diff --git a/boards/sim/sim/sim/configs/tcploop/defconfig b/boards/sim/sim/sim/configs/tcploop/defconfig
index 888c68c77d..00c9d7eae0 100644
--- a/boards/sim/sim/sim/configs/tcploop/defconfig
+++ b/boards/sim/sim/sim/configs/tcploop/defconfig
@@ -45,6 +45,7 @@ CONFIG_NETDEVICES=y
 CONFIG_NET_IPv6=y
 CONFIG_NET_IPv6_NCONF_ENTRIES=4
 CONFIG_NET_LOOPBACK=y
+CONFIG_NET_LOOPBACK_PKTSIZE=1500
 CONFIG_NET_MAX_LISTENPORTS=16
 CONFIG_NET_SOCKOPTS=y
 CONFIG_NET_TCP=y
diff --git a/drivers/net/loopback.c b/drivers/net/loopback.c
index 88a5d057c3..36ae9f2247 100644
--- a/drivers/net/loopback.c
+++ b/drivers/net/loopback.c
@@ -54,6 +54,7 @@
 #include <nuttx/irq.h>
 #include <nuttx/wdog.h>
 #include <nuttx/wqueue.h>
+#include <nuttx/net/netconfig.h>
 #include <nuttx/net/netdev.h>
 #include <nuttx/net/ip.h>
 #include <nuttx/net/loopback.h>
@@ -108,7 +109,7 @@ struct lo_driver_s
  ****************************************************************************/
 
 static struct lo_driver_s g_loopback;
-static uint8_t g_iobuffer[MAX_NETDEV_PKTSIZE + CONFIG_NET_GUARDSIZE];
+static uint8_t g_iobuffer[NET_LO_PKTSIZE + CONFIG_NET_GUARDSIZE];
 
 /****************************************************************************
  * Private Function Prototypes
diff --git a/include/nuttx/net/netconfig.h b/include/nuttx/net/netconfig.h
index 1fdb71fff9..7ed1dbd055 100644
--- a/include/nuttx/net/netconfig.h
+++ b/include/nuttx/net/netconfig.h
@@ -184,9 +184,21 @@
 #define MIN_NETDEV_PKTSIZE      _MIN_6LOWPAN_PKTSIZE
 #define MAX_NETDEV_PKTSIZE      _MAX_6LOWPAN_PKTSIZE
 
-/* For the loopback device, we will use the largest MTU */
+/* The loopback driver packet buffer should be quite large.  The larger the
+ * loopback packet buffer, the better will be TCP performance of the loopback
+ * transfers.  The Linux loopback device historically used packet buffers of
+ * size 16Kb, but that was increased in recent Linux versions to 64Kb.  Those
+ * sizes may be excessive for resource constrained MCUs, however.
+ *
+ * For the loopback driver, we enforce a lower limit that is the maximum
+ * packet size of all enabled link layer protocols.
+ */
 
+#if CONFIG_NET_LOOPBACK_PKTSIZE < MAX_NETDEV_PKTSIZE
 #  define NET_LO_PKTSIZE        MAX_NETDEV_PKTSIZE
+#else
+#  define NET_LO_PKTSIZE        CONFIG_NET_LOOPBACK_PKTSIZE
+#endif
 
 /* Layer 3/4 Configuration Options ******************************************/
 
@@ -206,7 +218,7 @@
    * of the timer is 8-bits.
    */
 
-#    define CONFIG_NET_TCP_REASS_MAXAGE (20*10) /* 20 seconds */
+#    define CONFIG_NET_TCP_REASS_MAXAGE (20 * 10) /* 20 seconds */
 #  endif
 #endif
 
diff --git a/net/Kconfig b/net/Kconfig
index fffbfa8b27..5019cd5da3 100644
--- a/net/Kconfig
+++ b/net/Kconfig
@@ -132,6 +132,24 @@ config NET_LOOPBACK
 	---help---
 		Add support for the local network loopback device, lo.
 
+config NET_LOOPBACK_PKTSIZE
+	int "Loopback packet buffer size"
+	default 0
+	depends on NET_LOOPBACK
+	range 0 65535
+	---help---
+		The loopback driver packet buffer should be quite large.  The larger
+		the loopback packet buffer, the better will be TCP performance of
+		the loopback transfers.  The Linux loopback device historically used
+		packet buffers of size 16Kb, but that was increased in recent Linux
+		versions to 64Kb.  Those sizes may be excessive for resource
+		constrained MCUs, however.
+
+		The network enforces a lower limit that is the maximum packet size
+		of all enabled link layer protocols.  The default value of
+		CONFIG_NET_LOOPBACK_PKTSIZE is zero, meaning that this maximum
+		packet size will be used by loopback driver.
+
 menuconfig NET_SLIP
 	bool "SLIP support"
 	select ARCH_HAVE_NETDEV_STATISTICS