diff --git a/Lib/test/test_peepholer.py b/Lib/test/test_peepholer.py
index f58fe03..a0031f2 100644
--- a/Lib/test/test_peepholer.py
+++ b/Lib/test/test_peepholer.py
@@ -102,6 +102,34 @@
                 0, 1, 2, 3, 4, 5, 6, 7, 8, 9,
             ],)
 
+    def test_folding_of_binops_on_constants(self):
+        for line, elem in (
+            ('a = 2+3+4', '(9)'),                   # chained fold
+            ('"@"*4', "('@@@@')"),                  # check string ops
+            ('a="abc" + "def"', "('abcdef')"),      # check string ops
+            ('a = 3**4', '(81)'),                   # binary power
+            ('a = 3*4', '(12)'),                    # binary multiply
+            ('a = 13/4.0', '(3.25)'),               # binary divide
+            ('a = 13//4', '(3)'),                   # binary floor divide
+            ('a = 14%4', '(2)'),                    # binary modulo
+            ('a = 2+3', '(5)'),                     # binary add
+            ('a = 13-4', '(9)'),                    # binary subtract
+            ('a = (12,13)[1]', '(13)'),             # binary subscr
+            ('a = 13 << 2', '(52)'),                # binary lshift
+            ('a = 13 >> 2', '(3)'),                 # binary rshift
+            ('a = 13 & 7', '(5)'),                  # binary and
+            ('a = 13 ^ 7', '(10)'),                 # binary xor
+            ('a = 13 | 7', '(15)'),                 # binary or
+            ):
+            asm = dis_single(line)
+            self.assert_(elem in asm, asm)
+            self.assert_('BINARY_' not in asm)
+
+        # Verify that unfoldables are skipped
+        asm = dis_single('a=2+"b"')
+        self.assert_('(2)' in asm)
+        self.assert_("('b')" in asm)
+
     def test_elim_extra_return(self):
         # RETURN LOAD_CONST None RETURN  -->  RETURN
         def f(x):
diff --git a/Misc/NEWS b/Misc/NEWS
index af04ecf..eb40d97 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -13,6 +13,9 @@
 - min() and max() now support key= arguments with the same meaning as in
   list.sort().
 
+- The peephole optimizer now performs simple constant folding in expressions:
+      (2+3) --> (5).
+
 
 Extension Modules
 -----------------
diff --git a/Python/compile.c b/Python/compile.c
index ea325ff..15c8436 100644
--- a/Python/compile.c
+++ b/Python/compile.c
@@ -439,6 +439,99 @@
 	return 1;
 }
 
+/* Replace LOAD_CONST c1. LOAD_CONST c2 BINOP
+   with    LOAD_CONST binop(c1,c2)
+   The consts table must still be in list form so that the
+       new constant can be appended.
+   Called with codestr pointing to the first LOAD_CONST. 
+   Abandons the transformation if the folding fails (i.e.  1+'a').  */
+static int
+fold_binops_on_constants(unsigned char *codestr, PyObject *consts)
+{
+	PyObject *newconst, *v, *w;
+	int len_consts, opcode;
+
+	/* Pre-conditions */
+	assert(PyList_CheckExact(consts));
+	assert(codestr[0] == LOAD_CONST);
+	assert(codestr[3] == LOAD_CONST);
+
+	/* Create new constant */
+	v = PyList_GET_ITEM(consts, GETARG(codestr, 0));
+	w = PyList_GET_ITEM(consts, GETARG(codestr, 3));
+	opcode = codestr[6];
+	switch (opcode) {
+	case BINARY_POWER:
+		newconst = PyNumber_Power(v, w, Py_None);
+		break;
+	case BINARY_MULTIPLY:
+		newconst = PyNumber_Multiply(v, w);
+		break;
+	case BINARY_DIVIDE:
+		if (!_Py_QnewFlag) {
+			newconst = PyNumber_Divide(v, w);
+			break;
+		}
+		/* -Qnew is in effect:	fall through to
+		   BINARY_TRUE_DIVIDE */
+	case BINARY_TRUE_DIVIDE:
+		newconst = PyNumber_TrueDivide(v, w);
+		break;
+	case BINARY_FLOOR_DIVIDE:
+		newconst = PyNumber_FloorDivide(v, w);
+		break;
+	case BINARY_MODULO:
+		newconst = PyNumber_Remainder(v, w);
+		break;
+	case BINARY_ADD:
+		newconst = PyNumber_Add(v, w);
+		break;
+	case BINARY_SUBTRACT:
+		newconst = PyNumber_Subtract(v, w);
+		break;
+	case BINARY_SUBSCR:
+		newconst = PyObject_GetItem(v, w);
+		break;
+	case BINARY_LSHIFT:
+		newconst = PyNumber_Lshift(v, w);
+		break;
+	case BINARY_RSHIFT:
+		newconst = PyNumber_Rshift(v, w);
+		break;
+	case BINARY_AND:
+		newconst = PyNumber_And(v, w);
+		break;
+	case BINARY_XOR:
+		newconst = PyNumber_Xor(v, w);
+		break;
+	case BINARY_OR:
+		newconst = PyNumber_Or(v, w);
+		break;
+	default:
+		/* Called with an unknown opcode */
+		assert(0);
+		return 0;
+	}
+	if (newconst == NULL) {
+		PyErr_Clear();
+		return 0;
+	}
+
+	/* Append folded constant into consts table */
+	len_consts = PyList_GET_SIZE(consts);
+	if (PyList_Append(consts, newconst)) {
+		Py_DECREF(newconst);
+		return 0;
+	}
+	Py_DECREF(newconst);
+
+	/* Write NOP NOP NOP NOP LOAD_CONST newconst */
+	memset(codestr, NOP, 4);
+	codestr[4] = LOAD_CONST;
+	SETARG(codestr, 4, len_consts);
+	return 1;
+}
+
 static unsigned int *
 markblocks(unsigned char *code, int len)
 {
@@ -614,7 +707,6 @@
 			h = i - 3 * j;
 			if (h >= 0  &&
 			    j <= lastlc  &&
-			    codestr[h] == LOAD_CONST  && 
 			    ISBASICBLOCK(blocks, h, 3*(j+1))  &&
 			    tuple_of_constants(&codestr[h], j, consts)) {
 				assert(codestr[i] == LOAD_CONST);
@@ -640,6 +732,31 @@
 			}
 			break;
 
+		/* Fold binary ops on constants.
+		   LOAD_CONST c1 LOAD_CONST c2 BINOP -->  LOAD_CONST binop(c1,c2) */
+		case BINARY_POWER:
+		case BINARY_MULTIPLY:
+		case BINARY_DIVIDE:
+		case BINARY_TRUE_DIVIDE:
+		case BINARY_FLOOR_DIVIDE:
+		case BINARY_MODULO:
+		case BINARY_ADD:
+		case BINARY_SUBTRACT:
+		case BINARY_SUBSCR:
+		case BINARY_LSHIFT:
+		case BINARY_RSHIFT:
+		case BINARY_AND:
+		case BINARY_XOR:
+		case BINARY_OR:
+			if (lastlc >= 2  &&
+			    ISBASICBLOCK(blocks, i-6, 7)  &&
+			    fold_binops_on_constants(&codestr[i-6], consts)) {
+				i -= 2;
+				assert(codestr[i] == LOAD_CONST);
+				cumlc = 1;
+			}
+			break;
+
 		/* Simplify conditional jump to conditional jump where the
 		   result of the first test implies the success of a similar
 		   test or the failure of the opposite test.