diff --git a/docs/docs/building-apps/02-app-mempool.md b/docs/docs/building-apps/02-app-mempool.md
index b9e7dfbe410b..4eb150e8b085 100644
--- a/docs/docs/building-apps/02-app-mempool.md
+++ b/docs/docs/building-apps/02-app-mempool.md
@@ -51,3 +51,13 @@ Now that we have walked through the `PrepareProposal` & `ProcessProposal`, we ca
 There are countless designs that an application developer can write for a mempool, the core team opted to provide a simple implementation of a nonce mempool. The nonce mempool is a mempool that keeps transactions from an sorted by nonce in order to avoid the issues with nonces. 
 
 It works by storing the transation in a list sorted by the transaction nonce. When the proposer asks for transactions to be included in a block it randomly selects a sender and gets the first transaction in the list. It repeats this until the mempool is empty or the block is full. 
+
+### Configurations
+
+#### MaxTxs
+
+Its an integer value that sets the mempool in one of three modes, bounded, unbounded, or disabled.
+
+- **negative**: Disabled, mempool does not insert new tx and return early.
+- **zero**: Unbounded mempool has no tx limit and will never fail with ErrMempoolTxMaxCapacity.
+- **positive**: Bounded, it fails with ErrMempoolTxMaxCapacity when maxTx value is the same as CountTx()
diff --git a/server/config/config.go b/server/config/config.go
index 5775acc96c40..420aa6df7df1 100644
--- a/server/config/config.go
+++ b/server/config/config.go
@@ -166,6 +166,15 @@ type StateSyncConfig struct {
 	SnapshotKeepRecent uint32 `mapstructure:"snapshot-keep-recent"`
 }
 
+// MempoolConfig defines the configurations for the appside mempool
+type MempoolConfig struct {
+	// MaxTxs defines the behavior of the mempool. A negative value indicates
+	// the mempool is disabled entirely, zero indicates that the mempool is
+	// unbounded in how many txs it may contain, and a positive value indicates
+	// the maximum amount of txs it may contain.
+	MaxTxs int
+}
+
 type (
 	// StoreConfig defines application configuration for state streaming and other
 	// storage related operations.
@@ -200,6 +209,7 @@ type Config struct {
 	StateSync StateSyncConfig  `mapstructure:"state-sync"`
 	Store     StoreConfig      `mapstructure:"store"`
 	Streamers StreamersConfig  `mapstructure:"streamers"`
+	Mempool   MempoolConfig    `mapstructure:"mempool"`
 }
 
 // SetMinGasPrices sets the validator's minimum gas prices.
@@ -278,6 +288,9 @@ func DefaultConfig() *Config {
 				Keys: []string{"*"},
 			},
 		},
+		Mempool: MempoolConfig{
+			MaxTxs: 0,
+		},
 	}
 }
 
diff --git a/server/config/toml.go b/server/config/toml.go
index be79dbaeec2f..c23ea1c0fdae 100644
--- a/server/config/toml.go
+++ b/server/config/toml.go
@@ -212,6 +212,14 @@ streamers = [{{ range .Store.Streamers }}{{ printf "%q, " . }}{{end}}]
 keys = [{{ range .Streamers.File.Keys }}{{ printf "%q, " . }}{{end}}]
 write_dir = "{{ .Streamers.File.WriteDir }}"
 prefix = "{{ .Streamers.File.Prefix }}"
+
+###############################################################################
+###                         Mempool                                         ###
+###############################################################################
+
+[mempool]
+max-txs = "{{ .Mempool.MaxTxs }}"
+
 `
 
 var configTemplate *template.Template
diff --git a/server/start.go b/server/start.go
index 9ecb0cce6560..516a627ce9ed 100644
--- a/server/start.go
+++ b/server/start.go
@@ -28,6 +28,7 @@ import (
 	"github.com/cosmos/cosmos-sdk/server/types"
 	pruningtypes "github.com/cosmos/cosmos-sdk/store/pruning/types"
 	"github.com/cosmos/cosmos-sdk/telemetry"
+	"github.com/cosmos/cosmos-sdk/types/mempool"
 )
 
 const (
@@ -73,6 +74,9 @@ const (
 	flagGRPCAddress    = "grpc.address"
 	flagGRPCWebEnable  = "grpc-web.enable"
 	flagGRPCWebAddress = "grpc-web.address"
+
+	// mempool flags
+	FlagMempoolMaxTxs = "mempool.max-txs"
 )
 
 // StartCmd runs the service passed in, either stand-alone or in-process with
@@ -184,6 +188,8 @@ is performed. Note, when enabled, gRPC will also be automatically enabled.
 
 	cmd.Flags().Bool(FlagDisableIAVLFastNode, false, "Disable fast node for IAVL tree")
 
+	cmd.Flags().Int(FlagMempoolMaxTxs, mempool.DefaultMaxTx, "Sets MaxTx value for the app side mempool")
+
 	// add support for all Tendermint-specific command line options
 	tcmd.AddNodeFlags(cmd)
 	return cmd
diff --git a/simapp/simd/cmd/root.go b/simapp/simd/cmd/root.go
index f46f0d6fa055..859c53dba360 100644
--- a/simapp/simd/cmd/root.go
+++ b/simapp/simd/cmd/root.go
@@ -34,6 +34,7 @@ import (
 	snapshottypes "github.com/cosmos/cosmos-sdk/store/snapshots/types"
 	simtestutil "github.com/cosmos/cosmos-sdk/testutil/sims"
 	sdk "github.com/cosmos/cosmos-sdk/types"
+	"github.com/cosmos/cosmos-sdk/types/mempool"
 	authcmd "github.com/cosmos/cosmos-sdk/x/auth/client/cli"
 	"github.com/cosmos/cosmos-sdk/x/auth/types"
 	banktypes "github.com/cosmos/cosmos-sdk/x/bank/types"
@@ -307,6 +308,7 @@ func newApp(
 		baseapp.SetSnapshot(snapshotStore, snapshotOptions),
 		baseapp.SetIAVLCacheSize(cast.ToInt(appOpts.Get(server.FlagIAVLCacheSize))),
 		baseapp.SetIAVLDisableFastNode(cast.ToBool(appOpts.Get(server.FlagDisableIAVLFastNode))),
+		baseapp.SetMempool(mempool.NewSenderNonceMempool(mempool.SenderNonceMaxTxOpt(cast.ToInt(appOpts.Get(server.FlagMempoolMaxTxs))))),
 	)
 }
 
diff --git a/types/mempool/mempool.go b/types/mempool/mempool.go
index 6c957807675d..3413d7cc9f8f 100644
--- a/types/mempool/mempool.go
+++ b/types/mempool/mempool.go
@@ -36,4 +36,7 @@ type Iterator interface {
 	Tx() sdk.Tx
 }
 
-var ErrTxNotFound = errors.New("tx not found in mempool")
+var (
+	ErrTxNotFound           = errors.New("tx not found in mempool")
+	ErrMempoolTxMaxCapacity = errors.New("pool reached max tx capacity")
+)
diff --git a/types/mempool/sender_nonce.go b/types/mempool/sender_nonce.go
index 60d4608b93ca..956e2cce2fab 100644
--- a/types/mempool/sender_nonce.go
+++ b/types/mempool/sender_nonce.go
@@ -17,6 +17,8 @@ var (
 	_ Iterator = (*senderNonceMepoolIterator)(nil)
 )
 
+var DefaultMaxTx = 0
+
 // senderNonceMempool is a mempool that prioritizes transactions within a sender by nonce, the lowest first,
 // but selects a random sender on each iteration.  The mempool is iterated by:
 //
@@ -26,15 +28,27 @@ var (
 //
 // Note that PrepareProposal could choose to stop iteration before reaching the end if maxBytes is reached.
 type senderNonceMempool struct {
-	senders map[string]*skiplist.SkipList
-	rnd     *rand.Rand
+	senders    map[string]*skiplist.SkipList
+	rnd        *rand.Rand
+	maxTx      int
+	existingTx map[txKey]bool
+}
+
+type SenderNonceOptions func(mp *senderNonceMempool)
+
+type txKey struct {
+	address string
+	nonce   uint64
 }
 
 // NewSenderNonceMempool creates a new mempool that prioritizes transactions by nonce, the lowest first.
-func NewSenderNonceMempool() Mempool {
+func NewSenderNonceMempool(opts ...SenderNonceOptions) Mempool {
 	senderMap := make(map[string]*skiplist.SkipList)
+	existingTx := make(map[txKey]bool)
 	snp := &senderNonceMempool{
-		senders: senderMap,
+		senders:    senderMap,
+		maxTx:      DefaultMaxTx,
+		existingTx: existingTx,
 	}
 
 	var seed int64
@@ -44,17 +58,30 @@ func NewSenderNonceMempool() Mempool {
 	}
 	snp.setSeed(seed)
 
+	for _, opt := range opts {
+		opt(snp)
+	}
+
 	return snp
 }
 
-// NewSenderNonceMempoolWithSeed creates a new mempool that prioritizes transactions by nonce, the lowest first and sets the random seed.
-func NewSenderNonceMempoolWithSeed(seed int64) Mempool {
-	senderMap := make(map[string]*skiplist.SkipList)
-	snp := &senderNonceMempool{
-		senders: senderMap,
+// SenderNonceSeedOpt Option To add a Seed for random type when calling the constructor NewSenderNonceMempool
+// Example:
+// > random_seed := int64(1000)
+// > NewSenderNonceMempool(SenderNonceSeedTxOpt(random_seed))
+func SenderNonceSeedOpt(seed int64) SenderNonceOptions {
+	return func(snp *senderNonceMempool) {
+		snp.setSeed(seed)
+	}
+}
+
+// SenderNonceMaxTxOpt Option To set limit of max tx when calling the constructor NewSenderNonceMempool
+// Example:
+// > NewSenderNonceMempool(SenderNonceMaxTxOpt(100))
+func SenderNonceMaxTxOpt(maxTx int) SenderNonceOptions {
+	return func(snp *senderNonceMempool) {
+		snp.maxTx = maxTx
 	}
-	snp.setSeed(seed)
-	return snp
 }
 
 func (snm *senderNonceMempool) setSeed(seed int64) {
@@ -65,6 +92,12 @@ func (snm *senderNonceMempool) setSeed(seed int64) {
 // Insert adds a tx to the mempool. It returns an error if the tx does not have at least one signer.
 // priority is ignored.
 func (snm *senderNonceMempool) Insert(_ sdk.Context, tx sdk.Tx) error {
+	if snm.maxTx > 0 && snm.CountTx() >= snm.maxTx {
+		return ErrMempoolTxMaxCapacity
+	}
+	if snm.maxTx < 0 {
+		return nil
+	}
 	sigs, err := tx.(signing.SigVerifiableTx).GetSignaturesV2()
 	if err != nil {
 		return err
@@ -82,7 +115,8 @@ func (snm *senderNonceMempool) Insert(_ sdk.Context, tx sdk.Tx) error {
 		snm.senders[sender] = senderTxs
 	}
 	senderTxs.Set(nonce, tx)
-
+	key := txKey{nonce: nonce, address: sender}
+	snm.existingTx[key] = true
 	return nil
 }
 
@@ -117,14 +151,7 @@ func (snm *senderNonceMempool) Select(_ sdk.Context, _ [][]byte) Iterator {
 
 // CountTx returns the total count of txs in the mempool.
 func (snm *senderNonceMempool) CountTx() int {
-	count := 0
-
-	// Disable gosec here since we need neither strong randomness nor deterministic iteration.
-	// #nosec
-	for _, value := range snm.senders {
-		count += value.Len()
-	}
-	return count
+	return len(snm.existingTx)
 }
 
 // Remove removes a tx from the mempool. It returns an error if the tx does not have at least one signer or the tx
@@ -154,6 +181,10 @@ func (snm *senderNonceMempool) Remove(tx sdk.Tx) error {
 	if senderTxs.Len() == 0 {
 		delete(snm.senders, sender)
 	}
+
+	key := txKey{nonce: nonce, address: sender}
+	delete(snm.existingTx, key)
+
 	return nil
 }
 
diff --git a/types/mempool/sender_nonce_property_test.go b/types/mempool/sender_nonce_property_test.go
index e0bf716edcfa..28e98a64d6ea 100644
--- a/types/mempool/sender_nonce_property_test.go
+++ b/types/mempool/sender_nonce_property_test.go
@@ -1,7 +1,6 @@
 package mempool_test
 
 import (
-	"math/rand"
 	"sort"
 
 	"pgregory.net/rapid"
@@ -9,7 +8,6 @@ import (
 	cryptotypes "github.com/cosmos/cosmos-sdk/crypto/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	mempool "github.com/cosmos/cosmos-sdk/types/mempool"
-	simtypes "github.com/cosmos/cosmos-sdk/types/simulation"
 	"github.com/cosmos/cosmos-sdk/x/auth/signing"
 	"github.com/stretchr/testify/require"
 	"github.com/tendermint/tendermint/libs/log"
@@ -27,18 +25,20 @@ var (
 // same elements input on the mempool should be in the output except for sender nonce duplicates, which are overwritten by the later duplicate entries.
 // for every sender transaction tx_n, tx_0.nonce < tx_1.nonce ... < tx_n.nonce
 
-var genAddress = rapid.Custom(func(t *rapid.T) simtypes.Account {
-	accounts := simtypes.RandomAccounts(rand.New(rand.NewSource(rapid.Int64().Draw(t, "seed for account"))), 1)
-	return accounts[0]
-})
+func AddressGenerator(t *rapid.T) *rapid.Generator[sdk.AccAddress] {
+	return rapid.Custom(func(t *rapid.T) sdk.AccAddress {
+		pkBz := rapid.SliceOfN(rapid.Byte(), 20, 20).Draw(t, "hex")
+		return sdk.AccAddress(pkBz)
+	})
+}
 
 func testMempoolProperties(t *rapid.T) {
 
 	ctx := sdk.NewContext(nil, tmproto.Header{}, false, log.NewNopLogger())
 	mp := mempool.NewSenderNonceMempool()
 
-	genMultipleAddress := rapid.SliceOfNDistinct(genAddress, 1, 10, func(acc simtypes.Account) string {
-		return acc.Address.String()
+	genMultipleAddress := rapid.SliceOfNDistinct(AddressGenerator(t), 1, 10, func(acc sdk.AccAddress) string {
+		return acc.String()
 	})
 
 	accounts := genMultipleAddress.Draw(t, "address")
@@ -46,10 +46,10 @@ func testMempoolProperties(t *rapid.T) {
 		return testTx{
 			priority: rapid.Int64Range(0, 1000).Draw(t, "priority"),
 			nonce:    rapid.Uint64().Draw(t, "nonce"),
-			address:  rapid.SampledFrom(accounts).Draw(t, "acc").Address,
+			address:  rapid.SampledFrom(accounts).Draw(t, "acc"),
 		}
 	})
-	genMultipleTX := rapid.SliceOfN(genTx, 1, 500)
+	genMultipleTX := rapid.SliceOfN(genTx, 1, 5000)
 
 	txs := genMultipleTX.Draw(t, "txs")
 	senderTxRaw := getSenderTxMap(txs)
@@ -61,6 +61,7 @@ func testMempoolProperties(t *rapid.T) {
 
 	iter := mp.Select(ctx, nil)
 	orderTx := fetchAllTxs(iter)
+	require.Equal(t, len(orderTx), mp.CountTx())
 	senderTxOrdered := getSenderTxMap(orderTx)
 	for key := range senderTxOrdered {
 		ordered, found := senderTxOrdered[key]
diff --git a/types/mempool/sender_nonce_test.go b/types/mempool/sender_nonce_test.go
index 9b4a52926eef..b001b5cb1fa8 100644
--- a/types/mempool/sender_nonce_test.go
+++ b/types/mempool/sender_nonce_test.go
@@ -114,7 +114,7 @@ func (s *MempoolTestSuite) TestTxOrder() {
 	}
 	for i, tt := range tests {
 		t.Run(fmt.Sprintf("case %d", i), func(t *testing.T) {
-			pool := mempool.NewSenderNonceMempoolWithSeed(tt.seed)
+			pool := mempool.NewSenderNonceMempool(mempool.SenderNonceSeedOpt(tt.seed))
 			// create test txs and insert into mempool
 			for i, ts := range tt.txs {
 				tx := testTx{id: i, priority: int64(ts.p), nonce: uint64(ts.n), address: ts.a}
@@ -137,3 +137,60 @@ func (s *MempoolTestSuite) TestTxOrder() {
 		})
 	}
 }
+
+func (s *MempoolTestSuite) TestMaxTx() {
+	t := s.T()
+	ctx := sdk.NewContext(nil, tmproto.Header{}, false, log.NewNopLogger())
+	accounts := simtypes.RandomAccounts(rand.New(rand.NewSource(0)), 1)
+	mp := mempool.NewSenderNonceMempool(mempool.SenderNonceMaxTxOpt(1))
+
+	tx := testTx{
+		nonce:    0,
+		address:  accounts[0].Address,
+		priority: rand.Int63(),
+	}
+	tx2 := testTx{
+		nonce:    1,
+		address:  accounts[0].Address,
+		priority: rand.Int63(),
+	}
+
+	// empty mempool behavior
+	require.Equal(t, 0, s.mempool.CountTx())
+	itr := mp.Select(ctx, nil)
+	require.Nil(t, itr)
+
+	ctx = ctx.WithPriority(tx.priority)
+	err := mp.Insert(ctx, tx)
+	require.NoError(t, err)
+	ctx = ctx.WithPriority(tx.priority)
+	err = mp.Insert(ctx, tx2)
+	require.Equal(t, mempool.ErrMempoolTxMaxCapacity, err)
+
+}
+
+func (s *MempoolTestSuite) TestTxNotFoundOnSender() {
+	t := s.T()
+	ctx := sdk.NewContext(nil, tmproto.Header{}, false, log.NewNopLogger())
+	accounts := simtypes.RandomAccounts(rand.New(rand.NewSource(0)), 1)
+	mp := mempool.NewSenderNonceMempool()
+
+	txSender := testTx{
+		nonce:    0,
+		address:  accounts[0].Address,
+		priority: rand.Int63(),
+	}
+
+	tx := testTx{
+		nonce:    1,
+		address:  accounts[0].Address,
+		priority: rand.Int63(),
+	}
+
+	ctx = ctx.WithPriority(tx.priority)
+	err := mp.Insert(ctx, txSender)
+	require.NoError(t, err)
+	err = mp.Remove(tx)
+	require.Equal(t, mempool.ErrTxNotFound, err)
+
+}