diff --git a/py/obj.h b/py/obj.h
index 11d99ed606..592ae8afd0 100644
--- a/py/obj.h
+++ b/py/obj.h
@@ -330,6 +330,7 @@ extern const mp_obj_type_t mp_type_GeneratorExit;
 extern const mp_obj_type_t mp_type_ImportError;
 extern const mp_obj_type_t mp_type_IndentationError;
 extern const mp_obj_type_t mp_type_IndexError;
+extern const mp_obj_type_t mp_type_KeyboardInterrupt;
 extern const mp_obj_type_t mp_type_KeyError;
 extern const mp_obj_type_t mp_type_LookupError;
 extern const mp_obj_type_t mp_type_MemoryError;
diff --git a/py/objexcept.c b/py/objexcept.c
index 203517b106..9b39788759 100644
--- a/py/objexcept.c
+++ b/py/objexcept.c
@@ -211,7 +211,7 @@ const mp_obj_type_t mp_type_ ## exc_name = { \
 // http://docs.python.org/3/library/exceptions.html
 MP_DEFINE_EXCEPTION_BASE(BaseException)
 MP_DEFINE_EXCEPTION(SystemExit, BaseException)
-//MP_DEFINE_EXCEPTION(KeyboardInterrupt, BaseException)
+MP_DEFINE_EXCEPTION(KeyboardInterrupt, BaseException)
 MP_DEFINE_EXCEPTION(GeneratorExit, BaseException)
 MP_DEFINE_EXCEPTION(Exception, BaseException)
   MP_DEFINE_EXCEPTION_BASE(Exception)
diff --git a/py/qstrdefs.h b/py/qstrdefs.h
index c87a7a83c1..64658b587c 100644
--- a/py/qstrdefs.h
+++ b/py/qstrdefs.h
@@ -108,6 +108,7 @@ Q(GeneratorExit)
 Q(ImportError)
 Q(IndentationError)
 Q(IndexError)
+Q(KeyboardInterrupt)
 Q(KeyError)
 Q(LookupError)
 Q(MemoryError)
diff --git a/py/runtime.c b/py/runtime.c
index 6cb5c7e197..f6f34be940 100644
--- a/py/runtime.c
+++ b/py/runtime.c
@@ -62,6 +62,9 @@
 #define DEBUG_OP_printf(...) (void)0
 #endif
 
+// pending exception object (MP_OBJ_NULL if not pending)
+mp_obj_t mp_pending_exception;
+
 // locals and globals need to be pointers because they can be the same in outer module scope
 STATIC mp_obj_dict_t *dict_locals;
 STATIC mp_obj_dict_t *dict_globals;
@@ -79,6 +82,9 @@ void mp_init(void) {
     qstr_init();
     mp_stack_ctrl_init();
 
+    // no pending exceptions to start with
+    mp_pending_exception = MP_OBJ_NULL;
+
 #if MICROPY_ENABLE_EMERGENCY_EXCEPTION_BUF
     mp_init_emergency_exception_buf();
 #endif
diff --git a/py/runtime.h b/py/runtime.h
index 967a1fc097..5be470330b 100644
--- a/py/runtime.h
+++ b/py/runtime.h
@@ -116,6 +116,7 @@ mp_obj_t mp_convert_native_to_obj(mp_uint_t val, mp_uint_t type);
 mp_obj_t mp_native_call_function_n_kw(mp_obj_t fun_in, mp_uint_t n_args_kw, const mp_obj_t *args);
 NORETURN void mp_native_raise(mp_obj_t o);
 
+extern mp_obj_t mp_pending_exception;
 extern struct _mp_obj_list_t mp_sys_path_obj;
 extern struct _mp_obj_list_t mp_sys_argv_obj;
 #define mp_sys_path ((mp_obj_t)&mp_sys_path_obj)
diff --git a/py/vm.c b/py/vm.c
index 36ea10f5c0..664f9377a8 100644
--- a/py/vm.c
+++ b/py/vm.c
@@ -110,10 +110,12 @@ mp_vm_return_kind_t mp_execute_bytecode(mp_code_state *code_state, volatile mp_o
         code_state->ip = ip; \
         goto *entry_table[*ip++]; \
     } while(0)
+    #define DISPATCH_WITH_PEND_EXC_CHECK() goto pending_exception_check
     #define ENTRY(op) entry_##op
     #define ENTRY_DEFAULT entry_default
 #else
     #define DISPATCH() break
+    #define DISPATCH_WITH_PEND_EXC_CHECK() goto pending_exception_check
     #define ENTRY(op) case op
     #define ENTRY_DEFAULT default
 #endif
@@ -372,21 +374,21 @@ dispatch_loop:
                 ENTRY(MP_BC_JUMP):
                     DECODE_SLABEL;
                     ip += unum;
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 ENTRY(MP_BC_POP_JUMP_IF_TRUE):
                     DECODE_SLABEL;
                     if (mp_obj_is_true(POP())) {
                         ip += unum;
                     }
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 ENTRY(MP_BC_POP_JUMP_IF_FALSE):
                     DECODE_SLABEL;
                     if (!mp_obj_is_true(POP())) {
                         ip += unum;
                     }
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 ENTRY(MP_BC_JUMP_IF_TRUE_OR_POP):
                     DECODE_SLABEL;
@@ -395,7 +397,7 @@ dispatch_loop:
                     } else {
                         sp--;
                     }
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 ENTRY(MP_BC_JUMP_IF_FALSE_OR_POP):
                     DECODE_SLABEL;
@@ -404,7 +406,7 @@ dispatch_loop:
                     } else {
                         ip += unum;
                     }
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 ENTRY(MP_BC_SETUP_WITH): {
                     mp_obj_t obj = TOP();
@@ -502,7 +504,7 @@ unwind_jump:
                     if (unum != 0) {
                         sp--;
                     }
-                    DISPATCH();
+                    DISPATCH_WITH_PEND_EXC_CHECK();
 
                 // matched against: POP_BLOCK or POP_EXCEPT (anything else?)
                 ENTRY(MP_BC_SETUP_EXCEPT):
@@ -909,6 +911,15 @@ yield:
 #if !MICROPY_OPT_COMPUTED_GOTO
                 } // switch
 #endif
+
+pending_exception_check:
+                if (mp_pending_exception != MP_OBJ_NULL) {
+                    mp_obj_t obj = mp_pending_exception;
+                    mp_pending_exception = MP_OBJ_NULL;
+                    RAISE(obj);
+                }
+                DISPATCH();
+
             } // for loop
 
         } else {
diff --git a/stmhal/pendsv.c b/stmhal/pendsv.c
index a0eff7e5de..e71836d014 100644
--- a/stmhal/pendsv.c
+++ b/stmhal/pendsv.c
@@ -31,6 +31,7 @@
 #include "misc.h"
 #include "qstr.h"
 #include "obj.h"
+#include "runtime.h"
 #include "pendsv.h"
 
 static void *pendsv_object = NULL;
@@ -40,12 +41,22 @@ void pendsv_init(void) {
     HAL_NVIC_SetPriority(PendSV_IRQn, 0xf, 0xf);
 }
 
-// call this function to raise a pending exception during an interrupt
-// it will wait until all interrupts are finished then raise the given
-// exception object using nlr_jump in the context of the top-level thread
+// Call this function to raise a pending exception during an interrupt.
+// It will first try to raise the exception "softly" by setting the
+// mp_pending_exception variable and hoping that the VM will notice it.
+// If this function is called a second time (ie with the mp_pending_exception
+// variable already set) then it will force the exception by using the hardware
+// PENDSV feature.  This will wait until all interrupts are finished then raise
+// the given exception object using nlr_jump in the context of the top-level
+// thread.
 void pendsv_nlr_jump(void *o) {
-    pendsv_object = o;
-    SCB->ICSR = SCB_ICSR_PENDSVSET_Msk;
+    if (mp_pending_exception == MP_OBJ_NULL) {
+        mp_pending_exception = o;
+    } else {
+        mp_pending_exception = MP_OBJ_NULL;
+        pendsv_object = o;
+        SCB->ICSR = SCB_ICSR_PENDSVSET_Msk;
+    }
 }
 
 // since we play tricks with the stack, the compiler must not generate a
diff --git a/stmhal/usb.c b/stmhal/usb.c
index c522b64432..4211c88296 100644
--- a/stmhal/usb.c
+++ b/stmhal/usb.c
@@ -50,7 +50,7 @@ STATIC mp_obj_t mp_const_vcp_interrupt = MP_OBJ_NULL;
 
 void pyb_usb_init0(void) {
     // create an exception object for interrupting by VCP
-    mp_const_vcp_interrupt = mp_obj_new_exception_msg(&mp_type_OSError, "VCPInterrupt");
+    mp_const_vcp_interrupt = mp_obj_new_exception(&mp_type_KeyboardInterrupt);
     USBD_CDC_SetInterrupt(VCP_CHAR_NONE, mp_const_vcp_interrupt);
 }
 
diff --git a/stmhal/usbd_cdc_interface.c b/stmhal/usbd_cdc_interface.c
index d437955508..28f06067bb 100644
--- a/stmhal/usbd_cdc_interface.c
+++ b/stmhal/usbd_cdc_interface.c
@@ -374,7 +374,6 @@ static int8_t CDC_Itf_Receive(uint8_t* Buf, uint32_t *Len) {
 
         if (char_found) {
             // raise exception when interrupts are finished
-            user_interrupt_char = VCP_CHAR_NONE;
             pendsv_nlr_jump(user_interrupt_data);
         }
 
diff --git a/unix/main.c b/unix/main.c
index a8de9fdee3..44542af51b 100644
--- a/unix/main.c
+++ b/unix/main.c
@@ -34,6 +34,7 @@
 #include <sys/stat.h>
 #include <sys/types.h>
 #include <errno.h>
+#include <signal.h>
 
 #include "mpconfig.h"
 #include "nlr.h"
@@ -64,6 +65,20 @@ mp_uint_t mp_verbose_flag = 0;
 long heap_size = 128*1024 * (sizeof(mp_uint_t) / 4);
 #endif
 
+STATIC mp_obj_t keyboard_interrupt_obj;
+
+STATIC void sighandler(int signum) {
+    if (signum == SIGINT) {
+        mp_obj_exception_clear_traceback(keyboard_interrupt_obj);
+        mp_pending_exception = keyboard_interrupt_obj;
+        // disable our handler so next we really die
+        struct sigaction sa;
+        sa.sa_handler = SIG_DFL;
+        sigemptyset(&sa.sa_mask);
+        sigaction(SIGINT, &sa, NULL);
+    }
+}
+
 #define FORCED_EXIT (0x100)
 // returns standard error codes: 0 for success, 1 for all other errors
 // if FORCED_EXIT bit is set then script raised SystemExit and the
@@ -119,14 +134,23 @@ STATIC int execute_from_lexer(mp_lexer_t *lex, mp_parse_input_kind_t input_kind,
         return 0;
     }
 
+    // enable signal handler
+    struct sigaction sa;
+    sa.sa_handler = sighandler;
+    sigemptyset(&sa.sa_mask);
+    sigaction(SIGINT, &sa, NULL);
+    sa.sa_handler = SIG_DFL;
+
     // execute it
     nlr_buf_t nlr;
     if (nlr_push(&nlr) == 0) {
         mp_call_function_0(module_fun);
+        sigaction(SIGINT, &sa, NULL);
         nlr_pop();
         return 0;
     } else {
         // uncaught exception
+        sigaction(SIGINT, &sa, NULL);
         // check for SystemExit
         mp_obj_t exc = (mp_obj_t)nlr.ret_val;
         if (mp_obj_is_subclass_fast(mp_obj_get_type(exc), &mp_type_SystemExit)) {
@@ -305,6 +329,9 @@ int main(int argc, char **argv) {
 
     mp_init();
 
+    // create keyboard interrupt object
+    keyboard_interrupt_obj = mp_obj_new_exception(&mp_type_KeyboardInterrupt);
+
     char *home = getenv("HOME");
     char *path = getenv("MICROPYPATH");
     if (path == NULL) {