diff --git a/packages/atom/src/Atom.ts b/packages/atom/src/Atom.ts
index 55f10ce..08726e2 100644
--- a/packages/atom/src/Atom.ts
+++ b/packages/atom/src/Atom.ts
@@ -1802,19 +1802,23 @@ export const kvs = <A>(options: {
   const resultAtom = options.runtime.atom(
     Effect.flatMap(
       KeyValueStore.KeyValueStore,
-      (store) => Effect.flatten(store.forSchema(options.schema).get(options.key))
+      (store) => store.forSchema(options.schema).get(options.key)
     )
   )
   return writable(
     (get) => {
       get.mount(setAtom)
-      const value = Result.value(get(resultAtom))
-      if (Option.isSome(value)) {
-        return value.value
-      }
-      const defaultValue = options.defaultValue()
-      get.set(setAtom, defaultValue)
-      return defaultValue
+      get.subscribe(resultAtom, (result) => {
+        if (!Result.isSuccess(result)) return
+        if (Option.isSome(result.value)) {
+          get.setSelf(result.value.value)
+        } else {
+          const value = Option.getOrElse(get.self<A>(), options.defaultValue)
+          get.setSelf(value)
+          get.set(setAtom, value)
+        }
+      }, { immediate: true })
+      return Option.getOrElse(get.self<A>(), options.defaultValue)
     },
     (ctx, value: A) => {
       ctx.set(setAtom, value as any)
diff --git a/packages/atom/test/Atom.test.ts b/packages/atom/test/Atom.test.ts
index 5d76dc0..68ca9ab 100644
--- a/packages/atom/test/Atom.test.ts
+++ b/packages/atom/test/Atom.test.ts
@@ -2,6 +2,7 @@ import * as Atom from "@effect-atom/atom/Atom"
 import * as Hydration from "@effect-atom/atom/Hydration"
 import * as Registry from "@effect-atom/atom/Registry"
 import * as Result from "@effect-atom/atom/Result"
+import * as KeyValueStore from "@effect/platform/KeyValueStore"
 import { addEqualityTesters, afterEach, assert, beforeEach, describe, expect, it, test, vitest } from "@effect/vitest"
 import { Cause, Either, Equal, FiberRef, Schema, Struct, Subscribable, SubscriptionRef } from "effect"
 import * as Arr from "effect/Array"
@@ -1501,6 +1502,109 @@ describe("Atom", () => {
     assert.strictEqual(result.value.b, 4)
     assert.strictEqual(runs, 2)
   })
+
+  describe("kvs", () => {
+    it("memoizes defaultValue while loading empty storage", async () => {
+      let calls = 0
+      const storage = new Map<string, string>()
+
+      const DelayedKVS = Layer.succeed(
+        KeyValueStore.KeyValueStore,
+        KeyValueStore.makeStringOnly({
+          get: (key) =>
+            Effect.gen(function*() {
+              yield* Effect.sleep(20)
+              return Option.fromNullable(storage.get(key))
+            }),
+          set: (key, value) =>
+            Effect.sync(() => {
+              storage.set(key, value)
+            }),
+          remove: (key) =>
+            Effect.sync(() => {
+              storage.delete(key)
+            }),
+          clear: Effect.sync(() => storage.clear()),
+          size: Effect.sync(() => storage.size)
+        })
+      )
+
+      const kvsRuntime = Atom.runtime(DelayedKVS)
+      const atom = Atom.kvs({
+        runtime: kvsRuntime,
+        key: "default-value-key",
+        schema: Schema.Number,
+        defaultValue: () => {
+          calls++
+          return 0
+        }
+      })
+
+      const r = Registry.make()
+      r.mount(atom)
+
+      expect(r.get(atom)).toEqual(0)
+      expect(calls).toEqual(1)
+
+      await vitest.advanceTimersByTimeAsync(50)
+
+      expect(r.get(atom)).toEqual(0)
+      expect(calls).toEqual(1)
+    })
+
+    it("preserves existing value after async load completes", async () => {
+      vitest.useRealTimers()
+      // Create an in-memory store with a pre-existing value
+      const storage = new Map<string, string>()
+      storage.set("test-key", JSON.stringify(42))
+
+      // Create a delayed KeyValueStore to simulate async loading
+      // Use KeyValueStore.make to get proper forSchema support
+      const DelayedKVS = Layer.succeed(
+        KeyValueStore.KeyValueStore,
+        KeyValueStore.makeStringOnly({
+          get: (key) =>
+            Effect.gen(function*() {
+              yield* Effect.sleep(20) // Short delay to create Initial state window
+              return Option.fromNullable(storage.get(key))
+            }),
+          set: (key, value) =>
+            Effect.sync(() => {
+              storage.set(key, value)
+            }),
+          remove: (key) =>
+            Effect.sync(() => {
+              storage.delete(key)
+            }),
+          clear: Effect.sync(() => storage.clear()),
+          size: Effect.sync(() => storage.size)
+        })
+      )
+
+      const kvsRuntime = Atom.runtime(DelayedKVS)
+      const atom = Atom.kvs({
+        runtime: kvsRuntime,
+        key: "test-key",
+        schema: Schema.Number,
+        defaultValue: () => 0
+      })
+
+      const r = Registry.make()
+      r.mount(atom)
+
+      // First read during Initial state returns default
+      const value = r.get(atom)
+      expect(value).toEqual(0)
+
+      // Wait for async load AND any set effects to complete
+      await new Promise((resolve) => setTimeout(resolve, 50))
+
+      // THE KEY ASSERTION: After load completes, storage should still have original value.
+      // The bug was that the default (0) would be written during Initial state,
+      // corrupting the storage before the async load could read it.
+      expect(storage.get("test-key")).toEqual(JSON.stringify(42))
+    })
+  })
 })
 
 interface BuildCounter {