diff --git a/src/cc65/codeopt.c b/src/cc65/codeopt.c
index f83a8d9f8..07764cd40 100644
--- a/src/cc65/codeopt.c
+++ b/src/cc65/codeopt.c
@@ -178,6 +178,7 @@ static OptFunc DOptShift3       = { OptShift3,       "OptShift3",        17, 0,
 static OptFunc DOptShift4       = { OptShift4,       "OptShift4",       100, 0, 0, 0, 0, 0 };
 static OptFunc DOptShift5       = { OptShift5,       "OptShift5",       110, 0, 0, 0, 0, 0 };
 static OptFunc DOptShift6       = { OptShift6,       "OptShift6",       200, 0, 0, 0, 0, 0 };
+static OptFunc DOptSignExtended = { OptSignExtended, "OptSignExtended",   0, 0, 0, 0, 0, 0 };
 static OptFunc DOptSize1        = { OptSize1,        "OptSize1",        100, 0, 0, 0, 0, 0 };
 static OptFunc DOptSize2        = { OptSize2,        "OptSize2",        100, 0, 0, 0, 0, 0 };
 static OptFunc DOptStackOps     = { OptStackOps,     "OptStackOps",     100, 0, 0, 0, 0, 0 };
@@ -280,6 +281,7 @@ static OptFunc* OptFuncs[] = {
     &DOptShift4,
     &DOptShift5,
     &DOptShift6,
+    &DOptSignExtended,
     &DOptSize1,
     &DOptSize2,
     &DOptStackOps,
@@ -713,6 +715,7 @@ static unsigned RunOptGroup3 (CodeSeg* S)
         C += RunOptFunc (S, &DOptPushPop1, 1);
         C += RunOptFunc (S, &DOptPushPop2, 1);
         C += RunOptFunc (S, &DOptPrecalc, 1);
+        C += RunOptFunc (S, &DOptSignExtended, 1);
 
         Changes += C;
 
diff --git a/src/cc65/coptind.c b/src/cc65/coptind.c
index 4bb236692..5fe3b5c03 100644
--- a/src/cc65/coptind.c
+++ b/src/cc65/coptind.c
@@ -1474,3 +1474,95 @@ unsigned OptPrecalc (CodeSeg* S)
     /* Return the number of changes made */
     return Changes;
 }
+
+
+
+unsigned OptSignExtended (CodeSeg* S)
+/* Change
+**
+**      lda     xxx     ; X is 0
+**      bpl     L1
+**      dex/ldx #$FF
+**  L1: cpx     #$00
+**      bpl     L2
+**
+** or
+**
+**      lda     xxx     ; X is 0
+**      bpl     L1
+**      dex/ldx #$FF
+**  L1: cpx     #$80
+**      bcc/bmi L2
+**
+** into
+**      lda     xxx     ; X is 0
+**      bpl     L2
+**      dex/ldx #$FF
+**
+** provided the C flag isn't used later.
+*/
+{
+    unsigned Changes = 0;
+    CodeEntry* L[5];
+    CodeEntry* X;
+    unsigned CheckStates;
+
+    /* Walk over the entries */
+    unsigned I = 0;
+    while (I < CS_GetEntryCount (S)) {
+
+        /* Get next entry */
+        L[0] = CS_GetEntry (S, I);
+
+        /* Check if it's a register load or transfer insn */
+        if (L[0]->OPC == OP65_LDA                   &&
+            CS_GetEntries (S, L+1, I+1, 4)          &&
+            !CS_RangeHasLabel (S, I+1, 2)           &&
+            CE_GetLabelCount (L[3]) == 1            &&
+            L[1]->JumpTo == CE_GetLabel (L[3], 0)   &&
+            (L[1]->Info & OF_CBRA) != 0             &&
+            GetBranchCond (L[1]->OPC) == BC_PL      &&
+            RegValIsKnown (L[2]->RI->Out.RegX)      &&
+            L[2]->RI->Out.RegX == 0xFF              &&
+            L[2]->OPC != OP65_JSR                   &&
+            (L[2]->Chg & REG_AXY) == REG_X) {
+
+            /* We find a sign extention */
+            CheckStates = PSTATE_CZN;
+            if (L[3]->OPC == OP65_CPX                       &&
+                CE_IsConstImm (L[3])                        &&
+                (L[4]->Info & OF_CBRA) != 0                 &&
+                ((L[3]->Num == 0x00                     &&
+                  GetBranchCond (L[4]->OPC) == BC_PL)       ||
+                ((L[3]->Num == 0x80                     &&
+                  GetBranchCond (L[4]->OPC) == BC_CC &&
+                  GetBranchCond (L[4]->OPC) == BC_MI)))) {
+
+                /* Check if the processor states set by the CPX are unused later */
+                if ((GetRegInfo (S, I+5, CheckStates) & CheckStates) == 0) {
+
+                    /* Change the target of the sign extention branch */
+                    X = NewCodeEntry (OP65_JPL, L[4]->AM, L[4]->Arg, L[4]->JumpTo, L[4]->LI);
+                    CS_InsertEntry (S, X, I+1);
+                    CS_DelEntry (S, I+2);
+
+                    /* Remove the old conditional branch */
+                    CS_DelEntries (S, I+3, 2);
+
+                    /* Remember, we had changes */
+                    ++Changes;
+
+                    /* Continue with the current insn */
+                    continue;
+                }
+            }
+        }
+
+        /* Next entry */
+        ++I;
+
+    }
+
+    /* Return the number of changes made */
+    return Changes;
+}
diff --git a/src/cc65/coptind.h b/src/cc65/coptind.h
index ab9179e96..496b23447 100644
--- a/src/cc65/coptind.h
+++ b/src/cc65/coptind.h
@@ -93,6 +93,31 @@ unsigned OptPrecalc (CodeSeg* S);
 ** known by a load of the final value.
 */
 
+unsigned OptSignExtended (CodeSeg* S);
+/* Change
+**
+**      lda     xxx     ; X is 0
+**      bpl     L1
+**      dex/ldx #$FF
+**  L1: cpx     #$00
+**      bpl     L2
+**
+** or
+**
+**      lda     xxx     ; X is 0
+**      bpl     L1
+**      dex/ldx #$FF
+**  L1: cpx     #$80
+**      bcc/bmi L2
+**
+** into
+**      lda     xxx     ; X is 0
+**      bpl     L2
+**      dex/ldx #$FF
+**
+** provided the C flag isn't used later.
+*/
+
 
 
 /* End of coptind.h */