diff --git a/python/sglang/srt/managers/policy_scheduler.py b/python/sglang/srt/managers/policy_scheduler.py
index 925b74b91..4fd0ea290 100644
--- a/python/sglang/srt/managers/policy_scheduler.py
+++ b/python/sglang/srt/managers/policy_scheduler.py
@@ -18,12 +18,16 @@ limitations under the License.
 import random
 from collections import defaultdict
 from contextlib import contextmanager
-from typing import Dict, List
+from typing import Dict, List, Optional
 
 from sglang.srt.managers.schedule_batch import Req, ScheduleBatch
 from sglang.srt.mem_cache.base_prefix_cache import BasePrefixCache
 from sglang.srt.mem_cache.radix_cache import TreeNode
 
+# Clip the max new tokens for the request whose max_new_tokens is very large.
+# This can prevent the server from being too conservative.
+CLIP_MAX_NEW_TOKENS = 4096
+
 
 class PolicyScheduler:
     def __init__(self, policy: str, tree_cache: BasePrefixCache):
@@ -98,7 +102,7 @@ class PrefillAdder:
         tree_cache: BasePrefixCache,
         rem_total_tokens: int,
         rem_input_tokens: int,
-        rem_chunk_tokens: int,
+        rem_chunk_tokens: Optional[int],
     ):
         self.tree_cache = tree_cache
         self.rem_total_tokens = rem_total_tokens
@@ -126,7 +130,11 @@ class PrefillAdder:
     ):
         self.rem_total_tokens -= sum(
             [
-                (r.sampling_params.max_new_tokens - len(r.output_ids)) * new_token_ratio
+                min(
+                    (r.sampling_params.max_new_tokens - len(r.output_ids)),
+                    CLIP_MAX_NEW_TOKENS,
+                )
+                * new_token_ratio
                 for r in running_batch.reqs
             ]
         )
@@ -151,7 +159,11 @@ class PrefillAdder:
         self._prefill_one_req(
             len(req.prefix_indices),
             req.extend_input_len,
-            req.sampling_params.max_new_tokens if not truncated else 0,
+            (
+                min(req.sampling_params.max_new_tokens, CLIP_MAX_NEW_TOKENS)
+                if not truncated
+                else 0
+            ),
         )
 
         # Return if chunked prefill not finished
@@ -168,7 +180,9 @@ class PrefillAdder:
             self.rem_total_tokens += delta
 
     def add_one_req(self, req: Req):
-        total_tokens = req.extend_input_len + req.sampling_params.max_new_tokens
+        total_tokens = req.extend_input_len + min(
+            req.sampling_params.max_new_tokens, CLIP_MAX_NEW_TOKENS
+        )
         input_tokens = req.extend_input_len
         prefix_len = len(req.prefix_indices)
 
@@ -191,7 +205,9 @@ class PrefillAdder:
                 self.can_run_list.append(req)
                 self.tree_cache.inc_lock_ref(req.last_node)
                 self._prefill_one_req(
-                    prefix_len, input_tokens, req.sampling_params.max_new_tokens
+                    prefix_len,
+                    input_tokens,
+                    min(req.sampling_params.max_new_tokens, CLIP_MAX_NEW_TOKENS),
                 )
             else:
                 # Chunked prefill