diff --git a/py/objarray.c b/py/objarray.c
index 4e58d8e5da..c19617d4e1 100644
--- a/py/objarray.c
+++ b/py/objarray.c
@@ -445,7 +445,7 @@ STATIC mp_obj_t array_subscr(mp_obj_t self_in, mp_obj_t index_in, mp_obj_t value
                     if (len_adj > o->free) {
                         // TODO: alloc policy; at the moment we go conservative
                         o->items = m_renew(byte, o->items, (o->len + o->free) * item_sz, (o->len + len_adj) * item_sz);
-                        o->free = 0;
+                        o->free = len_adj;
                         dest_items = o->items;
                     }
                     mp_seq_replace_slice_grow_inplace(dest_items, o->len,
@@ -458,6 +458,7 @@ STATIC mp_obj_t array_subscr(mp_obj_t self_in, mp_obj_t index_in, mp_obj_t value
                     mp_seq_clear(dest_items, o->len + len_adj, o->len, item_sz);
                     // TODO: alloc policy after shrinking
                 }
+                o->free -= len_adj;
                 o->len += len_adj;
                 return mp_const_none;
                 #else
diff --git a/tests/basics/bytearray_slice_assign.py b/tests/basics/bytearray_slice_assign.py
index 7f7d1d119a..fa7878e10d 100644
--- a/tests/basics/bytearray_slice_assign.py
+++ b/tests/basics/bytearray_slice_assign.py
@@ -59,3 +59,10 @@ print(b)
 b = bytearray(2)
 b[1:1] = b"12345"
 print(b)
+
+# Growth of bytearray via slice extension
+b = bytearray(b'12345678')
+b.append(57) # expand and add a bit of unused space at end of the bytearray
+for i in range(400):
+    b[-1:] = b'ab' # grow slowly into the unused space
+print(len(b), b)