diff --git a/string.c b/string.c
index d6fd73115b..c6dec224f1 100644
--- a/string.c
+++ b/string.c
@@ -1594,7 +1594,7 @@ rb_str_init(int argc, VALUE *argv, VALUE str)
                 const size_t osize = RSTRING(str)->as.heap.len + TERM_LEN(str);
                 char *new_ptr = ALLOC_N(char, (size_t)capa + termlen);
                 memcpy(new_ptr, old_ptr, osize < size ? osize : size);
-                FL_UNSET_RAW(str, STR_SHARED);
+                FL_UNSET_RAW(str, STR_SHARED|STR_NOFREE);
                 RSTRING(str)->as.heap.ptr = new_ptr;
 	    }
 	    else if (STR_HEAP_SIZE(str) != (size_t)capa + termlen) {
diff --git a/test/ruby/test_string.rb b/test/ruby/test_string.rb
index 746471553d..b6cb0321c8 100644
--- a/test/ruby/test_string.rb
+++ b/test/ruby/test_string.rb
@@ -107,6 +107,16 @@ PREP
 CODE
   end
 
+  # Bug #18154
+  def test_initialize_nofree_memory_leak
+    assert_no_memory_leak([], <<-PREP, <<-CODE, rss: true)
+code = proc {0.to_s.__send__(:initialize, capacity: 10000)}
+1_000.times(&code)
+PREP
+100_000.times(&code)
+CODE
+  end
+
   def test_AREF # '[]'
     assert_equal("A",  S("AooBar")[0])
     assert_equal("B",  S("FooBaB")[-1])
diff --git a/version.h b/version.h
index 242f985511..81ae97bb31 100644
--- a/version.h
+++ b/version.h
@@ -2,7 +2,7 @@
 # define RUBY_VERSION_MINOR RUBY_API_VERSION_MINOR
 #define RUBY_VERSION_TEENY 5
 #define RUBY_RELEASE_DATE RUBY_RELEASE_YEAR_STR"-"RUBY_RELEASE_MONTH_STR"-"RUBY_RELEASE_DAY_STR
-#define RUBY_PATCHLEVEL 196
+#define RUBY_PATCHLEVEL 197
 
 #define RUBY_RELEASE_YEAR 2021
 #define RUBY_RELEASE_MONTH 11