diff --git a/benches/Cargo.toml b/benches/Cargo.toml
index c581055cf65..0465cb00e1f 100644
--- a/benches/Cargo.toml
+++ b/benches/Cargo.toml
@@ -90,3 +90,8 @@ harness = false
 name = "time_now"
 path = "time_now.rs"
 harness = false
+
+[[bench]]
+name = "time_timeout"
+path = "time_timeout.rs"
+harness = false
\ No newline at end of file
diff --git a/benches/time_timeout.rs b/benches/time_timeout.rs
new file mode 100644
index 00000000000..66f3e6f6b9e
--- /dev/null
+++ b/benches/time_timeout.rs
@@ -0,0 +1,62 @@
+//! Benchmark spawning a task onto the basic and threaded Tokio executors.
+//! This essentially measure the time to enqueue a task in the local and remote
+//! case.
+
+use std::time::{Duration, Instant};
+
+use criterion::{black_box, criterion_group, criterion_main, Criterion};
+use tokio::time::timeout;
+
+// a vevry quick async task, but might timeout
+async fn quick_job() -> usize {
+    1
+}
+
+fn single_thread_scheduler_timeout(c: &mut Criterion) {
+    do_test(c, 1, "single_thread_timeout");
+}
+
+fn multi_thread_scheduler_timeout(c: &mut Criterion) {
+    do_test(c, 8, "multi_thread_timeout-8");
+}
+
+fn do_test(c: &mut Criterion, workers: usize, name: &str) {
+    let runtime = tokio::runtime::Builder::new_multi_thread()
+        .enable_all()
+        .worker_threads(workers)
+        .build()
+        .unwrap();
+
+    c.bench_function(name, |b| {
+        b.iter_custom(|iters| {
+            let start = Instant::now();
+            runtime.block_on(async {
+                black_box(spawn_job(iters as usize, workers).await);
+            });
+            start.elapsed()
+        })
+    });
+}
+
+async fn spawn_job(iters: usize, procs: usize) {
+    let mut handles = Vec::with_capacity(procs);
+    for _ in 0..procs {
+        handles.push(tokio::spawn(async move {
+            for _ in 0..iters / procs {
+                let h = timeout(Duration::from_secs(1), quick_job());
+                assert_eq!(black_box(h.await.unwrap()), 1);
+            }
+        }));
+    }
+    for handle in handles {
+        handle.await.unwrap();
+    }
+}
+
+criterion_group!(
+    timeout_benchmark,
+    single_thread_scheduler_timeout,
+    multi_thread_scheduler_timeout,
+);
+
+criterion_main!(timeout_benchmark);
diff --git a/tokio/src/time/sleep.rs b/tokio/src/time/sleep.rs
index 36f6e83c6b1..e7c1b1e5db5 100644
--- a/tokio/src/time/sleep.rs
+++ b/tokio/src/time/sleep.rs
@@ -256,6 +256,16 @@ impl Sleep {
         use crate::runtime::scheduler;
 
         let handle = scheduler::Handle::current();
+        Self::new_timeout_with_handle(deadline, location, handle)
+    }
+
+    #[cfg_attr(not(all(tokio_unstable, feature = "tracing")), allow(unused_variables))]
+    #[track_caller]
+    pub(crate) fn new_timeout_with_handle(
+        deadline: Instant,
+        location: Option<&'static Location<'static>>,
+        handle: crate::runtime::scheduler::Handle,
+    ) -> Sleep {
         let entry = TimerEntry::new(&handle, deadline);
 
         #[cfg(all(tokio_unstable, feature = "tracing"))]
diff --git a/tokio/src/time/timeout.rs b/tokio/src/time/timeout.rs
index 52ab9891c69..3a1b6f90058 100644
--- a/tokio/src/time/timeout.rs
+++ b/tokio/src/time/timeout.rs
@@ -6,7 +6,7 @@
 
 use crate::{
     runtime::coop,
-    time::{error::Elapsed, sleep_until, Duration, Instant, Sleep},
+    time::{error::Elapsed, Duration, Instant, Sleep},
     util::trace,
 };
 
@@ -87,14 +87,7 @@ pub fn timeout<F>(duration: Duration, future: F) -> Timeout<F>
 where
     F: Future,
 {
-    let location = trace::caller_location();
-
-    let deadline = Instant::now().checked_add(duration);
-    let delay = match deadline {
-        Some(deadline) => Sleep::new_timeout(deadline, location),
-        None => Sleep::far_future(location),
-    };
-    Timeout::new_with_delay(future, delay)
+    Timeout::new_with_delay(future, Instant::now().checked_add(duration))
 }
 
 /// Requires a `Future` to complete before the specified instant in time.
@@ -146,11 +139,14 @@ pub fn timeout_at<F>(deadline: Instant, future: F) -> Timeout<F>
 where
     F: Future,
 {
-    let delay = sleep_until(deadline);
+    use crate::runtime::scheduler;
+    let handle = scheduler::Handle::current();
 
     Timeout {
         value: future,
-        delay,
+        deadline: Some(deadline),
+        delay: None,
+        handle,
     }
 }
 
@@ -162,13 +158,23 @@ pin_project! {
         #[pin]
         value: T,
         #[pin]
-        delay: Sleep,
+        delay: Option<Sleep>,
+        deadline : Option<Instant>,
+        handle: crate::runtime::scheduler::Handle,
     }
 }
 
 impl<T> Timeout<T> {
-    pub(crate) fn new_with_delay(value: T, delay: Sleep) -> Timeout<T> {
-        Timeout { value, delay }
+    pub(crate) fn new_with_delay(value: T, deadline: Option<Instant>) -> Timeout<T> {
+        use crate::runtime::scheduler;
+        let handle = scheduler::Handle::current();
+
+        Timeout {
+            value,
+            deadline,
+            delay: None,
+            handle,
+        }
     }
 
     /// Gets a reference to the underlying value in this timeout.
@@ -194,7 +200,7 @@ where
     type Output = Result<T::Output, Elapsed>;
 
     fn poll(self: Pin<&mut Self>, cx: &mut task::Context<'_>) -> Poll<Self::Output> {
-        let me = self.project();
+        let mut me = self.project();
 
         let had_budget_before = coop::has_budget_remaining();
 
@@ -205,10 +211,25 @@ where
 
         let has_budget_now = coop::has_budget_remaining();
 
+        // If the above inner future is ready, the below code will not be executed.
+        // This lazy initiation is for performance purposes,
+        // it can avoid unnecessary of `Sleep` creation and drop.
+        if me.delay.is_none() {
+            let location = trace::caller_location();
+            let delay = match me.deadline {
+                Some(deadline) => {
+                    Sleep::new_timeout_with_handle(*deadline, location, me.handle.clone())
+                }
+                None => Sleep::far_future(location),
+            };
+            me.delay.as_mut().set(Some(delay));
+        }
+
         let delay = me.delay;
 
         let poll_delay = || -> Poll<Self::Output> {
-            match delay.poll(cx) {
+            // Safety: we have just assigned it a value of `Some`.
+            match delay.as_pin_mut().unwrap().poll(cx) {
                 Poll::Ready(()) => Poll::Ready(Err(Elapsed::new())),
                 Poll::Pending => Poll::Pending,
             }