diff --git .gitignore .gitignore
index 5808bf1..0655206 100644
--- .gitignore
+++ .gitignore
@@ -1,3 +1,4 @@
+inst
 *-*-*.def
 *.a
 *.bak
diff --git class.c class.c
index 36e7b76..26a0f78 100644
--- class.c
+++ class.c
@@ -80,6 +80,7 @@ rb_class_boot(VALUE super)
     RCLASS_SUPER(klass) = super;
     RCLASS_M_TBL(klass) = st_init_numtable();
 
+    FL_SET(super, RCLASS_INHERITED_FLAG);
     OBJ_INFECT(klass, super);
     return (VALUE)klass;
 }
diff --git include/ruby/ruby.h include/ruby/ruby.h
index 6debe42..bc6e5d4 100644
--- include/ruby/ruby.h
+++ include/ruby/ruby.h
@@ -748,6 +748,7 @@ struct RClass {
 #define RMODULE_IS_OVERLAID FL_USER2
 #define RMODULE_IS_REFINEMENT FL_USER3
 #define RMODULE_INCLUDED_INTO_REFINEMENT FL_USER4
+#define RCLASS_INHERITED_FLAG FL_USER5
 
 struct RFloat {
     struct RBasic basic;
diff --git insns.def insns.def
index 85c0a38..7e17d2f 100644
--- insns.def
+++ insns.def
@@ -975,7 +975,6 @@ defineclass
 		  class_iseq->local_size, 0);
     RESTORE_REGS();
 
-    INC_VM_STATE_VERSION();
     NEXT_INSN();
 }
 
diff --git object.c object.c
index ba4f997..d455fb9 100644
--- object.c
+++ object.c
@@ -2756,6 +2756,21 @@ rb_Hash(VALUE val)
 
 /*
  *  call-seq:
+ *     Class#has_subclass?  ->	bool
+ *
+ *  Returns true if the class has ever been subclassed.
+ *
+ *     Object.has_subclass?    #=> true
+ *     Class.new.has_subclass? #=> false
+ */
+VALUE
+rb_class_has_subclass_p(VALUE klass)
+{
+    return FL_TEST(klass, RCLASS_INHERITED_FLAG) ? Qtrue : Qfalse;
+}
+
+/*
+ *  call-seq:
  *     Hash(arg)    -> hash
  *
  *  Converts <i>arg</i> to a <code>Hash</code> by calling
@@ -3105,6 +3120,7 @@ Init_Object(void)
 
     rb_define_method(rb_cClass, "allocate", rb_obj_alloc, 0);
     rb_define_method(rb_cClass, "new", rb_class_new_instance, -1);
+    rb_define_method(rb_cClass, "has_subclass?", rb_class_has_subclass_p, 0);
     rb_define_method(rb_cClass, "initialize", rb_class_initialize, -1);
     rb_define_method(rb_cClass, "superclass", rb_class_superclass, 0);
     rb_define_alloc_func(rb_cClass, rb_class_s_alloc);
diff --git vm.c vm.c
index 36def2c..63152d5 100644
--- vm.c
+++ vm.c
@@ -2007,7 +2007,6 @@ vm_define_method(rb_thread_t *th, VALUE obj, ID id, VALUE iseqval,
     if (!is_singleton && noex == NOEX_MODFUNC) {
 	rb_add_method(rb_singleton_class(klass), id, VM_METHOD_TYPE_ISEQ, miseq, NOEX_PUBLIC);
     }
-    INC_VM_STATE_VERSION();
 }
 
 #define REWIND_CFP(expr) do { \
@@ -2202,6 +2201,22 @@ static VALUE usage_analysis_operand_stop(VALUE self);
 static VALUE usage_analysis_register_stop(VALUE self);
 #endif
 
+/*
+ *  call-seq:
+ *     RubyVM.state_version ->	int
+ *
+ *  Returns the current VM state version. The state version is used for
+ *  invalidating inline method and constant caches.
+ *
+ *  The state version is not guaranteed to be monotonic and may wrap around in
+ *  long running processes.
+ */
+static VALUE
+vm_state_version()
+{
+    return INT2FIX(ruby_vm_global_state_version);
+}
+
 void
 Init_VM(void)
 {
@@ -2213,6 +2228,7 @@ Init_VM(void)
     rb_cRubyVM = rb_define_class("RubyVM", rb_cObject);
     rb_undef_alloc_func(rb_cRubyVM);
     rb_undef_method(CLASS_OF(rb_cRubyVM), "new");
+    rb_define_singleton_method(rb_cRubyVM, "state_version", vm_state_version, 0);
 
     /* FrozenCore (hidden) */
     fcore = rb_class_new(rb_cBasicObject);
diff --git vm_method.c vm_method.c
index a82ba5f..1a56391 100644
--- vm_method.c
+++ vm_method.c
@@ -220,6 +220,9 @@ rb_add_refined_method_entry(VALUE refined_class, ID mid)
     }
 }
 
+static inline rb_method_entry_t*
+search_method(VALUE klass, ID id, VALUE *defined_class_ptr);
+
 static rb_method_entry_t *
 rb_method_entry_make(VALUE klass, ID mid, rb_method_type_t type,
 		     rb_method_definition_t *def, rb_method_flag_t noex)
@@ -315,7 +318,12 @@ rb_method_entry_make(VALUE klass, ID mid, rb_method_type_t type,
 
     me = ALLOC(rb_method_entry_t);
 
-    rb_clear_cache_by_id(mid);
+    if (search_method(klass, mid, NULL) /* clear cache if overriding existing method */
+	|| FL_TEST(klass, RCLASS_INHERITED_FLAG) /* or this class has subclasses */
+	|| (RB_TYPE_P(klass, T_MODULE)) /* or this is a module */)
+    {
+        rb_clear_cache_by_id(mid);
+    }
 
     me->flag = NOEX_WITH_SAFE(noex);
     me->mark = 0;
@@ -555,7 +563,7 @@ rb_method_entry(VALUE klass, ID id, VALUE *defined_class_ptr)
 
     ent = cache + EXPR1(klass, id);
     if (ent->filled_version == GET_VM_STATE_VERSION() &&
-	ent->mid == id && ent->klass == klass) {
+	ent->mid == id && ent->klass == klass && ent->me) {
 	if (defined_class_ptr)
 	    *defined_class_ptr = ent->defined_class;
 	return ent->me;