diff --git a/common/kotlinx-coroutines-core-common/src/Dispatched.kt b/common/kotlinx-coroutines-core-common/src/Dispatched.kt
index 32ee51f0a2..d7f7a97717 100644
--- a/common/kotlinx-coroutines-core-common/src/Dispatched.kt
+++ b/common/kotlinx-coroutines-core-common/src/Dispatched.kt
@@ -21,26 +21,40 @@ internal object UndispatchedEventLoop {
     @JvmField
     internal val threadLocalEventLoop = CommonThreadLocal { EventLoop() }
 
-    inline fun execute(continuation: DispatchedContinuation<*>, contState: Any?, mode: Int, block: () -> Unit) {
+    /**
+     * Executes given [block] as part of current event loop, updating related to block [continuation]
+     * mode and state if continuation is not resumed immediately.
+     * [doYield] indicates whether current continuation is yielding (to provide fast-path if event-loop is empty).
+     * Returns `true` if execution of continuation was queued (trampolined) or `false` otherwise.
+     */
+    inline fun execute(continuation: DispatchedContinuation<*>, contState: Any?, mode: Int,
+                       doYield: Boolean = false, block: () -> Unit) : Boolean {
         val eventLoop = threadLocalEventLoop.get()
         if (eventLoop.isActive) {
+            // If we are yielding and queue is empty, we can bail out as part of fast path
+            if (doYield && eventLoop.queue.isEmpty) {
+                return false
+            }
+
             continuation._state = contState
             continuation.resumeMode = mode
             eventLoop.queue.addLast(continuation)
-            return
+            return true
         }
 
         runEventLoop(eventLoop, block)
+        return false
     }
 
-    fun resumeUndispatched(task: DispatchedTask<*>) {
+    fun resumeUndispatched(task: DispatchedTask<*>): Boolean {
         val eventLoop = threadLocalEventLoop.get()
         if (eventLoop.isActive) {
             eventLoop.queue.addLast(task)
-            return
+            return true
         }
 
         runEventLoop(eventLoop, { task.resume(task.delegate, MODE_UNDISPATCHED) })
+        return false
     }
 
     inline fun runEventLoop(eventLoop: EventLoop, block: () -> Unit) {
@@ -227,6 +241,11 @@ internal interface DispatchedTask<in T> : Runnable {
     }
 }
 
+internal fun DispatchedContinuation<Unit>.yieldUndispatched(): Boolean =
+    UndispatchedEventLoop.execute(this, Unit, MODE_CANCELLABLE, doYield = true) {
+        run()
+    }
+
 internal fun <T> DispatchedTask<T>.dispatch(mode: Int = MODE_CANCELLABLE) {
     val delegate = this.delegate
     if (mode.isDispatchedMode && delegate is DispatchedContinuation<*> && mode.isCancellableMode == resumeMode.isCancellableMode) {
diff --git a/common/kotlinx-coroutines-core-common/src/Yield.kt b/common/kotlinx-coroutines-core-common/src/Yield.kt
index 632dcba0b0..78ab27fb87 100644
--- a/common/kotlinx-coroutines-core-common/src/Yield.kt
+++ b/common/kotlinx-coroutines-core-common/src/Yield.kt
@@ -19,7 +19,9 @@ public suspend fun yield(): Unit = suspendCoroutineUninterceptedOrReturn sc@ { u
     val context = uCont.context
     context.checkCompletion()
     val cont = uCont.intercepted() as? DispatchedContinuation<Unit> ?: return@sc Unit
-    if (!cont.dispatcher.isDispatchNeeded(context)) return@sc Unit
+    if (!cont.dispatcher.isDispatchNeeded(context)) {
+        return@sc if (cont.yieldUndispatched()) COROUTINE_SUSPENDED else Unit
+    }
     cont.dispatchYield(Unit)
     COROUTINE_SUSPENDED
 }
diff --git a/common/kotlinx-coroutines-core-common/src/internal/ArrayQueue.kt b/common/kotlinx-coroutines-core-common/src/internal/ArrayQueue.kt
index a6bf8f6180..5cfb8e8df1 100644
--- a/common/kotlinx-coroutines-core-common/src/internal/ArrayQueue.kt
+++ b/common/kotlinx-coroutines-core-common/src/internal/ArrayQueue.kt
@@ -8,6 +8,7 @@ internal class ArrayQueue<T : Any> {
     private var elements = arrayOfNulls<Any>(16)
     private var head = 0
     private var tail = 0
+    val isEmpty: Boolean get() = head == tail
 
     public fun addLast(element: T) {
         elements[tail] = element
diff --git a/common/kotlinx-coroutines-core-common/test/UnconfinedTest.kt b/common/kotlinx-coroutines-core-common/test/UnconfinedTest.kt
index 8866057a09..f37c35657c 100644
--- a/common/kotlinx-coroutines-core-common/test/UnconfinedTest.kt
+++ b/common/kotlinx-coroutines-core-common/test/UnconfinedTest.kt
@@ -54,7 +54,7 @@ class UnconfinedTest : TestBase() {
     }
 
     @Test
-    fun enterMultipleTimes() = runTest {
+    fun testEnterMultipleTimes() = runTest {
         launch(Unconfined) {
             expect(1)
         }
@@ -70,5 +70,46 @@ class UnconfinedTest : TestBase() {
         finish(4)
     }
 
+    @Test
+    fun testYield() = runTest {
+        expect(1)
+        launch(Dispatchers.Unconfined) {
+            expect(2)
+            yield()
+            launch {
+                expect(4)
+            }
+            expect(3)
+            yield()
+            expect(5)
+        }.join()
+
+        finish(6)
+    }
+
+    @Test
+    fun testCancellationWihYields() = runTest {
+        expect(1)
+        GlobalScope.launch(Dispatchers.Unconfined) {
+            val job = coroutineContext[Job]!!
+            expect(2)
+            yield()
+            GlobalScope.launch(Dispatchers.Unconfined) {
+                expect(4)
+                job.cancel()
+                expect(5)
+            }
+            expect(3)
+
+            try {
+                yield()
+            } finally {
+                expect(6)
+            }
+        }
+
+        finish(7)
+    }
+
     class TestException : Throwable()
 }