diff --git a/src/dos/dos_memory.cpp b/src/dos/dos_memory.cpp
index 969da3aef..c412dc402 100644
--- a/src/dos/dos_memory.cpp
+++ b/src/dos/dos_memory.cpp
@@ -28,6 +28,7 @@
 // uncomment for alloc/free debug messages
 #define DEBUG_ALLOC
 
+uint16_t CONV_MAX_SEG = 0xA000;
 Bitu UMB_START_SEG = 0x9FFF;
 /* FIXME: This should be a variable that reflects the last RAM segment.
  *        That means 0x9FFF if 640KB or more, or a lesser value if less than 640KB */
@@ -38,7 +39,7 @@ uint16_t first_umb_size = 0x2000;
 
 static uint16_t memAllocStrategy = 0x00;
 
-static void DOS_Mem_E_Exit(const char *msg) {
+static void DOS_Mem_MCBdump(void) {
 	uint16_t mcb_segment=dos.firstMCB;
 	DOS_MCB mcb(mcb_segment);
 	DOS_MCB mcb_next(0);
@@ -65,6 +66,10 @@ static void DOS_Mem_E_Exit(const char *msg) {
 	LOG_MSG("FINAL: Type=0x%02x(%c) Seg=0x%04x size=0x%04x name='%s'\n",
 		mcb.GetType(),c,mcb_segment+1,mcb.GetSize(),name);
 	LOG_MSG("End dump\n");
+}
+
+static void DOS_Mem_E_Exit(const char *msg) {
+	DOS_Mem_MCBdump();
 
 #if C_DEBUG
 	LOG_MSG("DOS fatal memory error: %s",msg);
@@ -74,7 +79,7 @@ static void DOS_Mem_E_Exit(const char *msg) {
 #endif
 }
 
-void DOS_CompressMemory(uint16_t first_segment=0/*default*/) {
+void DOS_CompressMemory(uint16_t first_segment=0/*default*/,uint32_t healfrom=0xFFFFu) {
 	uint16_t mcb_segment=dos.firstMCB;
 	DOS_MCB mcb(mcb_segment);
 	DOS_MCB mcb_next(0);
@@ -82,8 +87,26 @@ void DOS_CompressMemory(uint16_t first_segment=0/*default*/) {
 
 	while (mcb.GetType()!='Z') {
 		if(counter++ > 10000000) DOS_Mem_E_Exit("DOS_CompressMemory: DOS MCB list corrupted.");
-		mcb_next.SetPt((uint16_t)(mcb_segment+mcb.GetSize()+1));
-		if (GCC_UNLIKELY((mcb_next.GetType()!=0x4d) && (mcb_next.GetType()!=0x5a))) DOS_Mem_E_Exit("Corrupt MCB chain");
+		const uint16_t nseg = (uint16_t)(mcb_segment+mcb.GetSize()+1); 
+		mcb_next.SetPt(nseg);
+		if (GCC_UNLIKELY((mcb_next.GetType()!=0x4d) && (mcb_next.GetType()!=0x5a))) {
+			/* there are some programs that chain load other programs, but when they shrink their MCB down
+			 * to their EXE resident size they put the stack or other data in the way of the next MCB free
+			 * block header. Real MS-DOS appears in this case to just scan up to the last valid block and
+			 * then right after it, write a new free MCB block there. We can't do this for the split memory
+			 * layout of the PCjr emulation. */
+			if (nseg >= healfrom && (nseg+1u) < CONV_MAX_SEG && !(machine==MCH_PCJR)) {
+				LOG(LOG_DOSMISC,LOG_ERROR)("Corrupted MCB chain, but within the possible memory region of the DOS application.");
+				DOS_Mem_MCBdump();
+				LOG(LOG_DOSMISC,LOG_ERROR)("Declaring all memory past it as a free block. This is apparently MS-DOS behavior.");
+				mcb_next.SetSize(CONV_MAX_SEG - (nseg + 1u));
+				mcb_next.SetPSPSeg(MCB_FREE);
+				mcb_next.SetType('Z');
+			}
+			else {
+				DOS_Mem_E_Exit("Corrupt MCB chain");
+			}
+		}
 		if (mcb_segment >= first_segment && (mcb.GetPSPSeg()==MCB_FREE) && (mcb_next.GetPSPSeg()==MCB_FREE)) {
 			mcb.SetSize(mcb.GetSize()+mcb_next.GetSize()+1);
 			mcb.SetType(mcb_next.GetType());
@@ -184,7 +207,12 @@ uint16_t DOS_GetMaximumFreeSize(uint16_t minBlocks)
 }
 
 bool DOS_AllocateMemory(uint16_t * segment,uint16_t * blocks) {
-	DOS_CompressMemory();
+	DOS_MCB psp_mcb(dos.psp()-1);
+
+	DOS_CompressMemory(
+		0/*default scan*/,
+		dos.psp()+psp_mcb.GetSize()/*auto-heal broken MCB chain if it occurs anywhere past the PSP memory block*/);
+
 	uint16_t bigsize=0;
 	uint16_t mem_strat=memAllocStrategy;
 	uint16_t mcb_segment=dos.firstMCB;
@@ -197,7 +225,6 @@ bool DOS_AllocateMemory(uint16_t * segment,uint16_t * blocks) {
 
 	DOS_MCB mcb(0);
 	DOS_MCB mcb_next(0);
-	DOS_MCB psp_mcb(dos.psp()-1);
 	char psp_name[9];
 	psp_mcb.GetFileName(psp_name);
 	if (umb_start==UMB_START_SEG && (dos.loaded_codepage == 936 || dos.loaded_codepage == 950 || dos.loaded_codepage == 951)) {
@@ -640,6 +667,7 @@ void DOS_SetupMemory(void) {
 		/* map memory as normal, the BIOS initialization is the code responsible
 		 * for subtracting 32KB from top of system memory for video memory. */
 		mcb.SetSize(/*normally 0x97FF*/(seg_limit-1) - DOS_MEM_START - mcb_sizes);
+		CONV_MAX_SEG = seg_limit;
 	} else if (machine==MCH_PCJR) {
 		/* If there is more than 128KB of RAM, then the MCB chain must be constructed
 		 * to exclude video memory. In that case, the BIOS values in the BDA will report
@@ -656,6 +684,7 @@ void DOS_SetupMemory(void) {
 			mcb_devicedummy.SetPSPSeg(MCB_FREE);
 			mcb_devicedummy.SetSize(/*0x9FFF*/(seg_limit-1) - 0x2000);
 			mcb_devicedummy.SetType(0x5a);
+			CONV_MAX_SEG = seg_limit;
 
 			/* exclude PCJr graphics region */
 			mcb_devicedummy.SetPt((uint16_t)0x17ff);
@@ -670,6 +699,7 @@ void DOS_SetupMemory(void) {
 		else {
 			/* Normal MCB chain, nothing special */
 			mcb.SetSize(/*normally 0x97FF*/(seg_limit-1) - DOS_MEM_START - mcb_sizes);
+			CONV_MAX_SEG = seg_limit;
 		}
 	} else {
 #ifndef DEBUG_ALLOC
@@ -684,6 +714,7 @@ void DOS_SetupMemory(void) {
 		/* complete memory up to 640k available */
 		/* last paragraph used to add UMB chain to low-memory MCB chain */
 		mcb.SetSize(/*0x9FFE*/(seg_limit-2) - DOS_MEM_START - mcb_sizes);
+		CONV_MAX_SEG = seg_limit-1;
 	}
 
 	dos.firstMCB=DOS_MEM_START;