrID
+			},
+			shouldAccept: false,
+			expectICMP:   true,
+			ICMPType:     header.ICMPv6ParamProblem,
+			ICMPCode:     header.ICMPv6UnknownHeader,
+			pointer:      header.IPv6FixedHeaderSize,
+		},
 		{
 			name: "destination with unknown option skippable action",
 			extHdr: func(nextHdr uint8) ([]byte, uint8) {
@@ -754,11 +782,6 @@ func TestReceiveIPv6ExtHdrs(t *testing.T) {
 			ICMPCode:     header.ICMPv6UnknownHeader,
 			pointer:      header.IPv6FixedHeaderSize,
 		},
-		{
-			name:         "No next header",
-			extHdr:       func(nextHdr uint8) ([]byte, uint8) { return []byte{}, noNextHdrID },
-			shouldAccept: false,
-		},
 		{
 			name: "hopbyhop (with skippable unknown) - routing - atomic fragment - destination (with skippable unknown)",
 			extHdr: func(nextHdr uint8) ([]byte, uint8) {
diff --git a/test/packetimpact/runner/defs.bzl b/test/packetimpact/runner/defs.bzl
index 494a7f96c..60f0ebae3 100644
--- a/test/packetimpact/runner/defs.bzl
+++ b/test/packetimpact/runner/defs.bzl
@@ -243,8 +243,6 @@ ALL_TESTS = [
     ),
     PacketimpactTestInfo(
         name = "icmpv6_param_problem",
-        # TODO(b/153485026): Fix netstack then remove the line below.
-        expect_netstack_failure = True,
     ),
     PacketimpactTestInfo(
         name = "ipv6_unknown_options_action",