@@ -278,11 +278,14 @@ impl PyDict {
     ) -> PyResult<()> {
         let dict = &self.entries;
         let dict_size = &dict_other.size();
-        for (key, value) in dict_other {
-            if !override_existing && dict.contains(vm, &*key)? {
+        let mut position = 0;
+        while let Some((next, key, value, hash)) = dict_other.entries.next_entry_with_hash(position)
+        {
+            position = next;
+            if !override_existing && dict.contains_known_hash(vm, &*key, hash)? {
                 continue;
             }
-            dict.insert(vm, &*key, value)?;
+            dict.insert_known_hash(vm, &*key, hash, value)?;
         }
         if dict_other.entries.has_changed_size(dict_size) {
             return Err(vm.new_runtime_error("dict mutated during update"));
 
@@ -486,8 +486,9 @@ impl<T: Clone> Dict<T> {
     /// Store a key whose hash the caller already knows.
     ///
     /// `hash` must be computed for `key` or read from [`Self::keys_with_hashes`]
-    /// on a container holding this same key. A wrong hash lands the entry in a
-    /// bucket no lookup probes, silently losing the key.
+    /// or [`Self::next_entry_with_hash`] on a container holding this same key.
+    /// A wrong hash lands the entry in a bucket no lookup probes, silently
+    /// losing the key.
     pub(crate) fn insert_known_hash<K>(
         &self,
         vm: &VirtualMachine,
@@ -1037,13 +1038,21 @@ impl<T: Clone> Dict<T> {
         }
     }
 
-    pub(crate) fn next_entry(&self, mut position: EntryIndex) -> Option<(usize, PyObjectRef, T)> {
+    pub(crate) fn next_entry(&self, position: EntryIndex) -> Option<(usize, PyObjectRef, T)> {
+        self.next_entry_with_hash(position)
+            .map(|(position, key, value, _)| (position, key, value))
+    }
+
+    pub(crate) fn next_entry_with_hash(
+        &self,
+        mut position: EntryIndex,
+    ) -> Option<(usize, PyObjectRef, T, HashValue)> {
         let inner = self.read();
         loop {
             let entry = inner.entries.get(position)?;
             position += 1;
             if let Some(entry) = entry {
-                break Some((position, entry.key.clone(), entry.value.clone()));
+                break Some((position, entry.key.clone(), entry.value.clone(), entry.hash));
             }
         }
     }
 
@@ -615,3 +615,75 @@ def __eq__(self, other):
 lookup = LookupOrderSubclass("lookup", True)
 assert {stored: 1}[lookup] == 1
 assert LookupOrderKey.calls == ["lookup"]
+
+
+class MergeHashKey:
+    hash_disabled = False
+
+    def __init__(self, value):
+        self.value = value
+
+    def __hash__(self):
+        assert not self.hash_disabled, "dictionary merge rehashed a stored key"
+        return 42
+
+    def __eq__(self, other):
+        if not isinstance(other, MergeHashKey):
+            return NotImplemented
+        return self.value == other.value
+
+
+def merge_with_update(source):
+    result = {}
+    result.update(source)
+    return result
+
+
+def merge_with_ior(source):
+    result = {}
+    result |= source
+    return result
+
+
+# Exact dictionary merges reuse hashes, including colliding keys and holes.
+merge_keys = [MergeHashKey(i) for i in range(3)]
+merge_source = dict(zip(merge_keys, ("first", "removed", "last")))
+del merge_source[merge_keys[1]]
+existing_merge_key = MergeHashKey(2)
+merge_target = {existing_merge_key: "old"}
+MergeHashKey.hash_disabled = True
+for merge in (
+    dict,
+    merge_with_update,
+    merge_with_ior,
+    lambda source: {} | source,
+    lambda source: dict.__ror__(source, {}),
+    lambda source: {**source},
+):
+    assert list(merge(merge_source).items()) == list(merge_source.items())
+
+# Overwriting a matching key keeps its identity and position.
+merge_target.update(merge_source)
+assert next(iter(merge_target)) is existing_merge_key
+assert list(merge_target.values()) == ["last", "first"]
+merge_source.update(merge_source)
+merge_source |= merge_source
+assert list(merge_source.values()) == ["first", "last"]
+MergeHashKey.hash_disabled = False
+
+
+class MergeMapping(dict):
+    def __iter__(self):
+        return iter(("virtual",))
+
+    def keys(self):
+        return ["virtual"]
+
+    def __getitem__(self, key):
+        assert key == "virtual"
+        return 42
+
+
+# Generic mappings retain their lookup hooks instead of exposing dict storage.
+for merge in (dict, merge_with_update, merge_with_ior):
+    assert merge(MergeMapping(stored=0)) == {"virtual": 42}