diff --git a/packages/test/src/test-interceptors.ts b/packages/test/src/test-interceptors.ts
index d79415ce7..3c3bf9db2 100644
--- a/packages/test/src/test-interceptors.ts
+++ b/packages/test/src/test-interceptors.ts
@@ -12,14 +12,16 @@ import { WorkflowClient, WorkflowFailedError } from '@temporalio/client';
 import { ApplicationFailure, TerminatedFailure } from '@temporalio/common';
 import { DefaultLogger, Runtime } from '@temporalio/worker';
 import { defaultPayloadConverter, WorkflowInfo } from '@temporalio/workflow';
-import { cleanOptionalStackTrace, compareStackTrace, RUN_INTEGRATION_TESTS, Worker } from './helpers';
+import { cleanOptionalStackTrace, compareStackTrace, REUSE_V8_CONTEXT, RUN_INTEGRATION_TESTS, Worker } from './helpers';
 import { defaultOptions } from './mock-native-worker';
 import {
   checkDisposeRan,
+  conditionWithTimeoutAfterDisposal,
   continueAsNewToDifferentWorkflow,
   initAndResetFlag,
   interceptorExample,
   internalsInterceptorExample,
+  successString,
   unblockOrCancel,
 } from './workflows';
 import { getSecretQuery, unblockWithSecretSignal } from './workflows/interceptor-example';
@@ -312,4 +314,43 @@ if (RUN_INTEGRATION_TESTS) {
       t.true(disposeFlagSetNow);
     });
   });
+
+  if (REUSE_V8_CONTEXT) {
+    // Test to trigger GH #1866
+    // When `reuseV8Context: true`, dispose() calls disableStorage() which disables the
+    // AsyncLocalStorage instance that stores cancellation scope.
+    // This causes CancellationScope.current() to return rootScope instead of the correct
+    // inner scope for workflows that continue afterward.
+    //
+    // The bug manifests in condition() with timeout: the finally block calls
+    // CancellationScope.current().cancel() to clean up.
+    // When storage is disabled, this incorrectly cancels the rootScope, failing the workflow with "Workflow cancelled".
+    test.serial('workflow disposal does not break CancellationScope in other workflows in reusable vm', async (t) => {
+      const taskQueue = 'test-reusable-vm-disposal-cancellation-scope';
+      const worker = await Worker.create({
+        ...defaultOptions,
+        taskQueue,
+      });
+
+      const client = new WorkflowClient();
+      const result = await worker.runUntil(async () => {
+        // Fill the cache with workflow that complete immediately
+        await client.execute(successString, { taskQueue, workflowId: uuid4() });
+
+        // Start the condition workflow
+        const conditionHandle = await client.start(conditionWithTimeoutAfterDisposal, {
+          taskQueue,
+          workflowId: uuid4(),
+        });
+
+        // Run another workflow to trigger an evictions and disposal() while
+        // conditionWithTimeoutAfterDisposal is cached and waiting
+        await client.execute(successString, { taskQueue, workflowId: uuid4() });
+
+        // If dispose incorrectly disables the cancellation scope storage, then it will fail with CancelledFailure: "Workflow cancelled"
+        return await conditionHandle.result();
+      });
+      t.is(result, 'done');
+    });
+  }
 }
diff --git a/packages/test/src/workflows/index.ts b/packages/test/src/workflows/index.ts
index dc0776f09..f1bbdf28e 100644
--- a/packages/test/src/workflows/index.ts
+++ b/packages/test/src/workflows/index.ts
@@ -59,6 +59,7 @@ export * from './promise-then-promise';
 export * from './race';
 export * from './random';
 export * from './reject-promise';
+export * from './reusable-vm-disposal-bug';
 export * from './run-activity-in-different-task-queue';
 export * from './scope-cancelled-while-waiting-on-external-workflow-cancellation';
 export * from './set-timeout-after-microtasks';
diff --git a/packages/test/src/workflows/reusable-vm-disposal-bug.ts b/packages/test/src/workflows/reusable-vm-disposal-bug.ts
new file mode 100644
index 000000000..171d05ef9
--- /dev/null
+++ b/packages/test/src/workflows/reusable-vm-disposal-bug.ts
@@ -0,0 +1,20 @@
+import { condition } from '@temporalio/workflow';
+
+/**
+ * Workflow for reproducing the GH #1866
+ *
+ * When the bug is present:
+ * 1. First condition times out
+ * 2. finally block calls CancellationScope.current().cancel()
+ * 3. With disabled storage, current() returns rootScope
+ * 4. rootScope.cancel() is called, failing the workflow with "Workflow cancelled"
+ *
+ * Actual failure happens on the second `condition` where when creating the new
+ * cancellation scope, we see that the parent/root scope is already canceled.
+ */
+export async function conditionWithTimeoutAfterDisposal(): Promise<string> {
+  const alwaysFalse = false;
+  await condition(() => alwaysFalse, '500ms');
+  await condition(() => alwaysFalse, '500ms');
+  return 'done';
+}
diff --git a/packages/worker/src/workflow/reusable-vm.ts b/packages/worker/src/workflow/reusable-vm.ts
index e719c919c..b77f7efd7 100644
--- a/packages/worker/src/workflow/reusable-vm.ts
+++ b/packages/worker/src/workflow/reusable-vm.ts
@@ -210,6 +210,15 @@ export class ReusableVMWorkflowCreator implements WorkflowCreator {
    * Cleanup the pre-compiled script
    */
   public async destroy(): Promise<void> {
+    if (this._context) {
+      vm.runInContext(
+        `{
+          __TEMPORAL__.api.destroy();
+        }`,
+        this._context,
+        { timeout: this.isolateExecutionTimeoutMs, displayErrors: true }
+      );
+    }
     globalHandlers.removeWorkflowBundle(this.workflowBundle);
     delete this._context;
   }
diff --git a/packages/worker/src/workflow/vm.ts b/packages/worker/src/workflow/vm.ts
index 0478a8d0c..e3d0af1e2 100644
--- a/packages/worker/src/workflow/vm.ts
+++ b/packages/worker/src/workflow/vm.ts
@@ -126,6 +126,7 @@ export class VMWorkflowCreator implements WorkflowCreator {
 export class VMWorkflow extends BaseVMWorkflow {
   public async dispose(): Promise<void> {
     this.workflowModule.dispose();
+    this.workflowModule.destroy();
     VMWorkflowCreator.workflowByRunId.delete(this.runId);
     delete this.context;
   }
diff --git a/packages/workflow/src/worker-interface.ts b/packages/workflow/src/worker-interface.ts
index 14ec355f8..8fcce8951 100644
--- a/packages/workflow/src/worker-interface.ts
+++ b/packages/workflow/src/worker-interface.ts
@@ -6,12 +6,12 @@
 import { encodeVersioningBehavior, IllegalStateError, WorkflowFunctionWithOptions } from '@temporalio/common';
 import { composeInterceptors } from '@temporalio/common/lib/interceptors';
 import { coresdk } from '@temporalio/proto';
-import { disableStorage } from './cancellation-scope';
-import { disableUpdateStorage } from './update-scope';
 import { WorkflowInterceptorsFactory } from './interceptors';
 import { WorkflowCreateOptionsInternal } from './interfaces';
 import { Activator } from './internals';
 import { setActivatorUntyped, getActivator } from './global-attributes';
+import { disableStorage } from './cancellation-scope';
+import { disableUpdateStorage } from './update-scope';
 
 // Export the type for use on the "worker" side
 export { PromiseStackStore } from './internals';
@@ -256,16 +256,18 @@ export function dispose(): void {
   const activator = getActivator();
   activator.rethrowSynchronously = true;
   try {
-    const dispose = composeInterceptors(activator.interceptors.internals, 'dispose', async () => {
-      disableStorage();
-      disableUpdateStorage();
-    });
+    const dispose = composeInterceptors(activator.interceptors.internals, 'dispose', async () => {});
     dispose({});
   } finally {
     activator.rethrowSynchronously = false;
   }
 }
 
+export function destroy(): void {
+  disableStorage();
+  disableUpdateStorage();
+}
+
 function isWorkflowFunctionWithOptions(obj: any): obj is WorkflowFunctionWithOptions<any[], any> {
   if (obj == null) return false;
   return Object.hasOwn(obj, 'workflowDefinitionOptions');