diff --git a/src/main/java/com/fasterxml/jackson/databind/deser/SettableBeanProperty.java b/src/main/java/com/fasterxml/jackson/databind/deser/SettableBeanProperty.java
index ebfa4e07de..6a62f2effd 100644
--- a/src/main/java/com/fasterxml/jackson/databind/deser/SettableBeanProperty.java
+++ b/src/main/java/com/fasterxml/jackson/databind/deser/SettableBeanProperty.java
@@ -561,12 +561,16 @@ public final Object deserializeWith(JsonParser p, DeserializationContext ctxt,
             }
             return _nullProvider.getNullValue(ctxt);
         }
-        // 20-Oct-2016, tatu: Also tricky -- for now, report an error
         if (_valueTypeDeserializer != null) {
-            ctxt.reportBadDefinition(getType(),
-                    String.format("Cannot merge polymorphic property '%s'",
-                            getName()));
-//            return _valueDeserializer.deserializeWithType(p, ctxt, _valueTypeDeserializer);
+            // 25-Oct-2021 Added by James to support merging polymorphic property
+            // https://github.com/FasterXML/jackson-databind/issues/2541
+            // Please note we only support merging same type polymorphic property for now,
+            // merging different type is hard and usually doesn't make sense.
+            // Please note you need to configure {@link DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES} as false to
+            // enable this feature otherwise the unknown property exception will be thrown.
+            JavaType subType = ctxt.getTypeFactory().constructType(toUpdate.getClass());
+            JsonDeserializer<Object> subTypeValueDeserializer = ctxt.findContextualValueDeserializer(subType, this);
+            return subTypeValueDeserializer.deserialize(p, ctxt, toUpdate);
         }
         // 04-May-2018, tatu: [databind#2023] Coercion from String (mostly) can give null
         Object value = _valueDeserializer.deserialize(p, ctxt, toUpdate);
diff --git a/src/test/java/com/fasterxml/jackson/databind/deser/MergePolymorphicTest.java b/src/test/java/com/fasterxml/jackson/databind/deser/MergePolymorphicTest.java
new file mode 100644
index 0000000000..7abbbaf88d
--- /dev/null
+++ b/src/test/java/com/fasterxml/jackson/databind/deser/MergePolymorphicTest.java
@@ -0,0 +1,82 @@
+package com.fasterxml.jackson.databind.deser;
+
+import com.fasterxml.jackson.annotation.JsonMerge;
+import com.fasterxml.jackson.annotation.JsonSubTypes;
+import com.fasterxml.jackson.annotation.JsonTypeInfo;
+import com.fasterxml.jackson.core.JsonProcessingException;
+import com.fasterxml.jackson.databind.BaseMapTest;
+import com.fasterxml.jackson.databind.DeserializationFeature;
+import com.fasterxml.jackson.databind.ObjectMapper;
+
+public class MergePolymorphicTest extends BaseMapTest {
+
+    static class Root {
+        @JsonMerge
+        public Child child;
+    }
+
+    @JsonTypeInfo(use = JsonTypeInfo.Id.NAME)
+    @JsonSubTypes({
+        @JsonSubTypes.Type(value = ChildA.class, name = "ChildA"),
+        @JsonSubTypes.Type(value = ChildB.class, name = "ChildB")
+    })
+    static abstract class Child {
+    }
+
+    static class ChildA extends Child {
+        public String name;
+    }
+
+    static class ChildB extends Child {
+        public String code;
+    }
+
+    public void testPolymorphicNewObject() throws JsonProcessingException {
+        ObjectMapper mapper = new ObjectMapper().configure(DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES, false);
+        Root root = mapper.readValue("{\"child\": { \"@type\": \"ChildA\", \"name\": \"I'm child A\" }}", Root.class);
+        assertTrue(root.child instanceof ChildA);
+        assertEquals("I'm child A", ((ChildA) root.child).name);
+    }
+
+    public void testPolymorphicFromNullToNewObject() throws JsonProcessingException {
+        Root root = new Root();
+        ObjectMapper mapper = new ObjectMapper().configure(DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES, false);
+        mapper.readerForUpdating(root).readValue("{\"child\": { \"@type\": \"ChildA\", \"name\": \"I'm the new name\" }}");
+        assertTrue(root.child instanceof ChildA);
+        assertEquals("I'm the new name", ((ChildA) root.child).name);
+    }
+
+    public void testPolymorphicFromObjectToNull() throws JsonProcessingException {
+        Root root = new Root();
+        ChildA childA = new ChildA();
+        childA.name = "I'm child A";
+        root.child = childA;
+        ObjectMapper mapper = new ObjectMapper().configure(DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES, false);
+        mapper.readerForUpdating(root).readValue("{\"child\": null }");
+        assertTrue(root.child == null);
+    }
+
+    public void testPolymorphicPropertyCanBeMerged() throws JsonProcessingException {
+        Root root = new Root();
+        ChildA childA = new ChildA();
+        childA.name = "I'm child A";
+        root.child = childA;
+        ObjectMapper mapper = new ObjectMapper().configure(DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES, false);
+        mapper.readerForUpdating(root).readValue("{\"child\": { \"@type\": \"ChildA\", \"name\": \"I'm the new name\" }}");
+        assertTrue(root.child instanceof ChildA);
+        assertEquals("I'm the new name", ((ChildA) root.child).name);
+    }
+
+    public void testPolymorphicPropertyTypeCanNotBeChanged() throws JsonProcessingException {
+        Root root = new Root();
+        ChildA childA = new ChildA();
+        childA.name = "I'm child A";
+        root.child = childA;
+        ObjectMapper mapper = new ObjectMapper().configure(DeserializationFeature.FAIL_ON_UNKNOWN_PROPERTIES, false);
+        mapper.readerForUpdating(root).readValue("{\"child\": { \"@type\": \"ChildB\", \"code\": \"I'm the code\" }}");
+        // The polymorphic type can't be changed
+        assertTrue(root.child instanceof ChildA);
+        assertEquals("I'm child A", ((ChildA) root.child).name);
+    }
+
+}