diff --git a/kotlinx-coroutines-core/common/src/channels/ArrayChannel.kt b/kotlinx-coroutines-core/common/src/channels/ArrayChannel.kt
index 688125d..1e1c0d3 100644
--- a/kotlinx-coroutines-core/common/src/channels/ArrayChannel.kt
+++ b/kotlinx-coroutines-core/common/src/channels/ArrayChannel.kt
@@ -8,6 +8,7 @@
 import kotlinx.coroutines.internal.*
 import kotlinx.coroutines.selects.*
 import kotlin.jvm.*
+import kotlin.math.*
 
 /**
  * Channel with array buffer of a fixed [capacity].
@@ -29,10 +30,14 @@
     }
 
     private val lock = ReentrantLock()
-    private val buffer: Array<Any?> = arrayOfNulls<Any?>(capacity)
+    /*
+     * Guarded by lock.
+     * Allocate minimum of capacity and 16 to avoid excess memory pressure for large channels when it's not necessary.
+     */
+    private var buffer: Array<Any?> = arrayOfNulls<Any?>(min(capacity, 8))
     private var head: Int = 0
     @Volatile
-    private var size: Int = 0
+    private var size: Int = 0 // Invariant: size <= capacity
 
     protected final override val isBufferAlwaysEmpty: Boolean get() = false
     protected final override val isBufferEmpty: Boolean get() = size == 0
@@ -64,7 +69,8 @@
                         }
                     }
                 }
-                buffer[(head + size) % capacity] = element // actually queue element
+                ensureCapacity(size)
+                buffer[(head + size) % buffer.size] = element // actually queue element
                 return OFFER_SUCCESS
             }
             // size == capacity: full
@@ -112,7 +118,8 @@
                     this.size = size // restore size
                     return ALREADY_SELECTED
                 }
-                buffer[(head + size) % capacity] = element // actually queue element
+                ensureCapacity(size)
+                buffer[(head + size) % buffer.size] = element // actually queue element
                 return OFFER_SUCCESS
             }
             // size == capacity: full
@@ -123,6 +130,19 @@
         return receive!!.offerResult
     }
 
+    // Guarded by lock
+    private fun ensureCapacity(currentSize: Int) {
+        if (currentSize >= buffer.size) {
+            val newSize = min(buffer.size * 2, capacity)
+            val newBuffer = arrayOfNulls<Any?>(newSize)
+            for (i in 0 until currentSize) {
+                newBuffer[i] = buffer[(head + i) % buffer.size]
+            }
+            buffer = newBuffer
+            head = 0
+        }
+    }
+
     // result is `E | POLL_FAILED | Closed`
     protected override fun pollInternal(): Any? {
         var send: Send? = null
@@ -149,9 +169,9 @@
             }
             if (replacement !== POLL_FAILED && replacement !is Closed<*>) {
                 this.size = size // restore size
-                buffer[(head + size) % capacity] = replacement
+                buffer[(head + size) % buffer.size] = replacement
             }
-            head = (head + 1) % capacity
+            head = (head + 1) % buffer.size
         }
         // complete send the we're taken replacement from
         if (token != null)
@@ -203,7 +223,7 @@
             }
             if (replacement !== POLL_FAILED && replacement !is Closed<*>) {
                 this.size = size // restore size
-                buffer[(head + size) % capacity] = replacement
+                buffer[(head + size) % buffer.size] = replacement
             } else {
                 // failed to poll or is already closed --> let's try to select receiving this element from buffer
                 if (!select.trySelect(null)) { // :todo: move trySelect completion outside of lock
@@ -212,7 +232,7 @@
                     return ALREADY_SELECTED
                 }
             }
-            head = (head + 1) % capacity
+            head = (head + 1) % buffer.size
         }
         // complete send the we're taken replacement from
         if (token != null)
@@ -226,7 +246,7 @@
         lock.withLock {
             repeat(size) {
                 buffer[head] = 0
-                head = (head + 1) % capacity
+                head = (head + 1) % buffer.size
             }
             size = 0
         }
@@ -237,5 +257,5 @@
     // ------ debug ------
 
     override val bufferDebugString: String
-        get() = "(buffer:capacity=${buffer.size},size=$size)"
+        get() = "(buffer:capacity=$capacity,size=$size)"
 }
diff --git a/kotlinx-coroutines-core/common/test/channels/ArrayChannelTest.kt b/kotlinx-coroutines-core/common/test/channels/ArrayChannelTest.kt
index 2b948df..ceef21e 100644
--- a/kotlinx-coroutines-core/common/test/channels/ArrayChannelTest.kt
+++ b/kotlinx-coroutines-core/common/test/channels/ArrayChannelTest.kt
@@ -86,7 +86,7 @@
     }
 
     @Test
-    fun testOfferAndPool() = runTest {
+    fun testOfferAndPoll() = runTest {
         val q = Channel<Int>(1)
         assertTrue(q.offer(1))
         expect(1)
@@ -144,4 +144,51 @@
         channel.cancel(TestCancellationException())
         channel.receiveOrNull()
     }
+
+    @Test
+    fun testBufferSize() = runTest {
+        val capacity = 42
+        val channel = Channel<Int>(capacity)
+        checkBufferChannel(channel, capacity)
+    }
+
+    @Test
+    fun testBufferSizeFromTheMiddle() = runTest {
+        val capacity = 42
+        val channel = Channel<Int>(capacity)
+        repeat(4) {
+            channel.offer(-1)
+        }
+        repeat(4) {
+            channel.receiveOrNull()
+        }
+        checkBufferChannel(channel, capacity)
+    }
+
+    private suspend fun CoroutineScope.checkBufferChannel(
+        channel: Channel<Int>,
+        capacity: Int
+    ) {
+        launch {
+            expect(2)
+            repeat(42) {
+                channel.send(it)
+            }
+            expect(3)
+            channel.send(42)
+            expect(5)
+            channel.close()
+        }
+
+        expect(1)
+        yield()
+
+        expect(4)
+        val result = ArrayList<Int>(42)
+        channel.consumeEach {
+            result.add(it)
+        }
+        assertEquals((0..capacity).toList(), result)
+        finish(6)
+    }
 }
diff --git a/kotlinx-coroutines-core/jvm/test/channels/ArrayChannelStressTest.kt b/kotlinx-coroutines-core/jvm/test/channels/ArrayChannelStressTest.kt
index ccb0e87..74dc24c 100644
--- a/kotlinx-coroutines-core/jvm/test/channels/ArrayChannelStressTest.kt
+++ b/kotlinx-coroutines-core/jvm/test/channels/ArrayChannelStressTest.kt
@@ -22,13 +22,13 @@
     fun testStress() = runTest {
         val n = 100_000 * stressTestMultiplier
         val q = Channel<Int>(capacity)
-        val sender = launch(coroutineContext) {
+        val sender = launch {
             for (i in 1..n) {
                 q.send(i)
             }
             expect(2)
         }
-        val receiver = launch(coroutineContext) {
+        val receiver = launch {
             for (i in 1..n) {
                 val next = q.receive()
                 check(next == i)
@@ -40,4 +40,25 @@
         receiver.join()
         finish(4)
     }
+
+    @Test
+    fun testBurst() = runTest {
+        Assume.assumeTrue(capacity < 100_000)
+        repeat(10_000 * stressTestMultiplier) {
+            val channel = Channel<Int>(capacity)
+            val sender = launch(Dispatchers.Default) {
+                for (i in 1..capacity * 2) {
+                    channel.send(i)
+                }
+            }
+            val receiver = launch(Dispatchers.Default) {
+                for (i in 1..capacity * 2) {
+                    val next = channel.receive()
+                    check(next == i)
+                }
+            }
+            sender.join()
+            receiver.join()
+        }
+    }
 }