diff --git a/Lib/test/test_uuid.py b/Lib/test/test_uuid.py
index 5f9ab048cdeb6c..2a99f43489f7bd 100755
--- a/Lib/test/test_uuid.py
+++ b/Lib/test/test_uuid.py
@@ -950,6 +950,7 @@ def test_uuid7_monotonicity(self):
             self.uuid,
             _last_timestamp_v7=0,
             _last_counter_v7=0,
+            _last_counter_v7_overflow=False,
         ):
             # 1 Jan 2023 12:34:56.123_456_789
             timestamp_ns = 1672533296_123_456_789  # ns precision
@@ -1024,6 +1025,7 @@ def test_uuid7_timestamp_backwards(self):
                 self.uuid,
                 _last_timestamp_v7=fake_last_timestamp_v7,
                 _last_counter_v7=counter,
+                _last_counter_v7_overflow=False,
             ),
             mock.patch('time.time_ns', return_value=timestamp_ns),
             mock.patch('os.urandom', return_value=tail_bytes) as urand
@@ -1049,9 +1051,13 @@ def test_uuid7_overflow_counter(self):
         timestamp_ns = 1672533296_123_456_789  # ns precision
         timestamp_ms, _ = divmod(timestamp_ns, 1_000_000)
 
+        # By design, counters have their MSB set to 0 so they
+        # will not be able to doubly overflow (they are still
+        # 42-bit integers).
         new_counter_hi = random.getrandbits(11)
         new_counter_lo = random.getrandbits(30)
         new_counter = (new_counter_hi << 30) | new_counter_lo
+        new_counter &= 0x1ff_ffff_ffff
 
         tail = random.getrandbits(32)
         random_bits = (new_counter << 32) | tail
@@ -1063,11 +1069,14 @@ def test_uuid7_overflow_counter(self):
                 _last_timestamp_v7=timestamp_ms,
                 # same timestamp, but force an overflow on the counter
                 _last_counter_v7=0x3ff_ffff_ffff,
+                _last_counter_v7_overflow=False,
             ),
             mock.patch('time.time_ns', return_value=timestamp_ns),
             mock.patch('os.urandom', return_value=random_data) as urand
         ):
+            self.assertFalse(self.uuid._last_counter_v7_overflow)
             u = self.uuid.uuid7()
+            self.assertTrue(self.uuid._last_counter_v7_overflow)
             urand.assert_called_with(10)
             equal(u.variant, self.uuid.RFC_4122)
             equal(u.version, 7)
@@ -1082,6 +1091,17 @@ def test_uuid7_overflow_counter(self):
             equal((u.int >> 32) & 0x3fff_ffff, new_counter_lo)
             equal(u.int & 0xffff_ffff, tail)
 
+            # Check that the timestamp of future UUIDs created within
+            # the same logical millisecond does not advance after the
+            # counter overflowed. In addition, even if the counter could
+            # be incremented, we are still in an "overflow" state as the
+            # timestamp should not be modified unless we re-overflow.
+            #
+            # See https://github.com/python/cpython/issues/138862.
+            v = self.uuid.uuid7()
+            equal(v.time, unix_ts_ms)
+            self.assertTrue(self.uuid._last_counter_v7_overflow)
+
     def test_uuid8(self):
         equal = self.assertEqual
         u = self.uuid.uuid8()
diff --git a/Lib/uuid.py b/Lib/uuid.py
index c0150a59d7cb9a..a0750326de831f 100644
--- a/Lib/uuid.py
+++ b/Lib/uuid.py
@@ -832,6 +832,18 @@ def uuid6(node=None, clock_seq=None):
 
 _last_timestamp_v7 = None
 _last_counter_v7 = 0  # 42-bit counter
+# Indicate whether one or more counter overflow(s) happened in the same frame.
+#
+# Since the timestamp is incremented after a counter overflow by design,
+# we must prevent incrementing the timestamp again in consecutive calls
+# for which the logical timestamp millisecond remains the same.
+#
+# If the resampled counter hits an overflow again within the same time,
+# we want to advance the timestamp again and resample the timestamp.
+#
+# See https://github.com/python/cpython/issues/138862.
+_last_counter_v7_overflow = False
+
 
 def _uuid7_get_counter_and_tail():
     rand = int.from_bytes(os.urandom(10))
@@ -862,18 +874,29 @@ def uuid7():
 
     global _last_timestamp_v7
     global _last_counter_v7
+    global _last_counter_v7_overflow
 
     nanoseconds = time.time_ns()
     timestamp_ms = nanoseconds // 1_000_000
 
     if _last_timestamp_v7 is None or timestamp_ms > _last_timestamp_v7:
         counter, tail = _uuid7_get_counter_and_tail()
+        # Clear the overflow state every new millisecond.
+        _last_counter_v7_overflow = False
     else:
         if timestamp_ms < _last_timestamp_v7:
-            timestamp_ms = _last_timestamp_v7 + 1
+            # The clock went backwards or we are within the same timestamp
+            # after a counter overflow. We follow the RFC for in the former
+            # case. In the latter case, we re-use the already advanced
+            # timestamp (it was updated when we detected the overflow).
+            if _last_counter_v7_overflow:
+                timestamp_ms = _last_timestamp_v7
+            else:
+                timestamp_ms = _last_timestamp_v7 + 1
         # advance the 42-bit counter
         counter = _last_counter_v7 + 1
         if counter > 0x3ff_ffff_ffff:
+            _last_counter_v7_overflow = True
             # advance the 48-bit timestamp
             timestamp_ms += 1
             counter, tail = _uuid7_get_counter_and_tail()
diff --git a/Misc/NEWS.d/next/Library/2026-03-29-19-53-09.gh-issue-138862.kFhLY4.rst b/Misc/NEWS.d/next/Library/2026-03-29-19-53-09.gh-issue-138862.kFhLY4.rst
new file mode 100644
index 00000000000000..939cdd71f55510
--- /dev/null
+++ b/Misc/NEWS.d/next/Library/2026-03-29-19-53-09.gh-issue-138862.kFhLY4.rst
@@ -0,0 +1,4 @@
+:mod:`uuid`: the timestamp of UUIDv7 objects generated within the same
+millisecond after encountering a counter overflow is only incremented once
+for the entire batch of UUIDv7 objects instead at each object creation.
+Patch by Bénédikt Tran.