The Stream Control Transmission Proto-col (SCTP) is a relatively new transport protocol. Ithas several underlying mechanisms that are similar tothe Transmission Control Protocol (TCP), as well asseveral improvements that are important in certainclasses of applications. The timeout scheme of SCTP,however, is almost identical to that used in TCP.With the dynamics of today’s Internet, that timeoutscheme may be too passive. This paper presents an al-gorithm which dynamically adjusts the overall contextof the retransmission timeout process without chang-ing the fundamental retransmission mechanisms. Thisapproach manages the impact of fast retransmissionsand timeouts to significantly improve the throughputof SCTP applications. The algorithm has been im-plemented and tested in real network environments.Experimental results show that the algorithm avoidsspurious retransmissions and provides better through-put by intelligently managing RTO boundaries andallowing conventional timeout schemes to participatemore actively in the retransmission process.