diff --git a/src/debugpy/_vendored/force_pydevd.py b/src/debugpy/_vendored/force_pydevd.py
index c0b058f1..f4dec254 100644
--- a/src/debugpy/_vendored/force_pydevd.py
+++ b/src/debugpy/_vendored/force_pydevd.py
@@ -25,6 +25,11 @@ if "DEBUGPY_LOG_DIR" in os.environ:
     os.environ["PYDEVD_DEBUG"] = str("True")
     os.environ["PYDEVD_DEBUG_FILE"] = os.environ["DEBUGPY_LOG_DIR"] + str("/debugpy.pydevd.log")
 
+# Work around https://github.com/microsoft/debugpy/issues/346.
+# Disable pydevd frame-eval optimizations only if unset, to allow opt-in.
+if "PYDEVD_USE_FRAME_EVAL" not in os.environ:
+    os.environ["PYDEVD_USE_FRAME_EVAL"] = str("NO")
+
 
 # Constants must be set before importing any other pydevd module
 # # due to heavy use of "from" in them.
diff --git a/tests/__init__.py b/tests/__init__.py
index d22af475..878fded4 100644
--- a/tests/__init__.py
+++ b/tests/__init__.py
@@ -56,6 +56,17 @@ for _, submodule, _ in tests_submodules:
 from debugpy.common import json, log
 import debugpy.server  # noqa
 
+# Clean up environment variables that were automatically set when importing pydevd -
+# we don't need them in the test runner process (since pydevd is not tracing it),
+# and some tests must be able to spawn debuggee with them unset.
+for name in (
+    "DEBUGPY_LOG_DIR",
+    "PYDEVD_DEBUG",
+    "PYDEVD_DEBUG_FILE",
+    "PYDEVD_USE_FRAME_EVAL",
+):
+    os.environ.pop(name, None)
+
 # Enable full logging to stderr, and make timestamps shorter to match maximum test
 # run time better.
 log.stderr.levels = all
@@ -64,8 +75,6 @@ log.to_file(prefix="tests")
 
 
 # Enable JSON serialization for py.path.local.
-
-
 def json_default(self, obj):
     if isinstance(obj, py.path.local):
         return obj.strpath
diff --git a/tests/debugpy/test_run.py b/tests/debugpy/test_run.py
index f8bb9f78..d7a0c6b1 100644
--- a/tests/debugpy/test_run.py
+++ b/tests/debugpy/test_run.py
@@ -178,3 +178,47 @@ def test_custom_python(pyfile, run, target, python_key, python, python_args):
             "-O" in python_cmd,
             "-v" in python_cmd,
         ]
+
+
+@pytest.mark.parametrize("run", runners.all)
+@pytest.mark.parametrize("target", targets.all)
+@pytest.mark.parametrize("frame_eval", ["", "yes", "no"])
+def test_frame_eval(pyfile, target, run, frame_eval):
+    # Frame-eval optimizations are not available for some Python implementations,
+    # but pydevd will still try to use them if the environment variable is set to
+    # "yes" explicitly, so the test must detect and skip those cases.
+    if frame_eval == "yes":
+        try:
+            import _pydevd_frame_eval.pydevd_frame_eval_cython_wrapper  # noqa
+        except ImportError:
+            pytest.skip("Frame-eval not available")
+        else:
+            pass
+
+    @pyfile
+    def code_to_debug():
+        import debuggee
+        from debuggee import backchannel
+
+        debuggee.setup()
+
+        from _pydevd_frame_eval.pydevd_frame_eval_main import USING_FRAME_EVAL
+
+        backchannel.send(USING_FRAME_EVAL)
+
+    with debug.Session() as session:
+        assert "PYDEVD_USE_FRAME_EVAL" not in os.environ
+        if len(frame_eval):
+            env = (
+                session.config.env
+                if run.request == "launch"
+                else session.spawn_debuggee.env
+            )
+            env["PYDEVD_USE_FRAME_EVAL"] = frame_eval
+
+        backchannel = session.open_backchannel()
+        with run(session, target(code_to_debug)):
+            pass
+
+        using_frame_eval = backchannel.receive()
+        assert using_frame_eval == (frame_eval == "yes")