diff --git a/Lib/test/test_str.py b/Lib/test/test_str.py
index 11e2abb82c5..0dd92c93396 100644
--- a/Lib/test/test_str.py
+++ b/Lib/test/test_str.py
@@ -2414,7 +2414,6 @@ def test_ucs4(self):
         else:
             self.fail("Should have raised UnicodeDecodeError")
 
-    @unittest.expectedFailure  # TODO: RUSTPYTHON; AssertionError: <class 'str'> is not <class 'test.test_str.StrSubclass'>
     def test_conversion(self):
         # Make sure __str__() works properly
         class StrWithStr(str):
diff --git a/crates/vm/src/builtins/str.rs b/crates/vm/src/builtins/str.rs
index 8707c5cf769..59b4145c75a 100644
--- a/crates/vm/src/builtins/str.rs
+++ b/crates/vm/src/builtins/str.rs
@@ -394,13 +394,10 @@ impl Constructor for PyStr {
     type Args = StrArgs;
 
     fn slot_new(cls: PyTypeRef, func_args: FuncArgs, vm: &VirtualMachine) -> PyResult {
-        // Optimization: return exact str as-is (only when no encoding/errors provided)
-        if cls.is(vm.ctx.types.str_type)
-            && func_args.args.len() == 1
-            && func_args.kwargs.is_empty()
-            && func_args.args[0].class().is(vm.ctx.types.str_type)
+        // Optimization: for exact str, return PyObject_Str result as-is
+        if cls.is(vm.ctx.types.str_type) && func_args.args.len() == 1 && func_args.kwargs.is_empty()
         {
-            return Ok(func_args.args[0].clone());
+            return func_args.args[0].str(vm).map(Into::into);
         }
 
         let args: Self::Args = func_args.bind(vm)?;
diff --git a/extra_tests/snippets/builtin_str_subclass.py b/extra_tests/snippets/builtin_str_subclass.py
index 73e23615c4d..4e1f6080715 100644
--- a/extra_tests/snippets/builtin_str_subclass.py
+++ b/extra_tests/snippets/builtin_str_subclass.py
@@ -19,6 +19,33 @@ def __init__(self, value):
 assert y + " other" == "1 other"
 assert y.x == "substr"
 
+
+class ReprStrSubclass(str):
+    pass
+
+
+class WithStr:
+    def __init__(self, value):
+        self.value = value
+
+    def __str__(self):
+        return self.value
+
+
+class WithRepr:
+    def __init__(self, value):
+        self.value = value
+
+    def __repr__(self):
+        return self.value
+
+
+str_value = ReprStrSubclass("abc")
+assert str(WithStr(str_value)) is str_value
+
+repr_value = ReprStrSubclass("<abc>")
+assert str(WithRepr(repr_value)) is repr_value
+
 ## Base strings currently get an attribute dict, but shouldn't.
 # with assert_raises(AttributeError):
 #     "hello".x = 5