diff --git a/NEWS b/NEWS
index 5ad37b063916..97db9550eb9b 100644
--- a/NEWS
+++ b/NEWS
@@ -12,6 +12,15 @@ Any uppercase BUG_* names are modernish shell bug IDs.
 	[1]	30909      <--- incorrect job control output from subshell
 	done
 
+- Fixed: after suspending (Ctrl+Z) a subshell that is running an external
+  command, resuming the subshell with 'fg' failed and the job was lost.
+	$ (vi)    <--- press Ctrl+Z
+	[2] + Stopped                  (vi)
+	$ fg
+	(vi)      <--- vi failed to resume; immediate return to command line
+	$ fg
+	ksh: no such job
+
 2021-12-20:
 
 - Ported performance optimizations from illumos to improve the performance
diff --git a/src/cmd/ksh93/sh/fault.c b/src/cmd/ksh93/sh/fault.c
index 92146f40d28f..1ba4a38b1683 100644
--- a/src/cmd/ksh93/sh/fault.c
+++ b/src/cmd/ksh93/sh/fault.c
@@ -547,7 +547,7 @@ void sh_exit(register int xno)
 		sh_offstate(SH_STOPOK);
 		shp->trapnote = 0;
 		shp->forked = 1;
-		if(!shp->subshell && (sig=sh_fork(shp,0,NIL(int*))))
+		if(sh_isstate(SH_INTERACTIVE) && (sig=sh_fork(shp,0,NIL(int*))))
 		{
 			job.curpgid = 0;
 			job.parent = (pid_t)-1;
@@ -564,7 +564,7 @@ void sh_exit(register int xno)
 		{
 			if(shp->subshell)
 				sh_subfork();
-			/* child process, put to sleep */
+			/* script or child process; put to sleep */
 			sh_offstate(SH_STOPOK);
 			sh_offstate(SH_MONITOR);
 			shp->sigflag[SIGTSTP] = 0;
diff --git a/src/cmd/ksh93/sh/main.c b/src/cmd/ksh93/sh/main.c
index 0ce2d81a94aa..17efc8451ba9 100644
--- a/src/cmd/ksh93/sh/main.c
+++ b/src/cmd/ksh93/sh/main.c
@@ -160,9 +160,11 @@ int sh_main(int ac, char *av[], Shinit_f userinit)
 	else
 		sh_onoption(SH_BRACEEXPAND);
 #endif
-	if((beenhere++)==0)
+	if(!beenhere)
 	{
+		beenhere++;
 		sh_onstate(SH_PROFILE);
+		shp->sigflag[SIGTSTP] |= SH_SIGIGNORE;
 		if(shp->gd->ppid==1)
 			shp->login_sh++;
 		if(shp->login_sh >= 2)
@@ -236,6 +238,7 @@ int sh_main(int ac, char *av[], Shinit_f userinit)
 				sh_source(shp, iop, e_suidprofile);
 		}
 		shp->st.cmdname = error_info.id = command;
+		shp->sigflag[SIGTSTP] &= ~(SH_SIGIGNORE);
 		sh_offstate(SH_PROFILE);
 		if(rshflag)
 			sh_onoption(SH_RESTRICTED);
diff --git a/src/cmd/ksh93/sh/subshell.c b/src/cmd/ksh93/sh/subshell.c
index 81ab3ae01b2d..f76a6168ecd9 100644
--- a/src/cmd/ksh93/sh/subshell.c
+++ b/src/cmd/ksh93/sh/subshell.c
@@ -660,6 +660,16 @@ Sfio_t *sh_subshell(Shell_t *shp,Shnode_t *t, volatile int flags, int comsub)
 					sh_subfork();
 			}
 #endif /* _lib_fchdir */
+#ifdef SIGTSTP
+			/* Virtual subshells are not safe to suspend (^Z, SIGTSTP) in the interactive main shell. */
+			if(sh_isstate(SH_INTERACTIVE))
+			{
+				if(comsub)
+					sigblock(SIGTSTP);
+				else if(!sh_isstate(SH_PROFILE))
+					sh_subfork();
+			}
+#endif
 			sh_offstate(SH_INTERACTIVE);
 			sh_exec(t,flags);
 		}
@@ -686,6 +696,10 @@ Sfio_t *sh_subshell(Shell_t *shp,Shnode_t *t, volatile int flags, int comsub)
 	nv_restore(sp);
 	if(comsub)
 	{
+#ifdef SIGTSTP
+		if(savst.states & sh_state(SH_INTERACTIVE))
+			sigrelease(SIGTSTP);
+#endif
 		/* re-enable job control */
 		if(!sp->nofork)
 			sh_offstate(SH_NOFORK);