diff --git a/src/js/internal/sql/shared.ts b/src/js/internal/sql/shared.ts
index 94e82acef85..c9eb859bd4b 100644
--- a/src/js/internal/sql/shared.ts
+++ b/src/js/internal/sql/shared.ts
@@ -815,6 +815,16 @@ abstract class BasePooledConnection<ConnectionHandle extends { close(): void; fl
     }
     return true;
   }
+  /// Bypasses `retry()`'s auth-code gate and forces a fresh handshake on
+  /// this slot. Only meaningful when `connectionInfo.password` is a
+  /// function — the re-evaluation is what lets a rotated IAM token / Vault
+  /// lease actually take effect on a slot whose previous handshake failed
+  /// with a non-retryable auth error.
+  forceRetry(): boolean {
+    if (this.adapter.closed) return false;
+    this.doRetry();
+    return true;
+  }
 }
 
 function closeNT(onClose: (err: Error) => void, err: Error | null) {
@@ -895,7 +905,13 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
 {
   public readonly connectionInfo: Bun.SQL.__internal.DefinedPostgresOrMySQLOptions;
 
+  /// Live pool entries. Grown lazily on demand up to `maxPoolSize` — slots
+  /// are appended by #tryGrowPool and only nulled out during shutdown
+  /// (#close), so every index < connections.length is a valid connection.
   public readonly connections: PooledConnection[];
+  /// Hard cap on the number of connections this pool is allowed to open.
+  /// `connections.length` is the CURRENT size and grows from 0 up to this.
+  public readonly maxPoolSize: number;
   public readonly readyConnections: Set<PooledConnection> = new Set();
 
   public waitingQueue: Array<(err: Error | null, result: any) => void> = [];
@@ -908,7 +924,8 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
 
   constructor(connectionInfo: Bun.SQL.__internal.DefinedPostgresOrMySQLOptions) {
     this.connectionInfo = connectionInfo;
-    this.connections = new Array(connectionInfo.max);
+    this.connections = [];
+    this.maxPoolSize = connectionInfo.max;
   }
 
   protected abstract createPooledConnection(): PooledConnection;
@@ -1003,10 +1020,37 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
 
   maxDistribution() {
     if (!this.waitingQueue.length) return 0;
-    const result = Math.ceil((this.waitingQueue.length + this.totalQueries) / this.connections.length);
+    // Target distribution against the pool ceiling, not the current size.
+    // With lazy pool growth `connections.length` starts small and would
+    // collapse every queued query onto the first connection.
+    const result = Math.ceil((this.waitingQueue.length + this.totalQueries) / this.maxPoolSize);
     return result ? result : 1;
   }
 
+  /// Open a new connection and append it to the pool if we have room. The
+  /// new connection starts connecting immediately and will enter
+  /// `readyConnections` via `release()` once its TCP/auth handshake finishes.
+  /// Returns the new connection, or null if we're already at `maxPoolSize`.
+  #tryGrowPool(): PooledConnection | null {
+    if (this.closed) return null;
+    if (this.connections.length >= this.maxPoolSize) return null;
+    const connection = this.createPooledConnection();
+    this.connections.push(connection);
+    return connection;
+  }
+
+  /// Count connections that are still completing their handshake. A pending
+  /// connection will soon join `readyConnections`, so we don't need to grow
+  /// the pool further just because no connection is ready *right now*.
+  #pendingConnectionsCount(): number {
+    let count = 0;
+    const len = this.connections.length;
+    for (let i = 0; i < len; i++) {
+      if (this.connections[i].state === PooledConnectionState.pending) count++;
+    }
+    return count;
+  }
+
   flushConcurrentQueries() {
     const maxDistribution = this.maxDistribution();
     if (maxDistribution === 0) {
@@ -1018,6 +1062,21 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
         c => !(c.flags & PooledConnectionFlags.preReserved) && c.queryCount < maxDistribution,
       );
       if (nonReservedConnections.length === 0) {
+        // No idle connection can take another query. Grow the pool only if
+        // the number of still-handshaking connections is less than the
+        // backlog — otherwise those pending connections will drain the
+        // queue on their own once they become ready.
+        //
+        // `release()` hands freshly-connected slots to `reservedQueue`
+        // first (and returns early, never feeding `waitingQueue`), so up
+        // to `reservedQueue.length` pending sockets are already spoken for
+        // and don't count as capacity for `waitingQueue`.
+        const pending = this.#pendingConnectionsCount();
+        const pendingForWaiting = Math.max(0, pending - this.reservedQueue.length);
+        const unservedWaiters = this.waitingQueue.length - pendingForWaiting;
+        if (unservedWaiters > 0 && this.connections.length < this.maxPoolSize) {
+          this.#tryGrowPool();
+        }
         return;
       }
       const orderedConnections = nonReservedConnections.sort((a, b) => a.queryCount - b.queryCount);
@@ -1102,9 +1161,7 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
       const pollSize = this.connections.length;
       for (let i = 0; i < pollSize; i++) {
         const connection = this.connections[i];
-        // The slot can still be an unassigned hole while the pool is starting
-        // and a synchronous creation failure re-enters via release().
-        if (connection && connection.state !== PooledConnectionState.closed) {
+        if (connection.state !== PooledConnectionState.closed) {
           // some connection is connecting or connected
           return true;
         }
@@ -1303,29 +1360,63 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
           } else {
             this.waitingQueue.push(onConnected);
           }
+          // Caller is waiting behind in-flight connections. If the pool is
+          // not at max yet, open another connection in parallel rather than
+          // letting everyone pile up behind the first socket.
+          this.#tryGrowPool();
         } else if (!retry_in_progress) {
-          // impossible to connect or retry
-          onConnected(storedError ?? this.connectionClosedError(), null);
+          // Every existing slot is closed and `retry()` refused all of
+          // them. That's the non-retryable class of errors (bad password,
+          // unknown auth method, TLS failures). Opening another connection
+          // with the SAME `connectionInfo` will hit the identical failure
+          // and just burn a TCP+auth round-trip per waiter — UNLESS the
+          // password is supplied as a function (dynamic credential, e.g.
+          // IAM token), in which case a fresh attempt may genuinely pick
+          // up a new secret.
+          if (typeof this.connectionInfo.password === "function") {
+            if (reserved) {
+              this.reservedQueue.push(onConnected);
+            } else {
+              this.waitingQueue.push(onConnected);
+            }
+            // Reuse an existing closed slot via `forceRetry()` before
+            // growing. A slot that failed auth with `canBeConnected` unset
+            // can never be revived by `retry()`, so growing here would
+            // strand it: it counts against `maxPoolSize` forever while a
+            // fresh slot takes its place. Retry-first costs the same one
+            // handshake and keeps the pool dense with live slots once the
+            // credential rotates.
+            let retried = false;
+            for (let i = 0; i < pollSize; i++) {
+              const c = this.connections[i];
+              if (c.state === PooledConnectionState.closed && c.forceRetry()) {
+                retried = true;
+                break;
+              }
+            }
+            if (!retried) {
+              this.#tryGrowPool();
+            }
+          } else {
+            // impossible to connect or retry
+            onConnected(storedError ?? this.connectionClosedError(), null);
+          }
         }
         return;
       }
-      // we never started the pool, lets start it
+      // We never started the pool. Only open one connection for the first
+      // query — further connections are opened lazily by
+      // `flushConcurrentQueries()` as demand grows, up to `maxPoolSize`.
       if (reserved) {
         this.reservedQueue.push(onConnected);
       } else {
         this.waitingQueue.push(onConnected);
       }
       this.poolStarted = true;
-      const pollSize = this.connections.length;
-      // pool is always at least 1 connection
-      const firstConnection = this.createPooledConnection();
-      this.connections[0] = firstConnection;
-      if (reserved) {
+      const firstConnection = this.#tryGrowPool();
+      if (reserved && firstConnection) {
         firstConnection.flags |= PooledConnectionFlags.preReserved; // lets pre reserve the first connection
       }
-      for (let i = 1; i < pollSize; i++) {
-        this.connections[i] = this.createPooledConnection();
-      }
       return;
     }
     if (reserved) {
@@ -1355,8 +1446,10 @@ abstract class BaseSQLAdapter<PooledConnection extends BasePooledConnection, Con
         connectionWithLeastQueries.flags |= PooledConnectionFlags.preReserved;
       }
 
-      // no connection available to be reserved lets wait for a connection to be released
+      // No ready connection can be reserved. Grow the pool if we still can,
+      // so the caller isn't stuck waiting behind the currently-open sockets.
       this.reservedQueue.push(onConnected);
+      this.#tryGrowPool();
     } else {
       this.waitingQueue.push(onConnected);
       this.flushConcurrentQueries();
diff --git a/test/js/sql/sql-onconnect-onclose-throw.test.ts b/test/js/sql/sql-onconnect-onclose-throw.test.ts
index 175b32e6dc8..4ef204a0aeb 100644
--- a/test/js/sql/sql-onconnect-onclose-throw.test.ts
+++ b/test/js/sql/sql-onconnect-onclose-throw.test.ts
@@ -162,6 +162,9 @@ test.concurrent(
 // close) threw a TypeError on the holes when called from inside the callback.
 // The callback is now deferred until the pool is fully constructed. Nothing
 // is dialed: password() throws before the connection is created.
+//
+// With lazy pool growth (#30632) a single query only opens one slot even at
+// max: 2, so exactly one onclose fires.
 test.concurrent("postgres: pool calls from onclose are safe when connecting fails synchronously", async () => {
   const fixture = /* ts */ `
 import { SQL } from "bun";
@@ -194,7 +197,7 @@ try {
 process.exit(0);
 `;
   const { stdout, exitCode } = await runFixture(fixture);
-  expect(stdout).toBe("reentry ok\nreentry ok\nquery rejected: password error\n");
+  expect(stdout).toBe("reentry ok\nquery rejected: password error\n");
   expect(exitCode).toBe(0);
 });
 
diff --git a/test/js/sql/sql-pool-lazy-growth.test.ts b/test/js/sql/sql-pool-lazy-growth.test.ts
new file mode 100644
index 00000000000..28043e27d93
--- /dev/null
+++ b/test/js/sql/sql-pool-lazy-growth.test.ts
@@ -0,0 +1,175 @@
+// Issue #30632: `new Bun.SQL({ max: N })` must grow the pool lazily on demand,
+// not open all N connections up-front. Uses a bare TCP listener as a drop-in
+// sink so we can count the opened sockets without needing Docker or a real
+// Postgres / MySQL server.
+import { SQL } from "bun";
+import { describe, expect, test } from "bun:test";
+
+type Adapter = "postgres" | "mysql";
+
+function makeSink() {
+  let opened = 0;
+  const server = Bun.listen({
+    hostname: "127.0.0.1",
+    port: 0,
+    socket: {
+      open() {
+        opened++;
+      },
+      data() {},
+      close() {},
+      error() {},
+    },
+  });
+  return {
+    port: server.port,
+    [Symbol.dispose]() {
+      server.stop();
+    },
+    get opened() {
+      return opened;
+    },
+  };
+}
+
+describe.each(["postgres", "mysql"] as Adapter[])("%s connection pool grows lazily (#30632)", adapter => {
+  test("a single query only opens one TCP connection, not `max`", async () => {
+    using sink = makeSink();
+    await using sql = new SQL({
+      adapter,
+      host: "127.0.0.1",
+      port: sink.port,
+      username: "x",
+      database: "x",
+      max: 50,
+      connectionTimeout: 1,
+    });
+
+    // Query fails (nothing is speaking the DB protocol on the other end);
+    // we only care about how many sockets Bun opened.
+    await sql`SELECT 1`.catch(() => {});
+    expect(sink.opened).toBe(1);
+  });
+});
+
+// Followup from #30632 review (@claude-bot / @Lillious): when a connection
+// fails with a non-retryable auth error (unsupported auth method, bad
+// password, TLS refused, etc.), subsequent queries must fail fast with the
+// cached error — not keep opening new sockets to hit the same auth wall.
+// Uses a minimal fake server that answers the startup message with an
+// AuthenticationRequest carrying an unsupported auth code, which Bun rejects
+// as `ERR_POSTGRES_UNSUPPORTED_AUTHENTICATION_METHOD`.
+//
+// Returns the listener + a counter of opened sockets. Every client write
+// (the StartupMessage) gets an AuthenticationRequest with auth code 9
+// (SSPI), which Bun treats as an unsupported method.
+// Wire: 'R' (1 byte) + int32 length (4) + int32 auth code (4).
+function makeUnsupportedAuthPgServer() {
+  let opened = 0;
+  const server = Bun.listen({
+    hostname: "127.0.0.1",
+    port: 0,
+    socket: {
+      open() {
+        opened++;
+      },
+      data(socket) {
+        const buf = Buffer.alloc(9);
+        buf.write("R", 0);
+        buf.writeInt32BE(8, 1);
+        buf.writeInt32BE(9, 5);
+        socket.write(buf);
+      },
+      close() {},
+      error() {},
+    },
+  });
+  return {
+    port: server.port,
+    [Symbol.dispose]() {
+      server.stop();
+    },
+    get opened() {
+      return opened;
+    },
+  };
+}
+
+describe("postgres pool fast-fails on non-retryable auth errors (#30632)", () => {
+  test("repeated queries with a static password do not open more sockets after an auth failure", async () => {
+    using server = makeUnsupportedAuthPgServer();
+    await using sql = new SQL({
+      adapter: "postgres",
+      host: "127.0.0.1",
+      port: server.port,
+      username: "x",
+      database: "x",
+      max: 20,
+      connectionTimeout: 1,
+    });
+
+    // Fire 5 sequential queries. The first one opens a connection, the
+    // auth handshake fails, and the remaining 4 should reject immediately
+    // with the cached auth error — no extra sockets.
+    for (let i = 0; i < 5; i++) {
+      await sql`SELECT ${i}`.catch(() => {});
+    }
+    expect(server.opened).toBe(1);
+  });
+
+  test("function password retries auth on each new query (rotatable credentials)", async () => {
+    // When `password` is a function, Bun re-invokes it every time it opens
+    // a new TCP connection, so a rotated IAM token / Vault lease can take
+    // effect. Verify that after an initial auth failure, subsequent
+    // queries actually try again — even at `max: 1` where there's no room
+    // to grow the pool, which forces reuse of the existing closed slot.
+    using server = makeUnsupportedAuthPgServer();
+    await using sql = new SQL({
+      adapter: "postgres",
+      host: "127.0.0.1",
+      port: server.port,
+      username: "x",
+      database: "x",
+      max: 1,
+      connectionTimeout: 1,
+      password: () => "rotating-token",
+    });
+
+    for (let i = 0; i < 3; i++) {
+      await sql`SELECT ${i}`.catch(() => {});
+    }
+    // 3 attempts, each dialing fresh TCP on the same slot.
+    expect(server.opened).toBe(3);
+  });
+
+  test("synchronous `password()` throw does not hang subsequent queries", async () => {
+    // `createPooledConnectionHandle` in shared.ts defers a thrown
+    // `password()` to `onClose` via `process.nextTick`. This guards the
+    // no-hang contract: even if a future change made that path
+    // synchronous (so `release()` could drain the queue before
+    // `connect()` enqueues the waiter), both queries must still reject
+    // with the thrown error instead of hanging. The runner's default
+    // per-test timeout fails the test if anything hangs.
+    await using sql = new SQL({
+      adapter: "postgres",
+      host: "127.0.0.1",
+      port: 1,
+      username: "x",
+      database: "x",
+      max: 1,
+      password: () => {
+        throw new Error("boom");
+      },
+    });
+
+    for (let i = 0; i < 2; i++) {
+      let err: any;
+      try {
+        await sql`SELECT ${i}`;
+      } catch (e) {
+        err = e;
+      }
+      expect(err?.message).toBe("boom");
+    }
+  });
+});