diff --git a/cpp/src/arrow/io/buffered.cc b/cpp/src/arrow/io/buffered.cc
index c53b3d223d4c0..b41e4257af215 100644
--- a/cpp/src/arrow/io/buffered.cc
+++ b/cpp/src/arrow/io/buffered.cc
@@ -282,6 +282,8 @@ class BufferedInputStream::Impl : public BufferedBase {
     return raw_pos_ - bytes_buffered_;
   }
 
+  // Resize internal read buffer. Note that the internal buffer-size
+  // should be not larger than the raw_read_bound_.
   Status SetBufferSize(int64_t new_buffer_size) {
     if (new_buffer_size <= 0) {
       return Status::Invalid("Buffer size should be positive");
@@ -289,6 +291,11 @@ class BufferedInputStream::Impl : public BufferedBase {
     if ((buffer_pos_ + bytes_buffered_) >= new_buffer_size) {
       return Status::Invalid("Cannot shrink read buffer if buffered data remains");
     }
+    if (raw_read_bound_ >= 0) {
+      // No need to reserve space for more than the total remaining number of bytes.
+      new_buffer_size = std::min(new_buffer_size,
+                                 bytes_buffered_ + (raw_read_bound_ - raw_read_total_));
+    }
     return ResizeBuffer(new_buffer_size);
   }
 
@@ -433,6 +440,8 @@ class BufferedInputStream::Impl : public BufferedBase {
  private:
   std::shared_ptr<InputStream> raw_;
   int64_t raw_read_total_;
+  // a bound on the maximum number of bytes to read from the raw input stream.
+  // The default -1 indicates that it is unbounded
   int64_t raw_read_bound_;
 
   // Number of remaining bytes in the buffer, to be reduced on each read from
diff --git a/cpp/src/arrow/io/buffered_test.cc b/cpp/src/arrow/io/buffered_test.cc
index 82feeea0517fd..cbf2c2cf06938 100644
--- a/cpp/src/arrow/io/buffered_test.cc
+++ b/cpp/src/arrow/io/buffered_test.cc
@@ -329,7 +329,8 @@ class TestBufferedInputStream : public FileTestFixture<BufferedInputStream> {
     local_pool_ = MemoryPool::CreateDefault();
   }
 
-  void MakeExample1(int64_t buffer_size, MemoryPool* pool = default_memory_pool()) {
+  void MakeExample1(int64_t buffer_size, MemoryPool* pool = default_memory_pool(),
+                    int64_t raw_read_bound = -1) {
     test_data_ = kExample1;
 
     ASSERT_OK_AND_ASSIGN(auto file_out, FileOutputStream::Open(path_));
@@ -338,7 +339,8 @@ class TestBufferedInputStream : public FileTestFixture<BufferedInputStream> {
 
     ASSERT_OK_AND_ASSIGN(auto file_in, ReadableFile::Open(path_));
     raw_ = file_in;
-    ASSERT_OK_AND_ASSIGN(buffered_, BufferedInputStream::Create(buffer_size, pool, raw_));
+    ASSERT_OK_AND_ASSIGN(
+        buffered_, BufferedInputStream::Create(buffer_size, pool, raw_, raw_read_bound));
   }
 
  protected:
@@ -472,6 +474,23 @@ TEST_F(TestBufferedInputStream, SetBufferSize) {
   ASSERT_OK(buffered_->SetBufferSize(5));
 }
 
+// GH-43060: Internal buffer should not greater than the
+// bytes could buffer.
+TEST_F(TestBufferedInputStream, BufferSizeLimit) {
+  {
+    // Buffer size should not exceeds raw_read_bound
+    MakeExample1(/*buffer_size=*/100000, default_memory_pool(), /*raw_read_bound=*/15);
+    EXPECT_EQ(15, buffered_->buffer_size());
+  }
+  {
+    // Set a buffer size after read.
+    MakeExample1(/*buffer_size=*/10, default_memory_pool(), /*raw_read_bound=*/15);
+    ASSERT_OK(buffered_->Read(10));
+    ASSERT_OK(buffered_->SetBufferSize(/*new_buffer_size=*/100000));
+    EXPECT_EQ(5, buffered_->buffer_size());
+  }
+}
+
 class TestBufferedInputStreamBound : public ::testing::Test {
  public:
   void SetUp() { CreateExample(/*bounded=*/true); }