diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1603b2a..d02db6b 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,9 @@
 
 - Fixed a bug when `server:grep_log()` failed to find a string logged in
   `server:exec()` called immediately before it (gh-421).
+- Fixed `cluster:sync()` to drop instances removed from the config. It is
+  now possible to reload the config with `cluster:reload()` after removing
+  an instance (gh-423).
 
 ## 1.1.0
 
diff --git a/luatest/cluster.lua b/luatest/cluster.lua
index 28ca9bc..789b188 100644
--- a/luatest/cluster.lua
+++ b/luatest/cluster.lua
@@ -197,6 +197,7 @@ end
 --
 -- * Write the new config into the config file.
 -- * Update the internal list of instances.
+-- * Drops instances removed from the config.
 --
 -- @tab config New config.
 function Cluster:sync(config)
@@ -206,16 +207,26 @@ function Cluster:sync(config)
 
     treegen.write_file(self._dir, self._config_file_rel, yaml.encode(config))
 
-    for i, name in ipairs(instance_names) do
-        if self._server_map[name] == nil then
-            local iserver = server:new(fun.chain(self._server_opts, {
+    local old_server_map = self._server_map
+    self._server_map = {}
+    self._servers = {}
+
+    for _, name in ipairs(instance_names) do
+        local iserver = old_server_map[name]
+        if iserver == nil then
+            iserver = server:new(fun.chain(self._server_opts, {
                 alias = name,
             }):tomap())
-            table.insert(self._servers, i, iserver)
-            self._server_map[name] = iserver
+        else
+            old_server_map[name] = nil
         end
+        self._server_map[name] = iserver
+        table.insert(self._servers, iserver)
     end
 
+    for _, iserver in pairs(old_server_map) do
+        iserver:drop()
+    end
 end
 
 --- Reload configuration on all the instances.
diff --git a/test/cluster_test.lua b/test/cluster_test.lua
index 51bdf7f..9dcab5d 100644
--- a/test/cluster_test.lua
+++ b/test/cluster_test.lua
@@ -133,34 +133,41 @@ g.test_sync = function()
         :use_group('g-001')
         :use_replicaset('r-001')
         :add_instance('i-001', {})
+        :use_replicaset('r-002')
+        :add_instance('i-002', {})
         :config()
 
     local c = cluster:new(config, server_opts)
 
-    t.assert_equals(c:size(), 1)
+    t.assert_equals(c:size(), 2)
 
     c:start()
-    assert_instance_running(c, 'i-001')
 
-    c:stop()
-    assert_instance_stopped(c, 'i-001')
+    local server1 = c['i-001']
+    local server2 = c['i-002']
+    t.assert_is_not(server1.process, nil)
+    t.assert_is_not(server2.process, nil)
 
     local config2 = cbuilder:new()
         :use_group('g-001')
-        :use_replicaset('r-001')
+        :use_replicaset('r-002')
         :add_instance('i-002', {})
 
         :use_group('g-002')
-        :use_replicaset('r-002')
+        :use_replicaset('r-003')
         :add_instance('i-003', {})
 
         :config()
 
     c:sync(config2)
 
-    t.assert_equals(c:size(), 3)
+    t.assert_is(c['i-001'], nil)
+    t.assert_is(c['i-002'], server2)
+    t.assert_is(server1.process, nil)
+    t.assert_is_not(server2.process, nil)
+
+    t.assert_equals(c:size(), 2)
 
-    c:start_instance('i-002')
     c:start_instance('i-003')
     assert_instance_running(c, 'i-002')
     assert_instance_running(c, 'i-003')