diff --git a/kernel/userspace.c b/kernel/userspace.c
index 24a59b94012..17680d042c9 100644
--- a/kernel/userspace.c
+++ b/kernel/userspace.c
@@ -49,6 +49,25 @@ LOG_MODULE_DECLARE(os, CONFIG_KERNEL_LOG_LEVEL);
 #ifdef CONFIG_DYNAMIC_OBJECTS
 static struct k_spinlock lists_lock;       /* kobj rbtree/dlist */
 static struct k_spinlock objfree_lock;     /* k_object_free */
+
+#ifdef CONFIG_GEN_PRIV_STACKS
+/* On ARM MPU we may have two different alignment requirement
+ * when dynamically allocating thread stacks, one for the privileged
+ * stack and other for the user stack, so we need to account the
+ * worst alignment scenario and reserve space for that.
+ */
+#ifdef CONFIG_ARM_MPU
+#define STACK_ELEMENT_DATA_SIZE(size) \
+	(sizeof(struct z_stack_data) + CONFIG_PRIVILEGED_STACK_SIZE + \
+	Z_THREAD_STACK_OBJ_ALIGN(size) + Z_THREAD_STACK_SIZE_ADJUST(size))
+#else
+#define STACK_ELEMENT_DATA_SIZE(size) (sizeof(struct z_stack_data) + \
+	Z_THREAD_STACK_SIZE_ADJUST(size))
+#endif /* CONFIG_ARM_MPU */
+#else
+#define STACK_ELEMENT_DATA_SIZE(size) Z_THREAD_STACK_SIZE_ADJUST(size)
+#endif /* CONFIG_GEN_PRIV_STACKS */
+
 #endif
 static struct k_spinlock obj_lock;         /* kobj struct data */
 
@@ -130,18 +149,45 @@ uint8_t *z_priv_stack_find(k_thread_stack_t *stack)
 #define DYN_OBJ_DATA_ALIGN_K_THREAD	(sizeof(void *))
 #endif
 
+#ifdef CONFIG_DYNAMIC_THREAD_STACK_SIZE
+#ifndef CONFIG_MPU_STACK_GUARD
+#define DYN_OBJ_DATA_ALIGN_K_THREAD_STACK \
+	Z_THREAD_STACK_OBJ_ALIGN(CONFIG_PRIVILEGED_STACK_SIZE)
+#else
+#define DYN_OBJ_DATA_ALIGN_K_THREAD_STACK \
+	Z_THREAD_STACK_OBJ_ALIGN(CONFIG_DYNAMIC_THREAD_STACK_SIZE)
+#endif /* !CONFIG_MPU_STACK_GUARD */
+#else
+#define DYN_OBJ_DATA_ALIGN_K_THREAD_STACK \
+	Z_THREAD_STACK_OBJ_ALIGN(ARCH_STACK_PTR_ALIGN)
+#endif /* CONFIG_DYNAMIC_THREAD_STACK_SIZE */
+
 #define DYN_OBJ_DATA_ALIGN		\
 	MAX(DYN_OBJ_DATA_ALIGN_K_THREAD, (sizeof(void *)))
 
-struct dyn_obj {
+struct dyn_obj_base {
 	struct z_object kobj;
 	sys_dnode_t dobj_list;
 	struct rbnode node; /* must be immediately before data member */
+};
+
+struct dyn_obj {
+	struct dyn_obj_base base;
 
 	/* The object itself */
 	uint8_t data[] __aligned(DYN_OBJ_DATA_ALIGN_K_THREAD);
 };
 
+/* Thread stacks impose a very restrict alignment. Use this alignment
+ * (generally page size) for all objects will cause a lot waste memory.
+ */
+struct dyn_obj_stack {
+	struct dyn_obj_base base;
+
+	/* The object itself */
+	void *data;
+};
+
 extern struct z_object *z_object_gperf_find(const void *obj);
 extern void z_object_gperf_wordlist_foreach(_wordlist_cb_func_t func,
 					     void *context);
@@ -193,6 +239,9 @@ static size_t obj_align_get(enum k_objects otype)
 		ret = __alignof(struct dyn_obj);
 #endif
 		break;
+	case K_OBJ_THREAD_STACK_ELEMENT:
+		ret = __alignof(struct dyn_obj_stack);
+		break;
 	default:
 		ret = __alignof(struct dyn_obj);
 		break;
@@ -206,36 +255,30 @@ static bool node_lessthan(struct rbnode *a, struct rbnode *b)
 	return a < b;
 }
 
-static inline struct dyn_obj *node_to_dyn_obj(struct rbnode *node)
-{
-	return CONTAINER_OF(node, struct dyn_obj, node);
-}
-
-static inline struct rbnode *dyn_obj_to_node(void *obj)
-{
-	struct dyn_obj *dobj = CONTAINER_OF(obj, struct dyn_obj, data);
-
-	return &dobj->node;
-}
-
-static struct dyn_obj *dyn_object_find(void *obj)
+static struct dyn_obj_base *dyn_object_find(void *obj)
 {
 	struct rbnode *node;
-	struct dyn_obj *ret;
+	struct dyn_obj_base *ret;
+	k_spinlock_key_t key;
 
 	/* For any dynamically allocated kernel object, the object
 	 * pointer is just a member of the containing struct dyn_obj,
 	 * so just a little arithmetic is necessary to locate the
 	 * corresponding struct rbnode
 	 */
-	node = dyn_obj_to_node(obj);
+	key = k_spin_lock(&lists_lock);
 
-	k_spinlock_key_t key = k_spin_lock(&lists_lock);
-	if (rb_contains(&obj_rb_tree, node)) {
-		ret = node_to_dyn_obj(node);
-	} else {
-		ret = NULL;
+	RB_FOR_EACH(&obj_rb_tree, node) {
+		ret = CONTAINER_OF(node, struct dyn_obj_base, node);
+		if (ret->kobj.name == obj) {
+			goto end;
+		}
 	}
+
+	/* No object found */
+	ret = NULL;
+
+ end:
 	k_spin_unlock(&lists_lock, key);
 
 	return ret;
@@ -304,18 +347,61 @@ static void thread_idx_free(uintptr_t tidx)
 	sys_bitfield_set_bit((mem_addr_t)_thread_idx_map, tidx);
 }
 
-struct z_object *z_dynamic_object_aligned_create(size_t align, size_t size)
+static struct z_object *dynamic_object_create(enum k_objects otype, size_t align,
+					      size_t size)
 {
-	struct dyn_obj *dyn;
+	struct dyn_obj_base *dyn;
 
-	dyn = z_thread_aligned_alloc(align, sizeof(*dyn) + size);
-	if (dyn == NULL) {
-		LOG_ERR("could not allocate kernel object, out of memory");
-		return NULL;
+	if (otype == K_OBJ_THREAD_STACK_ELEMENT) {
+		struct dyn_obj_stack *stack;
+		size_t adjusted_size;
+
+		if (size == 0) {
+			return NULL;
+		}
+
+		adjusted_size = STACK_ELEMENT_DATA_SIZE(size);
+		stack = z_thread_aligned_alloc(align, sizeof(struct dyn_obj_stack));
+		if (stack == NULL) {
+			return NULL;
+		}
+		dyn = &stack->base;
+
+		stack->data = z_thread_aligned_alloc(DYN_OBJ_DATA_ALIGN_K_THREAD_STACK,
+						     adjusted_size);
+		if (stack->data == NULL) {
+			k_free(stack);
+			return NULL;
+		}
+
+#ifdef CONFIG_GEN_PRIV_STACKS
+		struct z_stack_data *stack_data = (struct z_stack_data *)
+			((uint8_t *)stack->data + adjusted_size - sizeof(*stack_data));
+		stack_data->priv = (uint8_t *)stack->data;
+		dyn->kobj.data.stack_data = stack_data;
+#ifdef CONFIG_ARM_MPU
+		dyn->kobj.name = (void *)ROUND_UP(
+			  ((uint8_t *)stack->data + CONFIG_PRIVILEGED_STACK_SIZE),
+			  Z_THREAD_STACK_OBJ_ALIGN(size));
+#else
+		dyn->kobj.name = stack->data;
+#endif
+#else
+		dyn->kobj.name = stack->data;
+#endif
+	} else {
+		struct dyn_obj *obj;
+
+		obj = z_thread_aligned_alloc(align,
+			     sizeof(struct dyn_obj) + obj_size_get(otype) + size);
+		if (obj == NULL) {
+			return NULL;
+		}
+		dyn = &obj->base;
+		dyn->kobj.name = &obj->data;
 	}
 
-	dyn->kobj.name = &dyn->data;
-	dyn->kobj.type = K_OBJ_ANY;
+	dyn->kobj.type = otype;
 	dyn->kobj.flags = 0;
 	(void)memset(dyn->kobj.perms, 0, CONFIG_MAX_THREAD_BYTES);
 
@@ -328,7 +414,18 @@ struct z_object *z_dynamic_object_aligned_create(size_t align, size_t size)
 	return &dyn->kobj;
 }
 
-static void *z_object_alloc(enum k_objects otype, size_t object_size)
+struct z_object *z_dynamic_object_aligned_create(size_t align, size_t size)
+{
+	struct z_object *obj = dynamic_object_create(K_OBJ_ANY, align, size);
+
+	if (obj == NULL) {
+		LOG_ERR("could not allocate kernel object, out of memory");
+	}
+
+	return obj;
+}
+
+static void *z_object_alloc(enum k_objects otype, size_t size)
 {
 	struct z_object *zo;
 	uintptr_t tidx = 0;
@@ -348,8 +445,6 @@ static void *z_object_alloc(enum k_objects otype, size_t object_size)
 	/* The following are currently not allowed at all */
 	case K_OBJ_FUTEX:			/* Lives in user memory */
 	case K_OBJ_SYS_MUTEX:			/* Lives in user memory */
-	case K_OBJ_THREAD_STACK_ELEMENT:
-		break;
 	case K_OBJ_NET_SOCKET:			/* Indeterminate size */
 		LOG_ERR("forbidden object type '%s' requested",
 			otype_to_str(otype));
@@ -359,15 +454,13 @@ static void *z_object_alloc(enum k_objects otype, size_t object_size)
 		break;
 	}
 
-	zo = z_dynamic_object_aligned_create(obj_align_get(otype),
-					     object_size);
+	zo = dynamic_object_create(otype, obj_align_get(otype), size);
 	if (zo == NULL) {
 		if (otype == K_OBJ_THREAD) {
 			thread_idx_free(tidx);
 		}
 		return NULL;
 	}
-	zo->type = otype;
 
 	if (otype == K_OBJ_THREAD) {
 		zo->data.thread_id = tidx;
@@ -388,7 +481,7 @@ static void *z_object_alloc(enum k_objects otype, size_t object_size)
 
 void *z_impl_k_object_alloc(enum k_objects otype)
 {
-	return z_object_alloc(otype, obj_size_get(otype));
+	return z_object_alloc(otype, 0);
 }
 
 void *z_impl_k_object_alloc_size(enum k_objects otype, size_t size)
@@ -398,7 +491,7 @@ void *z_impl_k_object_alloc_size(enum k_objects otype, size_t size)
 
 void k_object_free(void *obj)
 {
-	struct dyn_obj *dyn;
+	struct dyn_obj_base *dyn;
 
 	/* This function is intentionally not exposed to user mode.
 	 * There's currently no robust way to track that an object isn't
@@ -430,15 +523,15 @@ struct z_object *z_object_find(const void *obj)
 	ret = z_object_gperf_find(obj);
 
 	if (ret == NULL) {
-		struct dyn_obj *dynamic_obj;
+		struct dyn_obj_base *dyn;
 
 		/* The cast to pointer-to-non-const violates MISRA
 		 * 11.8 but is justified since we know dynamic objects
 		 * were not declared with a const qualifier.
 		 */
-		dynamic_obj = dyn_object_find((void *)obj);
-		if (dynamic_obj != NULL) {
-			ret = &dynamic_obj->kobj;
+		dyn = dyn_object_find((void *)obj);
+		if (dyn != NULL) {
+			ret = &dyn->kobj;
 		}
 	}
 
@@ -447,7 +540,7 @@ struct z_object *z_object_find(const void *obj)
 
 void z_object_wordlist_foreach(_wordlist_cb_func_t func, void *context)
 {
-	struct dyn_obj *obj, *next;
+	struct dyn_obj_base *obj, *next;
 
 	z_object_gperf_wordlist_foreach(func, context);
 
@@ -487,7 +580,7 @@ static void unref_check(struct z_object *ko, uintptr_t index)
 
 	void *vko = ko;
 
-	struct dyn_obj *dyn = CONTAINER_OF(vko, struct dyn_obj, kobj);
+	struct dyn_obj_base *dyn = CONTAINER_OF(vko, struct dyn_obj_base, kobj);
 
 	__ASSERT(IS_PTR_ALIGNED(dyn, struct dyn_obj), "unaligned z_object");
 
diff --git a/tests/kernel/threads/dynamic_thread_stack/prj.conf b/tests/kernel/threads/dynamic_thread_stack/prj.conf
index 4377c2ec60b..07c01bd661f 100644
--- a/tests/kernel/threads/dynamic_thread_stack/prj.conf
+++ b/tests/kernel/threads/dynamic_thread_stack/prj.conf
@@ -6,7 +6,7 @@ CONFIG_MAX_THREAD_BYTES=5
 CONFIG_DYNAMIC_THREAD=y
 CONFIG_DYNAMIC_THREAD_POOL_SIZE=2
 CONFIG_DYNAMIC_THREAD_ALLOC=y
-CONFIG_HEAP_MEM_POOL_SIZE=16384
+CONFIG_HEAP_MEM_POOL_SIZE=20480
 CONFIG_ZTEST_STACK_SIZE=2048
 CONFIG_MAIN_STACK_SIZE=2048
 
diff --git a/tests/kernel/threads/dynamic_thread_stack/src/main.c b/tests/kernel/threads/dynamic_thread_stack/src/main.c
index 86848e4249e..e72f4d2f51b 100644
--- a/tests/kernel/threads/dynamic_thread_stack/src/main.c
+++ b/tests/kernel/threads/dynamic_thread_stack/src/main.c
@@ -17,7 +17,7 @@
 
 #define MAX_HEAP_STACKS (CONFIG_HEAP_MEM_POOL_SIZE / STACK_OBJ_SIZE)
 
-ZTEST_DMEM bool flag[CONFIG_DYNAMIC_THREAD_POOL_SIZE];
+ZTEST_DMEM bool flag[MAX(CONFIG_DYNAMIC_THREAD_POOL_SIZE, MAX_HEAP_STACKS)];
 
 static void func(void *arg1, void *arg2, void *arg3)
 {
@@ -63,6 +63,7 @@ ZTEST(dynamic_thread_stack, test_dynamic_thread_stack_pool)
 
 	/* spawn our threads */
 	for (size_t i = 0; i < CONFIG_DYNAMIC_THREAD_POOL_SIZE; ++i) {
+		flag[i] = false;
 		tid[i] = k_thread_create(&th[i], stack[i],
 				CONFIG_DYNAMIC_THREAD_STACK_SIZE, func,
 				&flag[i], NULL, NULL, 0,
@@ -86,7 +87,6 @@ ZTEST(dynamic_thread_stack, test_dynamic_thread_stack_alloc)
 {
 	size_t N;
 	static k_tid_t tid[MAX_HEAP_STACKS];
-	static bool flag[MAX_HEAP_STACKS];
 	static struct k_thread th[MAX_HEAP_STACKS];
 	static k_thread_stack_t *stack[MAX_HEAP_STACKS];
 
@@ -102,18 +102,17 @@ ZTEST(dynamic_thread_stack, test_dynamic_thread_stack_alloc)
 	for (N = 0; N < MAX_HEAP_STACKS; ++N) {
 		stack[N] = k_thread_stack_alloc(CONFIG_DYNAMIC_THREAD_STACK_SIZE,
 						IS_ENABLED(CONFIG_USERSPACE) ? K_USER : 0);
-		zassert_not_null(stack[N]);
-	}
-
-	if (CONFIG_DYNAMIC_THREAD_POOL_SIZE == 0) {
-		/* ensure that no more thread stacks can be allocated from the heap */
-		zassert_is_null(k_thread_stack_alloc(CONFIG_DYNAMIC_THREAD_STACK_SIZE,
-						     IS_ENABLED(CONFIG_USERSPACE) ? K_USER : 0));
+		if (stack[N] == NULL) {
+			break;
+		}
 	}
 
 	/* spwan our threads */
 	for (size_t i = 0; i < N; ++i) {
-		tid[i] = k_thread_create(&th[i], stack[i], 0, func, &flag[i], NULL, NULL, 0,
+		flag[i] = false;
+		tid[i] = k_thread_create(&th[i], stack[i],
+					 CONFIG_DYNAMIC_THREAD_STACK_SIZE, func,
+					 &flag[i], NULL, NULL, 0,
 					 K_USER | K_INHERIT_PERMS, K_NO_WAIT);
 	}
 
diff --git a/tests/kernel/threads/dynamic_thread_stack/testcase.yaml b/tests/kernel/threads/dynamic_thread_stack/testcase.yaml
index 7dc7b6f47bd..69f5651406f 100644
--- a/tests/kernel/threads/dynamic_thread_stack/testcase.yaml
+++ b/tests/kernel/threads/dynamic_thread_stack/testcase.yaml
@@ -33,6 +33,7 @@ tests:
       # 010
       - CONFIG_DYNAMIC_THREAD_POOL_SIZE=0
       - CONFIG_DYNAMIC_THREAD_ALLOC=y
+      - CONFIG_DYNAMIC_THREAD_PREFER_ALLOC=y
       - CONFIG_USERSPACE=n
   kernel.threads.dynamic_thread.stack.no_pool.alloc.user:
     tags: userspace
@@ -40,6 +41,7 @@ tests:
       # 011
       - CONFIG_DYNAMIC_THREAD_POOL_SIZE=0
       - CONFIG_DYNAMIC_THREAD_ALLOC=y
+      - CONFIG_DYNAMIC_THREAD_PREFER_ALLOC=y
       - CONFIG_USERSPACE=y
   kernel.threads.dynamic_thread.stack.pool.no_alloc.no_user:
     extra_configs:
@@ -57,6 +59,7 @@ tests:
   kernel.threads.dynamic_thread.stack.pool.alloc.no_user:
     extra_configs:
       # 110
+      - CONFIG_DYNAMIC_THREAD_PREFER_ALLOC=y
       - CONFIG_DYNAMIC_THREAD_POOL_SIZE=2
       - CONFIG_DYNAMIC_THREAD_ALLOC=y
       - CONFIG_USERSPACE=n
@@ -64,6 +67,7 @@ tests:
     tags: userspace
     extra_configs:
       # 111
+      - CONFIG_DYNAMIC_THREAD_PREFER_ALLOC=y
       - CONFIG_DYNAMIC_THREAD_POOL_SIZE=2
       - CONFIG_DYNAMIC_THREAD_ALLOC=y
       - CONFIG_USERSPACE=y