diff --git a/Include/cpython/pystate.h b/Include/cpython/pystate.h
index e0d2ac9bf93ad8..65bc11ca0f5ba9 100644
--- a/Include/cpython/pystate.h
+++ b/Include/cpython/pystate.h
@@ -83,8 +83,6 @@ struct _ts {
         unsigned int bound_gilstate:1;
         /* Currently in use (maybe holds the GIL). */
         unsigned int active:1;
-        /* Currently holds the GIL. */
-        unsigned int holds_gil:1;
 
         /* various stages of finalization */
         unsigned int finalizing:1;
@@ -92,7 +90,7 @@ struct _ts {
         unsigned int finalized:1;
 
         /* padding to align to 4 bytes */
-        unsigned int :23;
+        unsigned int :24;
     } _status;
 #ifdef Py_BUILD_CORE
 #  define _PyThreadState_WHENCE_NOTSET -1
@@ -103,6 +101,10 @@ struct _ts {
 #  define _PyThreadState_WHENCE_GILSTATE 4
 #  define _PyThreadState_WHENCE_EXEC 5
 #endif
+
+    /* Currently holds the GIL. Must be its own field to avoid data races */
+    int holds_gil;
+
     int _whence;
 
     /* Thread state (_Py_THREAD_ATTACHED, _Py_THREAD_DETACHED, _Py_THREAD_SUSPENDED).
diff --git a/Include/internal/pycore_pystate.h b/Include/internal/pycore_pystate.h
index 9ec59e60f609ab..f3667a8aa71c27 100644
--- a/Include/internal/pycore_pystate.h
+++ b/Include/internal/pycore_pystate.h
@@ -27,6 +27,10 @@ extern "C" {
 // "suspended" state. Only the thread performing a stop-the-world pause may
 // transition a thread from the "suspended" state back to the "detached" state.
 //
+// The "shutting down" state is used when the interpreter is being finalized.
+// Threads in this state can't do anything other than block the OS thread.
+// (See _PyThreadState_HangThread).
+//
 // State transition diagram:
 //
 //            (bound thread)        (stop-the-world thread)
@@ -37,9 +41,10 @@ extern "C" {
 //
 // The (bound thread) and (stop-the-world thread) labels indicate which thread
 // is allowed to perform the transition.
-#define _Py_THREAD_DETACHED     0
-#define _Py_THREAD_ATTACHED     1
-#define _Py_THREAD_SUSPENDED    2
+#define _Py_THREAD_DETACHED         0
+#define _Py_THREAD_ATTACHED         1
+#define _Py_THREAD_SUSPENDED        2
+#define _Py_THREAD_SHUTTING_DOWN    3
 
 
 /* Check if the current thread is the main thread.
@@ -118,7 +123,8 @@ extern _Py_thread_local PyThreadState *_Py_tss_tstate;
 extern int _PyThreadState_CheckConsistency(PyThreadState *tstate);
 #endif
 
-int _PyThreadState_MustExit(PyThreadState *tstate);
+extern int _PyThreadState_MustExit(PyThreadState *tstate);
+extern void _PyThreadState_HangThread(PyThreadState *tstate);
 
 // Export for most shared extensions, used via _PyThreadState_GET() static
 // inline function.
@@ -169,6 +175,11 @@ extern void _PyThreadState_Detach(PyThreadState *tstate);
 // to the "detached" state.
 extern void _PyThreadState_Suspend(PyThreadState *tstate);
 
+// Mark the thread state as "shutting down". This is used during interpreter
+// and runtime finalization. The thread may no longer attach to the
+// interpreter and will instead block via _PyThreadState_HangThread().
+extern void _PyThreadState_SetShuttingDown(PyThreadState *tstate);
+
 // Perform a stop-the-world pause for all threads in the all interpreters.
 //
 // Threads in the "attached" state are paused and transitioned to the "GC"
@@ -238,7 +249,7 @@ PyAPI_FUNC(PyThreadState *) _PyThreadState_NewBound(
     PyInterpreterState *interp,
     int whence);
 extern PyThreadState * _PyThreadState_RemoveExcept(PyThreadState *tstate);
-extern void _PyThreadState_DeleteList(PyThreadState *list);
+extern void _PyThreadState_DeleteList(PyThreadState *list, int is_after_fork);
 extern void _PyThreadState_ClearMimallocHeaps(PyThreadState *tstate);
 
 // Export for '_testinternalcapi' shared extension
diff --git a/Include/internal/pycore_runtime_init.h b/Include/internal/pycore_runtime_init.h
index 1260b957ce9482..2ec32b64adde0b 100644
--- a/Include/internal/pycore_runtime_init.h
+++ b/Include/internal/pycore_runtime_init.h
@@ -171,6 +171,8 @@ extern PyTypeObject _PyExc_MemoryError;
 #define _PyThreadStateImpl_INIT \
     { \
         .base = _PyThreadState_INIT, \
+        /* The thread and the interpreter's linked list hold a reference */ \
+        .refcount = 2, \
     }
 
 #define _PyThreadState_INIT \
diff --git a/Include/internal/pycore_tstate.h b/Include/internal/pycore_tstate.h
index 624b29e32ed463..6f50bb2f26307a 100644
--- a/Include/internal/pycore_tstate.h
+++ b/Include/internal/pycore_tstate.h
@@ -21,6 +21,10 @@ typedef struct _PyThreadStateImpl {
     // semi-public fields are in PyThreadState.
     PyThreadState base;
 
+    // The reference count field is used to synchronize deallocation of the
+    // thread state during runtime finalization.
+    Py_ssize_t refcount;
+
     // These are addresses, but we need to convert to ints to avoid UB.
     uintptr_t c_stack_top;
     uintptr_t c_stack_soft_limit;
diff --git a/Misc/NEWS.d/next/Core_and_Builtins/2025-02-27-18-48-42.gh-issue-124878.DS0MIL.rst b/Misc/NEWS.d/next/Core_and_Builtins/2025-02-27-18-48-42.gh-issue-124878.DS0MIL.rst
new file mode 100644
index 00000000000000..842566433d5597
--- /dev/null
+++ b/Misc/NEWS.d/next/Core_and_Builtins/2025-02-27-18-48-42.gh-issue-124878.DS0MIL.rst
@@ -0,0 +1,2 @@
+Fix race conditions during runtime finalization that could lead to accessing
+freed memory.
diff --git a/Modules/_threadmodule.c b/Modules/_threadmodule.c
index dab6b395cb2e46..d423854b8ebff3 100644
--- a/Modules/_threadmodule.c
+++ b/Modules/_threadmodule.c
@@ -333,9 +333,6 @@ thread_run(void *boot_raw)
     // _PyRuntimeState_SetFinalizing() is called. At this point, all Python
     // threads must exit, except of the thread calling Py_Finalize() which
     // holds the GIL and must not exit.
-    //
-    // At this stage, tstate can be a dangling pointer (point to freed memory),
-    // it's ok to call _PyThreadState_MustExit() with a dangling pointer.
     if (_PyThreadState_MustExit(tstate)) {
         // Don't call PyThreadState_Clear() nor _PyThreadState_DeleteCurrent().
         // These functions are called on tstate indirectly by Py_Finalize()
diff --git a/Modules/posixmodule.c b/Modules/posixmodule.c
index bf8ad19416304f..25ebc98435c5da 100644
--- a/Modules/posixmodule.c
+++ b/Modules/posixmodule.c
@@ -715,7 +715,7 @@ PyOS_AfterFork_Child(void)
     // may call destructors.
     PyThreadState *list = _PyThreadState_RemoveExcept(tstate);
     _PyEval_StartTheWorldAll(&_PyRuntime);
-    _PyThreadState_DeleteList(list);
+    _PyThreadState_DeleteList(list, /*is_after_fork=*/1);
 
     _PyImport_ReInitLock(tstate->interp);
     _PyImport_ReleaseLock(tstate->interp);
diff --git a/Python/ceval_gil.c b/Python/ceval_gil.c
index 7a3cd8d8044739..2c1cc17b2ffa13 100644
--- a/Python/ceval_gil.c
+++ b/Python/ceval_gil.c
@@ -6,8 +6,8 @@
 #include "pycore_pyerrors.h"      // _PyErr_GetRaisedException()
 #include "pycore_pylifecycle.h"   // _PyErr_Print()
 #include "pycore_pymem.h"         // _PyMem_IsPtrFreed()
+#include "pycore_pystate.h"       // PyThread_hang_thread()
 #include "pycore_pystats.h"       // _Py_PrintSpecializationStats()
-#include "pycore_pythread.h"      // PyThread_hang_thread()
 
 /*
    Notes about the implementation:
@@ -206,7 +206,7 @@ drop_gil_impl(PyThreadState *tstate, struct _gil_runtime_state *gil)
     _Py_ANNOTATE_RWLOCK_RELEASED(&gil->locked, /*is_write=*/1);
     _Py_atomic_store_int_relaxed(&gil->locked, 0);
     if (tstate != NULL) {
-        tstate->_status.holds_gil = 0;
+        tstate->holds_gil = 0;
     }
     COND_SIGNAL(gil->cond);
     MUTEX_UNLOCK(gil->mutex);
@@ -231,7 +231,7 @@ drop_gil(PyInterpreterState *interp, PyThreadState *tstate, int final_release)
     // Check if we have the GIL before dropping it. tstate will be NULL if
     // take_gil() detected that this thread has been destroyed, in which case
     // we know we have the GIL.
-    if (tstate != NULL && !tstate->_status.holds_gil) {
+    if (tstate != NULL && !tstate->holds_gil) {
         return;
     }
 #endif
@@ -296,15 +296,14 @@ take_gil(PyThreadState *tstate)
            thread which called Py_Finalize(), this thread cannot continue.
 
            This code path can be reached by a daemon thread after Py_Finalize()
-           completes. In this case, tstate is a dangling pointer: points to
-           PyThreadState freed memory.
+           completes.
 
            This used to call a *thread_exit API, but that was not safe as it
            lacks stack unwinding and local variable destruction important to
            C++. gh-87135: The best that can be done is to hang the thread as
            the public APIs calling this have no error reporting mechanism (!).
          */
-        PyThread_hang_thread();
+        _PyThreadState_HangThread(tstate);
     }
 
     assert(_PyThreadState_CheckConsistency(tstate));
@@ -353,7 +352,7 @@ take_gil(PyThreadState *tstate)
                 }
                 // gh-87135: hang the thread as *thread_exit() is not a safe
                 // API. It lacks stack unwind and local variable destruction.
-                PyThread_hang_thread();
+                _PyThreadState_HangThread(tstate);
             }
             assert(_PyThreadState_CheckConsistency(tstate));
 
@@ -404,11 +403,11 @@ take_gil(PyThreadState *tstate)
         /* tstate could be a dangling pointer, so don't pass it to
            drop_gil(). */
         drop_gil(interp, NULL, 1);
-        PyThread_hang_thread();
+        _PyThreadState_HangThread(tstate);
     }
     assert(_PyThreadState_CheckConsistency(tstate));
 
-    tstate->_status.holds_gil = 1;
+    tstate->holds_gil = 1;
     _Py_unset_eval_breaker_bit(tstate, _PY_GIL_DROP_REQUEST_BIT);
     update_eval_breaker_for_thread(interp, tstate);
 
@@ -460,7 +459,7 @@ PyEval_ThreadsInitialized(void)
 static inline int
 current_thread_holds_gil(struct _gil_runtime_state *gil, PyThreadState *tstate)
 {
-    int holds_gil = tstate->_status.holds_gil;
+    int holds_gil = tstate->holds_gil;
 
     // holds_gil is the source of truth; check that last_holder and gil->locked
     // are consistent with it.
diff --git a/Python/pylifecycle.c b/Python/pylifecycle.c
index 1a7f312a604614..4007e43c98d640 100644
--- a/Python/pylifecycle.c
+++ b/Python/pylifecycle.c
@@ -2036,18 +2036,23 @@ _Py_Finalize(_PyRuntimeState *runtime)
 
     // XXX Call something like _PyImport_Disable() here?
 
-    /* Destroy the state of all threads of the interpreter, except of the
+    /* Remove the state of all threads of the interpreter, except for the
        current thread. In practice, only daemon threads should still be alive,
        except if wait_for_thread_shutdown() has been cancelled by CTRL+C.
-       Clear frames of other threads to call objects destructors. Destructors
-       will be called in the current Python thread. Since
-       _PyRuntimeState_SetFinalizing() has been called, no other Python thread
-       can take the GIL at this point: if they try, they will exit
-       immediately. We start the world once we are the only thread state left,
+       We start the world once we are the only thread state left,
        before we call destructors. */
     PyThreadState *list = _PyThreadState_RemoveExcept(tstate);
+    for (PyThreadState *p = list; p != NULL; p = p->next) {
+        _PyThreadState_SetShuttingDown(p);
+    }
     _PyEval_StartTheWorldAll(runtime);
-    _PyThreadState_DeleteList(list);
+
+    /* Clear frames of other threads to call objects destructors. Destructors
+       will be called in the current Python thread. Since
+       _PyRuntimeState_SetFinalizing() has been called, no other Python thread
+       can take the GIL at this point: if they try, they will hang in
+       _PyThreadState_HangThread. */
+    _PyThreadState_DeleteList(list, /*is_after_fork=*/0);
 
     /* At this point no Python code should be running at all.
        The only thread state left should be the main thread of the main
diff --git a/Python/pystate.c b/Python/pystate.c
index 72e2627e95b559..bfefd1044c725b 100644
--- a/Python/pystate.c
+++ b/Python/pystate.c
@@ -1461,6 +1461,15 @@ free_threadstate(_PyThreadStateImpl *tstate)
     }
 }
 
+static void
+decref_threadstate(_PyThreadStateImpl *tstate)
+{
+    if (_Py_atomic_add_ssize(&tstate->refcount, -1) == 1) {
+        // The last reference to the thread state is gone.
+        free_threadstate(tstate);
+    }
+}
+
 /* Get the thread state to a minimal consistent state.
    Further init happens in pylifecycle.c before it can be used.
    All fields not initialized here are expected to be zeroed out,
@@ -1925,8 +1934,12 @@ _PyThreadState_RemoveExcept(PyThreadState *tstate)
 // Deletes the thread states in the linked list `list`.
 //
 // This is intended to be used in conjunction with _PyThreadState_RemoveExcept.
+//
+// If `is_after_fork` is true, the thread states are immediately freed.
+// Otherwise, they are decref'd because they may still be referenced by an
+// OS thread.
 void
-_PyThreadState_DeleteList(PyThreadState *list)
+_PyThreadState_DeleteList(PyThreadState *list, int is_after_fork)
 {
     // The world can't be stopped because we PyThreadState_Clear() can
     // call destructors.
@@ -1936,7 +1949,12 @@ _PyThreadState_DeleteList(PyThreadState *list)
     for (p = list; p; p = next) {
         next = p->next;
         PyThreadState_Clear(p);
-        free_threadstate((_PyThreadStateImpl *)p);
+        if (is_after_fork) {
+            free_threadstate((_PyThreadStateImpl *)p);
+        }
+        else {
+            decref_threadstate((_PyThreadStateImpl *)p);
+        }
     }
 }
 
@@ -2069,12 +2087,19 @@ static void
 tstate_wait_attach(PyThreadState *tstate)
 {
     do {
-        int expected = _Py_THREAD_SUSPENDED;
-
-        // Wait until we're switched out of SUSPENDED to DETACHED.
-        _PyParkingLot_Park(&tstate->state, &expected, sizeof(tstate->state),
-                           /*timeout=*/-1, NULL, /*detach=*/0);
-
+        int state = _Py_atomic_load_int_relaxed(&tstate->state);
+        if (state == _Py_THREAD_SUSPENDED) {
+            // Wait until we're switched out of SUSPENDED to DETACHED.
+            _PyParkingLot_Park(&tstate->state, &state, sizeof(tstate->state),
+                               /*timeout=*/-1, NULL, /*detach=*/0);
+        }
+        else if (state == _Py_THREAD_SHUTTING_DOWN) {
+            // We're shutting down, so we can't attach.
+            _PyThreadState_HangThread(tstate);
+        }
+        else {
+            assert(state == _Py_THREAD_DETACHED);
+        }
         // Once we're back in DETACHED we can re-attach
     } while (!tstate_try_attach(tstate));
 }
@@ -2105,7 +2130,7 @@ _PyThreadState_Attach(PyThreadState *tstate)
         tstate_activate(tstate);
 
 #ifdef Py_GIL_DISABLED
-        if (_PyEval_IsGILEnabled(tstate) && !tstate->_status.holds_gil) {
+        if (_PyEval_IsGILEnabled(tstate) && !tstate->holds_gil) {
             // The GIL was enabled between our call to _PyEval_AcquireLock()
             // and when we attached (the GIL can't go from enabled to disabled
             // here because only a thread holding the GIL can disable
@@ -2188,6 +2213,15 @@ _PyThreadState_Suspend(PyThreadState *tstate)
     HEAD_UNLOCK(runtime);
 }
 
+void
+_PyThreadState_SetShuttingDown(PyThreadState *tstate)
+{
+    _Py_atomic_store_int(&tstate->state, _Py_THREAD_SHUTTING_DOWN);
+#ifdef Py_GIL_DISABLED
+    _PyParkingLot_UnparkAll(&tstate->state);
+#endif
+}
+
 // Decrease stop-the-world counter of remaining number of threads that need to
 // pause. If we are the final thread to pause, notify the requesting thread.
 static void
@@ -2988,43 +3022,27 @@ _PyThreadState_CheckConsistency(PyThreadState *tstate)
 #endif
 
 
-// Check if a Python thread must exit immediately, rather than taking the GIL
-// if Py_Finalize() has been called.
+// Check if a Python thread must call _PyThreadState_HangThread(), rather than
+// taking the GIL or attaching to the interpreter if Py_Finalize() has been
+// called.
 //
 // When this function is called by a daemon thread after Py_Finalize() has been
-// called, the GIL does no longer exist.
-//
-// tstate can be a dangling pointer (point to freed memory): only tstate value
-// is used, the pointer is not deferenced.
+// called, the GIL may no longer exist.
 //
 // tstate must be non-NULL.
 int
 _PyThreadState_MustExit(PyThreadState *tstate)
 {
-    /* bpo-39877: Access _PyRuntime directly rather than using
-       tstate->interp->runtime to support calls from Python daemon threads.
-       After Py_Finalize() has been called, tstate can be a dangling pointer:
-       point to PyThreadState freed memory. */
-    unsigned long finalizing_id = _PyRuntimeState_GetFinalizingID(&_PyRuntime);
-    PyThreadState *finalizing = _PyRuntimeState_GetFinalizing(&_PyRuntime);
-    if (finalizing == NULL) {
-        // XXX This isn't completely safe from daemon thraeds,
-        // since tstate might be a dangling pointer.
-        finalizing = _PyInterpreterState_GetFinalizing(tstate->interp);
-        finalizing_id = _PyInterpreterState_GetFinalizingID(tstate->interp);
-    }
-    // XXX else check &_PyRuntime._main_interpreter._initial_thread
-    if (finalizing == NULL) {
-        return 0;
-    }
-    else if (finalizing == tstate) {
-        return 0;
-    }
-    else if (finalizing_id == PyThread_get_thread_ident()) {
-        /* gh-109793: we must have switched interpreters. */
-        return 0;
-    }
-    return 1;
+    int state = _Py_atomic_load_int_relaxed(&tstate->state);
+    return state == _Py_THREAD_SHUTTING_DOWN;
+}
+
+void
+_PyThreadState_HangThread(PyThreadState *tstate)
+{
+    _PyThreadStateImpl *tstate_impl = (_PyThreadStateImpl *)tstate;
+    decref_threadstate(tstate_impl);
+    PyThread_hang_thread();
 }
 
 /********************/
diff --git a/Python/qsbr.c b/Python/qsbr.c
index 0df1285cc8e063..5b689c6039c950 100644
--- a/Python/qsbr.c
+++ b/Python/qsbr.c
@@ -240,7 +240,7 @@ _Py_qsbr_unregister(PyThreadState *tstate)
     // gh-119369: GIL must be released (if held) to prevent deadlocks, because
     // we might not have an active tstate, which means that blocking on PyMutex
     // locks will not implicitly release the GIL.
-    assert(!tstate->_status.holds_gil);
+    assert(!tstate->holds_gil);
 
     PyMutex_Lock(&shared->mutex);
     // NOTE: we must load (or reload) the thread state's qbsr inside the mutex
diff --git a/Tools/tsan/suppressions.txt b/Tools/tsan/suppressions.txt
index c70b0ddca059c2..6bda5ecd570889 100644
--- a/Tools/tsan/suppressions.txt
+++ b/Tools/tsan/suppressions.txt
@@ -1,8 +1,5 @@
 # This file contains suppressions for the default (with GIL) build.
 # reference: https://github.com/google/sanitizers/wiki/ThreadSanitizerSuppressions
 
-# gh-124878: race condition when interpreter finalized while daemon thread runs
-race:free_threadstate
-
 # https://gist.github.com/mpage/daaf32b39180c1989572957b943eb665
 thread:pthread_create
diff --git a/Tools/tsan/suppressions_free_threading.txt b/Tools/tsan/suppressions_free_threading.txt
index c32c43db19cb96..fd47c85af1adb1 100644
--- a/Tools/tsan/suppressions_free_threading.txt
+++ b/Tools/tsan/suppressions_free_threading.txt
@@ -10,29 +10,20 @@
 # These entries are for warnings that trigger in a library function, as called
 # by a CPython function.
 
-# gh-124878: race condition when interpreter finalized while daemon thread runs
-race:free_threadstate
-
 # These warnings trigger directly in a CPython function.
 
 race_top:assign_version_tag
 race_top:_multiprocessing_SemLock_acquire_impl
 race_top:_Py_slot_tp_getattr_hook
-race_top:add_threadstate
 race_top:dump_traceback
 race_top:fatal_error
 race_top:_multiprocessing_SemLock_release_impl
 race_top:_PyFrame_GetCode
 race_top:_PyFrame_Initialize
-race_top:PyInterpreterState_ThreadHead
 race_top:_PyObject_TryGetInstanceAttribute
-race_top:PyThreadState_Next
 race_top:PyUnstable_InterpreterFrame_GetLine
-race_top:tstate_delete_common
-race_top:tstate_is_freed
 race_top:type_modified_unlocked
 race_top:write_thread_id
-race_top:PyThreadState_Clear
 
 # gh-129068: race on shared range iterators (test_free_threading.test_zip.ZipThreading.test_threading)
 race_top:rangeiter_next