diff --git a/arch/powerpc/kvm/book3s_hv.c b/arch/powerpc/kvm/book3s_hv.c
index ba0492f9de65..ad8dc4ccdaab 100644
--- a/arch/powerpc/kvm/book3s_hv.c
+++ b/arch/powerpc/kvm/book3s_hv.c
@@ -4898,6 +4898,18 @@ int kvmhv_run_single_vcpu(struct kvm_vcpu *vcpu, u64 time_limit,
 							   BOOK3S_INTERRUPT_EXTERNAL, 0);
 			else
 				lpcr |= LPCR_MER;
+		} else {
+			/*
+			 * L1's copy of L2's LPCR (vcpu->arch.vcore->lpcr) can get its MER bit
+			 * unexpectedly set - for e.g. during NMI handling when all register
+			 * states are synchronized from L0 to L1. L1 needs to inform L0 about
+			 * MER=1 only when there are pending external interrupts.
+			 * In the above if check, MER bit is set if there are pending
+			 * external interrupts. Hence, explicity mask off MER bit
+			 * here as otherwise it may generate spurious interrupts in L2 KVM
+			 * causing an endless loop, which results in L2 guest getting hung.
+			 */
+			lpcr &= ~LPCR_MER;
 		}
 	} else if (vcpu->arch.pending_exceptions ||
 		   vcpu->arch.doorbell_request ||