diff --git a/kotlinx-coroutines-core/jvm/src/CoroutineContext.kt b/kotlinx-coroutines-core/jvm/src/CoroutineContext.kt
index e08b805295..f088430f7b 100644
--- a/kotlinx-coroutines-core/jvm/src/CoroutineContext.kt
+++ b/kotlinx-coroutines-core/jvm/src/CoroutineContext.kt
@@ -181,6 +181,37 @@ internal actual class UndispatchedCoroutine<in T>actual constructor (
      */
     private var threadStateToRecover = ThreadLocal<Pair<CoroutineContext, Any?>>()
 
+    init {
+        /*
+         * This is a hack for a very specific case in #2930 unless #3253 is implemented.
+         * 'ThreadLocalStressTest' covers this change properly.
+         *
+         * The scenario this change covers is the following:
+         * 1) The coroutine is being started as plain non kotlinx.coroutines related suspend function,
+         *    e.g. `suspend fun main` or, more importantly, Ktor `SuspendFunGun`, that is invoking
+         *    `withContext(tlElement)` which creates `UndispatchedCoroutine`.
+         * 2) It (original continuation) is then not wrapped into `DispatchedContinuation` via `intercept()`
+         *    and goes neither through `DC.run` nor through `resumeUndispatchedWith` that both
+         *    do thread context element tracking.
+         * 3) So thread locals never got chance to get properly set up via `saveThreadContext`,
+         *    but when `withContext` finishes, it attempts to recover thread locals in its `afterResume`.
+         *
+         * Here we detect precisely this situation and properly setup context to recover later.
+         *
+         */
+        if (uCont.context[ContinuationInterceptor] !is CoroutineDispatcher) {
+            /*
+             * We cannot just "read" the elements as there is no such API,
+             * so we update-restore it immediately and use the intermediate value
+             * as the initial state, leveraging the fact that thread context element
+             * is idempotent and such situations are increasingly rare.
+             */
+            val values = updateThreadContext(context, null)
+            restoreThreadContext(context, values)
+            threadStateToRecover.set(context to values)
+        }
+    }
+
     fun saveThreadContext(context: CoroutineContext, oldValue: Any?) {
         threadStateToRecover.set(context to oldValue)
     }
diff --git a/kotlinx-coroutines-core/jvm/test/ThreadLocalStressTest.kt b/kotlinx-coroutines-core/jvm/test/ThreadLocalStressTest.kt
index f9941d0215..169b077674 100644
--- a/kotlinx-coroutines-core/jvm/test/ThreadLocalStressTest.kt
+++ b/kotlinx-coroutines-core/jvm/test/ThreadLocalStressTest.kt
@@ -4,6 +4,10 @@
 
 package kotlinx.coroutines
 
+import kotlinx.coroutines.sync.*
+import java.util.concurrent.*
+import kotlin.coroutines.*
+import kotlin.coroutines.intrinsics.*
 import kotlin.test.*
 
 
@@ -63,10 +67,99 @@ class ThreadLocalStressTest : TestBase() {
             withContext(threadLocal.asContextElement("foo")) {
                 yield()
                 cancel()
-                suspendCancellableCoroutineReusable<Unit> {  }
+                suspendCancellableCoroutineReusable<Unit> { }
             }
         } finally {
             assertEquals(expectedValue, threadLocal.get())
         }
     }
+
+    /*
+     * Another set of tests for undispatcheable continuations that do not require stress test multiplier.
+     * Also note that `uncaughtExceptionHandler` is used as the only available mechanism to propagate error from
+     * `resumeWith`
+     */
+
+    @Test
+    fun testNonDispatcheableLeak() {
+        repeat(100) {
+            doTestWithPreparation(
+                ::doTest,
+                { threadLocal.set(null) }) { threadLocal.get() != null }
+            assertNull(threadLocal.get())
+        }
+    }
+
+    @Test
+    fun testNonDispatcheableLeakWithInitial() {
+        repeat(100) {
+            doTestWithPreparation(::doTest, { threadLocal.set("initial") }) { threadLocal.get() != "initial" }
+            assertEquals("initial", threadLocal.get())
+        }
+    }
+
+    @Test
+    fun testNonDispatcheableLeakWithContextSwitch() {
+        repeat(100) {
+            doTestWithPreparation(
+                ::doTestWithContextSwitch,
+                { threadLocal.set(null) }) { threadLocal.get() != null }
+            assertNull(threadLocal.get())
+        }
+    }
+
+    @Test
+    fun testNonDispatcheableLeakWithInitialWithContextSwitch() {
+        repeat(100) {
+            doTestWithPreparation(
+                ::doTestWithContextSwitch,
+                { threadLocal.set("initial") }) { false /* can randomly wake up on the non-main thread */ }
+            // Here we are always on the main thread
+            assertEquals("initial", threadLocal.get())
+        }
+    }
+
+    private fun doTestWithPreparation(testBody: suspend () -> Unit, setup: () -> Unit, isInvalid: () -> Boolean) {
+        setup()
+        val latch = CountDownLatch(1)
+        testBody.startCoroutineUninterceptedOrReturn(Continuation(EmptyCoroutineContext) {
+            if (isInvalid()) {
+                Thread.currentThread().uncaughtExceptionHandler.uncaughtException(
+                    Thread.currentThread(),
+                    IllegalStateException("Unexpected error: thread local was not cleaned")
+                )
+            }
+            latch.countDown()
+        })
+        latch.await()
+    }
+
+    private suspend fun doTest() {
+        withContext(threadLocal.asContextElement("foo")) {
+            try {
+                coroutineScope {
+                    val semaphore = Semaphore(1, 1)
+                    cancel()
+                    semaphore.acquire()
+                }
+            } catch (e: CancellationException) {
+                // Ignore cancellation
+            }
+        }
+    }
+
+    private suspend fun doTestWithContextSwitch() {
+        withContext(threadLocal.asContextElement("foo")) {
+            try {
+                coroutineScope {
+                    val semaphore = Semaphore(1, 1)
+                    GlobalScope.launch { }.join()
+                    cancel()
+                    semaphore.acquire()
+                }
+            } catch (e: CancellationException) {
+                // Ignore cancellation
+            }
+        }
+    }
 }