diff --git a/Lib/test/test_dict.py b/Lib/test/test_dict.py
index 18f7ce6..0840f59 100644
--- a/Lib/test/test_dict.py
+++ b/Lib/test/test_dict.py
@@ -254,6 +254,14 @@
         d = dict(zip(range(6), range(6)))
         self.assertEqual(dict.fromkeys(d, 0), dict(zip(range(6), [0]*6)))
 
+        class baddict3(dict):
+            def __new__(cls):
+                return d
+        d = {i : i for i in range(10)}
+        res = d.copy()
+        res.update(a=None, b=None, c=None)
+        self.assertEqual(baddict3.fromkeys({"a", "b", "c"}), res)
+
     def test_copy(self):
         d = {1:1, 2:2, 3:3}
         self.assertEqual(d.copy(), {1:1, 2:2, 3:3})
diff --git a/Misc/NEWS b/Misc/NEWS
index f3fd034..fc8c838 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -12,6 +12,9 @@
 - Issue #14700: Fix buggy overflow checks for large width and precision
   in string formatting operations.
 
+- Issue #16345: Fix an infinite loop when ``fromkeys`` on a dict subclass
+  recieved a nonempty dict from the constructor.
+
 - Issue #6074: Ensure cached bytecode files can always be updated by the
   user that created them, even when the source file is read-only.
 
diff --git a/Objects/dictobject.c b/Objects/dictobject.c
index 6c2b788..664b58c 100644
--- a/Objects/dictobject.c
+++ b/Objects/dictobject.c
@@ -1353,49 +1353,50 @@
     if (d == NULL)
         return NULL;
 
-    if (PyDict_CheckExact(d) && PyDict_CheckExact(seq)) {
-        PyDictObject *mp = (PyDictObject *)d;
-        PyObject *oldvalue;
-        Py_ssize_t pos = 0;
-        PyObject *key;
-        long hash;
+    if (PyDict_CheckExact(d) && PyDict_Size(d) == 0) {
+        if (PyDict_CheckExact(seq)) {
+            PyDictObject *mp = (PyDictObject *)d;
+            PyObject *oldvalue;
+            Py_ssize_t pos = 0;
+            PyObject *key;
+            long hash;
 
-        if (dictresize(mp, Py_SIZE(seq))) {
-            Py_DECREF(d);
-            return NULL;
-        }
-
-        while (_PyDict_Next(seq, &pos, &key, &oldvalue, &hash)) {
-            Py_INCREF(key);
-            Py_INCREF(value);
-            if (insertdict(mp, key, hash, value)) {
+            if (dictresize(mp, Py_SIZE(seq))) {
                 Py_DECREF(d);
                 return NULL;
             }
+
+            while (_PyDict_Next(seq, &pos, &key, &oldvalue, &hash)) {
+                Py_INCREF(key);
+                Py_INCREF(value);
+                if (insertdict(mp, key, hash, value)) {
+                    Py_DECREF(d);
+                    return NULL;
+                }
+            }
+            return d;
         }
-        return d;
-    }
+        if (PyAnySet_CheckExact(seq)) {
+            PyDictObject *mp = (PyDictObject *)d;
+            Py_ssize_t pos = 0;
+            PyObject *key;
+            long hash;
 
-    if (PyDict_CheckExact(d) && PyAnySet_CheckExact(seq)) {
-        PyDictObject *mp = (PyDictObject *)d;
-        Py_ssize_t pos = 0;
-        PyObject *key;
-        long hash;
-
-        if (dictresize(mp, PySet_GET_SIZE(seq))) {
-            Py_DECREF(d);
-            return NULL;
-        }
-
-        while (_PySet_NextEntry(seq, &pos, &key, &hash)) {
-            Py_INCREF(key);
-            Py_INCREF(value);
-            if (insertdict(mp, key, hash, value)) {
+            if (dictresize(mp, PySet_GET_SIZE(seq))) {
                 Py_DECREF(d);
                 return NULL;
             }
+
+            while (_PySet_NextEntry(seq, &pos, &key, &hash)) {
+                Py_INCREF(key);
+                Py_INCREF(value);
+                if (insertdict(mp, key, hash, value)) {
+                    Py_DECREF(d);
+                    return NULL;
+                }
+            }
+            return d;
         }
-        return d;
     }
 
     it = PyObject_GetIter(seq);