diff --git a/hadoop-hdds/server-scm/src/main/java/org/apache/hadoop/hdds/scm/pipeline/RatisPipelineProvider.java b/hadoop-hdds/server-scm/src/main/java/org/apache/hadoop/hdds/scm/pipeline/RatisPipelineProvider.java
index 6563e3fcaa..df21420be1 100644
--- a/hadoop-hdds/server-scm/src/main/java/org/apache/hadoop/hdds/scm/pipeline/RatisPipelineProvider.java
+++ b/hadoop-hdds/server-scm/src/main/java/org/apache/hadoop/hdds/scm/pipeline/RatisPipelineProvider.java
@@ -91,7 +91,9 @@ private static ContainerPlacementPolicy createContainerPlacementPolicy(
   public Pipeline create(ReplicationFactor factor) throws IOException {
     // Get set of datanodes already used for ratis pipeline
     Set<DatanodeDetails> dnsUsed = new HashSet<>();
-    stateManager.getPipelines(ReplicationType.RATIS, factor)
+    stateManager.getPipelines(ReplicationType.RATIS, factor).stream().filter(
+        p -> p.getPipelineState().equals(PipelineState.OPEN) ||
+            p.getPipelineState().equals(PipelineState.ALLOCATED))
         .forEach(p -> dnsUsed.addAll(p.getNodes()));
 
     // Get list of healthy nodes
diff --git a/hadoop-hdds/server-scm/src/test/java/org/apache/hadoop/hdds/scm/container/MockNodeManager.java b/hadoop-hdds/server-scm/src/test/java/org/apache/hadoop/hdds/scm/container/MockNodeManager.java
index 129644e7de..c10bc44068 100644
--- a/hadoop-hdds/server-scm/src/test/java/org/apache/hadoop/hdds/scm/container/MockNodeManager.java
+++ b/hadoop-hdds/server-scm/src/test/java/org/apache/hadoop/hdds/scm/container/MockNodeManager.java
@@ -43,6 +43,7 @@
 import org.assertj.core.util.Preconditions;
 
 import java.io.IOException;
+import java.util.ArrayList;
 import java.util.Collections;
 import java.util.HashMap;
 import java.util.LinkedList;
@@ -184,7 +185,7 @@ public int getNodeCount(HddsProtos.NodeState nodestate) {
    */
   @Override
   public List<DatanodeDetails> getAllNodes() {
-    return null;
+    return new ArrayList<>(nodeMetricMap.keySet());
   }
 
   /**
diff --git a/hadoop-ozone/integration-test/src/test/java/org/apache/hadoop/hdds/scm/pipeline/TestRatisPipelineProvider.java b/hadoop-ozone/integration-test/src/test/java/org/apache/hadoop/hdds/scm/pipeline/TestRatisPipelineProvider.java
index 28f47cc80f..00144e4e65 100644
--- a/hadoop-ozone/integration-test/src/test/java/org/apache/hadoop/hdds/scm/pipeline/TestRatisPipelineProvider.java
+++ b/hadoop-ozone/integration-test/src/test/java/org/apache/hadoop/hdds/scm/pipeline/TestRatisPipelineProvider.java
@@ -135,4 +135,67 @@ public void testCreatePipelineWithNodes() {
         Pipeline.PipelineState.OPEN);
     Assert.assertEquals(pipeline.getNodes().size(), factor.getNumber());
   }
+
+  @Test
+  public void testCreatePipelinesDnExclude() throws IOException {
+
+    // We have 10 DNs in MockNodeManager.
+    // Use up first 3 DNs for an open pipeline.
+    List<DatanodeDetails> openPiplineDns = nodeManager.getAllNodes()
+        .subList(0, 3);
+    HddsProtos.ReplicationFactor factor = HddsProtos.ReplicationFactor.THREE;
+
+    Pipeline openPipeline = Pipeline.newBuilder()
+        .setType(HddsProtos.ReplicationType.RATIS)
+        .setFactor(factor)
+        .setNodes(openPiplineDns)
+        .setState(Pipeline.PipelineState.OPEN)
+        .setId(PipelineID.randomId())
+        .build();
+
+    stateManager.addPipeline(openPipeline);
+
+    // Use up next 3 DNs also for an open pipeline.
+    List<DatanodeDetails> moreOpenPiplineDns = nodeManager.getAllNodes()
+        .subList(3, 6);
+    Pipeline anotherOpenPipeline = Pipeline.newBuilder()
+        .setType(HddsProtos.ReplicationType.RATIS)
+        .setFactor(factor)
+        .setNodes(moreOpenPiplineDns)
+        .setState(Pipeline.PipelineState.OPEN)
+        .setId(PipelineID.randomId())
+        .build();
+    stateManager.addPipeline(anotherOpenPipeline);
+
+    // Use up next 3 DNs also for a closed pipeline.
+    List<DatanodeDetails> closedPiplineDns = nodeManager.getAllNodes()
+        .subList(6, 9);
+    Pipeline anotherClosedPipeline = Pipeline.newBuilder()
+        .setType(HddsProtos.ReplicationType.RATIS)
+        .setFactor(factor)
+        .setNodes(closedPiplineDns)
+        .setState(Pipeline.PipelineState.CLOSED)
+        .setId(PipelineID.randomId())
+        .build();
+    stateManager.addPipeline(anotherClosedPipeline);
+
+    Pipeline pipeline = provider.create(factor);
+    Assert.assertEquals(pipeline.getType(), HddsProtos.ReplicationType.RATIS);
+    Assert.assertEquals(pipeline.getFactor(), factor);
+    Assert.assertEquals(pipeline.getPipelineState(),
+        Pipeline.PipelineState.OPEN);
+    Assert.assertEquals(pipeline.getNodes().size(), factor.getNumber());
+    List<DatanodeDetails> pipelineNodes = pipeline.getNodes();
+
+    // Pipline nodes cannot be from open pipelines.
+    Assert.assertTrue(
+        pipelineNodes.parallelStream().filter(dn ->
+        (openPiplineDns.contains(dn) || moreOpenPiplineDns.contains(dn)))
+        .count() == 0);
+
+    // Since we have only 10 DNs, at least 1 pipeline node should have been
+    // from the closed pipeline DN list.
+    Assert.assertTrue(pipelineNodes.parallelStream().filter(
+        closedPiplineDns::contains).count() > 0);
+  }
 }
\ No newline at end of file