diff --git a/src/Lean/Meta/ExprDefEq.lean b/src/Lean/Meta/ExprDefEq.lean
index be730e9cbb46..dde3b7d3b215 100644
--- a/src/Lean/Meta/ExprDefEq.lean
+++ b/src/Lean/Meta/ExprDefEq.lean
@@ -1690,9 +1690,9 @@ private def isDefEqOnFailure (t s : Expr) : MetaM Bool := do
     tryUnificationHints t s <||> tryUnificationHints s t
 
 private def isDefEqProj : Expr → Expr → MetaM Bool
-  | Expr.proj m i t, Expr.proj n j s => pure (i == j && m == n) <&&> Meta.isExprDefEqAux t s
-  | Expr.proj structName 0 s, v => isDefEqSingleton structName s v
-  | v, Expr.proj structName 0 s => isDefEqSingleton structName s v
+  | .proj m i t, .proj n j s => pure (i == j && m == n) <&&> Meta.isExprDefEqAux t s
+  | .proj structName 0 s, v  => isDefEqSingleton structName s v
+  | v, .proj structName 0 s  => isDefEqSingleton structName s v
   | _, _ => pure false
 where
   /-- If `structName` is a structure with a single field and `(?m ...).1 =?= v`, then solve constraint as `?m ... =?= ⟨v⟩` -/
@@ -1779,25 +1779,30 @@ private def isExprDefEqExpensive (t : Expr) (s : Expr) : MetaM Bool := do
   whenUndefDo (isDefEqEta t s) do
   whenUndefDo (isDefEqEta s t) do
   if (← isDefEqProj t s) then return true
-  whenUndefDo (isDefEqNative t s) do
-  whenUndefDo (isDefEqNat t s) do
-  whenUndefDo (isDefEqOffset t s) do
-  whenUndefDo (isDefEqDelta t s) do
-  -- We try structure eta *after* lazy delta reduction;
-  -- otherwise we would end up applying it at every step of a reduction chain
-  -- as soon as one of the sides is a constructor application,
-  -- which is very costly because it requires us to unify the fields.
-  if (← (isDefEqEtaStruct t s <||> isDefEqEtaStruct s t)) then
-    return true
-  if t.isConst && s.isConst then
-    if t.constName! == s.constName! then isListLevelDefEqAux t.constLevels! s.constLevels! else return false
-  else if (← pure t.isApp <&&> pure s.isApp <&&> isDefEqApp t s) then
-    return true
+  let t' ← whnfCore t
+  let s' ← whnfCore s
+  if t != t' || s != s' then
+    Meta.isExprDefEqAux t' s'
   else
-    whenUndefDo (isDefEqProjInst t s) do
-    whenUndefDo (isDefEqStringLit t s) do
-    if (← isDefEqUnitLike t s) then return true else
-    isDefEqOnFailure t s
+    whenUndefDo (isDefEqNative t s) do
+    whenUndefDo (isDefEqNat t s) do
+    whenUndefDo (isDefEqOffset t s) do
+    whenUndefDo (isDefEqDelta t s) do
+    -- We try structure eta *after* lazy delta reduction;
+    -- otherwise we would end up applying it at every step of a reduction chain
+    -- as soon as one of the sides is a constructor application,
+    -- which is very costly because it requires us to unify the fields.
+    if (← (isDefEqEtaStruct t s <||> isDefEqEtaStruct s t)) then
+      return true
+    if t.isConst && s.isConst then
+      if t.constName! == s.constName! then isListLevelDefEqAux t.constLevels! s.constLevels! else return false
+    else if (← pure t.isApp <&&> pure s.isApp <&&> isDefEqApp t s) then
+      return true
+    else
+      whenUndefDo (isDefEqProjInst t s) do
+      whenUndefDo (isDefEqStringLit t s) do
+      if (← isDefEqUnitLike t s) then return true else
+      isDefEqOnFailure t s
 
 inductive DefEqCacheKind where
   | transient -- problem has mvars or is using nonstandard configuration, we should use transient cache
@@ -1863,14 +1868,41 @@ partial def isExprDefEqAuxImpl (t : Expr) (s : Expr) : MetaM Bool := withIncRecD
   whenUndefDo (isDefEqProofIrrel t s) do
   /-
     We also reduce projections here to prevent expensive defeq checks when unifying TC operations.
-    When unifying e.g. `@Neg.neg α (@Field.toNeg α inst1) =?= @Neg.neg α (@Field.toNeg α inst2)`,
+    When unifying e.g. `(@Field.toNeg α inst1).1 =?= (@Field.toNeg α inst2).1`,
     we only want to unify negation (and not all other field operations as well).
     Unifying the field instances slowed down unification: https://github.com/leanprover/lean4/issues/1986
-    We used to *not* reduce projections here, to support unifying `(?a).1 =?= (x, y).1`.
-    NOTE: this still seems to work because we don't eagerly unfold projection definitions to primitive projections.
+
+    Note that ew use `proj := .yesWithDeltaI` to ensure `whnfI` is used to reduce the projection structure.
+    We added this refinement to address a performance issue in code such as
+    ```
+    let val : Test := bar c1 key
+    have : val.1 = (bar c1 key).1 := rfl
+    ```
+    where `bar` is a complex function that takes a long time to be reduced.
+
+    Note that the current solution times out at unification problems such as
+    `(f x).1 =?= (g x).1` where `f`, `g` are defined as
+    ```
+    structure Foo where
+      x : Nat
+      y : Nat
+
+    def f (x : Nat) : Foo :=
+      { x, y := ack 10 10 }
+
+    def g (x : Nat) : Foo :=
+      { x, y := ack 10 11 }
+    ```
+    and `ack` is ackermann. We claim this is an abuse of the unifier.
+    That being said, we could in principle address this issue by implementing
+    lazy-delta reduction at `isDefEqProj`.
+
+    The current solution should be sufficient. In the past, we have used
+    `whnfCore t (config := { proj := .yes })` which more conservative than `.yesWithDeltaI`,
+    and it only created performance issues when handling TC unification problems.
   -/
-  let t' ← whnfCore t
-  let s' ← whnfCore s
+  let t' ← whnfCore t (config := { proj := .yesWithDeltaI })
+  let s' ← whnfCore s (config := { proj := .yesWithDeltaI })
   if t != t' || s != s' then
     isExprDefEqAuxImpl t' s'
   else
diff --git a/src/Lean/Meta/WHNF.lean b/src/Lean/Meta/WHNF.lean
index 1a5287901c29..a5b08970b734 100644
--- a/src/Lean/Meta/WHNF.lean
+++ b/src/Lean/Meta/WHNF.lean
@@ -342,6 +342,16 @@ inductive ProjReductionKind where
   Recall that `whnfCore` does not perform `delta` reduction (i.e., it will not unfold constant declarations), but `whnf` does.
   -/
   | yesWithDelta
+  /--
+  Projections `s.i` are reduced at `whnfCore`, and `whnfI` is used at `s` during the process.
+  Recall that `whnfI` is like `whnf` but uses transparency `instances`.
+  This option is stronger than `yes`, but weaker than `yesWithDelta`.
+  We use this option to ensure we reduce projections to prevent expensive defeq checks when unifying TC operations.
+  When unifying e.g. `(@Field.toNeg α inst1).1 =?= (@Field.toNeg α inst2).1`,
+  we only want to unify negation (and not all other field operations as well).
+  Unifying the field instances slowed down unification: https://github.com/leanprover/lean4/issues/1986
+  -/
+  | yesWithDeltaI
   deriving DecidableEq, Inhabited, Repr
 
 /--
@@ -566,12 +576,6 @@ private def whnfDelayedAssigned? (f' : Expr) (e : Expr) : MetaM (Option Expr) :=
 /--
 Apply beta-reduction, zeta-reduction (i.e., unfold let local-decls), iota-reduction,
 expand let-expressions, expand assigned meta-variables.
-
-The parameter `deltaAtProj` controls how to reduce projections `s.i`. If `deltaAtProj == true`,
-then delta reduction is used to reduce `s` (i.e., `whnf` is used), otherwise `whnfCore`.
-
-If `simpleReduceOnly`, then `iota` and projection reduction are not performed.
-Note that the value of `deltaAtProj` is irrelevant if `simpleReduceOnly = true`.
 -/
 partial def whnfCore (e : Expr) (config : WhnfCoreConfig := {}): MetaM Expr :=
   go e
@@ -613,11 +617,15 @@ where
                   return e
               | _ => return e
       | .proj _ i c =>
-        if config.proj == .no then return e
-        let c ← if config.proj == .yesWithDelta then whnf c else go c
-        match (← projectCore? c i) with
-        | some e => go e
-        | none => return e
+        let k (c : Expr) := do
+          match (← projectCore? c i) with
+          | some e => go e
+          | none => return e
+        match config.proj with
+        | .no => return e
+        | .yes => k (← go c)
+        | .yesWithDelta => k (← whnf c)
+        | .yesWithDeltaI => k (← whnfI c)
       | _ => unreachable!
 
 /--
diff --git a/src/kernel/type_checker.cpp b/src/kernel/type_checker.cpp
index 1de1dc73dd90..9adb025818c2 100644
--- a/src/kernel/type_checker.cpp
+++ b/src/kernel/type_checker.cpp
@@ -376,16 +376,8 @@ expr type_checker::whnf_fvar(expr const & e, bool cheap_rec, bool cheap_proj) {
     return e;
 }
 
-/* If `cheap == true`, then we don't perform delta-reduction when reducing major premise. */
-optional<expr> type_checker::reduce_proj(expr const & e, bool cheap_rec, bool cheap_proj) {
-    if (!proj_idx(e).is_small())
-        return none_expr();
-    unsigned idx = proj_idx(e).get_small_value();
-    expr c;
-    if (cheap_proj)
-        c = whnf_core(proj_expr(e), cheap_rec, cheap_proj);
-    else
-        c = whnf(proj_expr(e));
+/* Auxiliary method for `reduce_proj` */
+optional<expr> type_checker::reduce_proj_core(expr c, unsigned idx) {
     if (is_string_lit(c))
         c = string_lit_to_constructor(c);
     buffer<expr> args;
@@ -402,6 +394,19 @@ optional<expr> type_checker::reduce_proj(expr const & e, bool cheap_rec, bool ch
         return none_expr();
 }
 
+/* If `cheap == true`, then we don't perform delta-reduction when reducing major premise. */
+optional<expr> type_checker::reduce_proj(expr const & e, bool cheap_rec, bool cheap_proj) {
+    if (!proj_idx(e).is_small())
+        return none_expr();
+    unsigned idx = proj_idx(e).get_small_value();
+    expr c;
+    if (cheap_proj)
+        c = whnf_core(proj_expr(e), cheap_rec, cheap_proj);
+    else
+        c = whnf(proj_expr(e));
+    return reduce_proj_core(c, idx);
+}
+
 static bool is_let_fvar(local_ctx const & lctx, expr const & e) {
     lean_assert(is_fvar(e));
     if (optional<local_decl> decl = lctx.find_local_decl(e)) {
@@ -983,6 +988,33 @@ lbool type_checker::lazy_delta_reduction(expr & t_n, expr & s_n) {
     }
 }
 
+/*
+Auxiliary method for checking `t_n.idx =?= s_n.idx`.
+It lazily unfolds `t_n` and `s_n`.
+Recall that the simpler approach used at `Meta.ExprDefEq` cannot be used in the
+kernel since it does not have access to reducibility annotations.
+The approach used here is more complicated, but it is also more powerful.
+*/
+bool type_checker::lazy_delta_proj_reduction(expr & t_n, expr & s_n, nat const & idx) {
+    while (true) {
+        switch (lazy_delta_reduction_step(t_n, s_n)) {
+        case reduction_status::Continue:   break;
+        case reduction_status::DefEqual:   return true;
+        case reduction_status::DefUnknown:
+        case reduction_status::DefDiff:
+            if (idx.is_small()) {
+                unsigned i = idx.get_small_value();
+                if (auto t = reduce_proj_core(t_n, i)) {
+                if (auto s = reduce_proj_core(s_n, i)) {
+                    return is_def_eq_core(*t, *s);
+                }}
+            }
+            return is_def_eq_core(t_n, s_n);
+        }
+    }
+}
+
+
 static expr * g_string_mk = nullptr;
 
 lbool type_checker::try_string_lit_expansion_core(expr const & t, expr const & s) {
@@ -1054,8 +1086,12 @@ bool type_checker::is_def_eq_core(expr const & t, expr const & s) {
     if (is_fvar(t_n) && is_fvar(s_n) && fvar_name(t_n) == fvar_name(s_n))
         return true;
 
-    if (is_proj(t_n) && is_proj(s_n) && proj_idx(t_n) == proj_idx(s_n) && is_def_eq(proj_expr(t_n), proj_expr(s_n)))
-        return true;
+    if (is_proj(t_n) && is_proj(s_n) && proj_idx(t_n) == proj_idx(s_n)) {
+        expr t_c = proj_expr(t_n);
+        expr s_c = proj_expr(s_n);
+        if (lazy_delta_proj_reduction(t_c, s_c, proj_idx(t_n)))
+            return true;
+    }
 
     // Invoke `whnf_core` again, but now using `whnf` to reduce projections.
     expr t_n_n = whnf_core(t_n);
diff --git a/src/kernel/type_checker.h b/src/kernel/type_checker.h
index cb15eaca74c8..e38a60772bf8 100644
--- a/src/kernel/type_checker.h
+++ b/src/kernel/type_checker.h
@@ -63,6 +63,7 @@ class type_checker {
 
     enum class reduction_status { Continue, DefUnknown, DefEqual, DefDiff };
     optional<expr> reduce_recursor(expr const & e, bool cheap_rec, bool cheap_proj);
+    optional<expr> reduce_proj_core(expr c, unsigned idx);
     optional<expr> reduce_proj(expr const & e, bool cheap_rec, bool cheap_proj);
     expr whnf_fvar(expr const & e, bool cheap_rec, bool cheap_proj);
     optional<constant_info> is_delta(expr const & e) const;
@@ -91,6 +92,7 @@ class type_checker {
     void cache_failure(expr const & t, expr const & s);
     reduction_status lazy_delta_reduction_step(expr & t_n, expr & s_n);
     lbool lazy_delta_reduction(expr & t_n, expr & s_n);
+    bool lazy_delta_proj_reduction(expr & t_n, expr & s_n, nat const & idx);
     bool is_def_eq_core(expr const & t, expr const & s);
     /** \brief Like \c check, but ignores undefined universes */
     expr check_ignore_undefined_universes(expr const & e);
diff --git a/tests/lean/run/1986.lean b/tests/lean/run/1986.lean
index 68cf03faabab..04e5f6520c44 100644
--- a/tests/lean/run/1986.lean
+++ b/tests/lean/run/1986.lean
@@ -194,7 +194,7 @@ instance Pi.completeDistribLattice' {ι : Type _} {π : ι → Type _}
     [∀ i, CompleteDistribLattice (π i)] : CompleteDistribLattice (∀ i, π i) :=
 CompleteDistribLattice.mk (Pi.coframe.infᵢ_sup_le_sup_infₛ)
 
--- takes around 2 seconds wall clock time on my PC (but very quick in Lean 3)
+-- User: takes around 2 seconds wall clock time on my PC (but very quick in Lean 3)
 set_option maxHeartbeats 400 -- make sure it stays fast
 set_option synthInstance.maxHeartbeats 400
 instance Pi.completeDistribLattice'' {ι : Type _} {π : ι → Type _}
diff --git a/tests/lean/run/bv_math_lit_perf.lean b/tests/lean/run/bv_math_lit_perf.lean
index 8a43e7c2844f..098f2773d744 100644
--- a/tests/lean/run/bv_math_lit_perf.lean
+++ b/tests/lean/run/bv_math_lit_perf.lean
@@ -16,7 +16,7 @@ def f (x : BitVec 32) : Nat :=
   | 920#32 => 12
   | _      => 1000
 
-set_option maxHeartbeats 2800
+set_option maxHeartbeats 3000
 example : f 500#32 = x := by
   simp [f]
   sorry
diff --git a/tests/lean/run/isDefEqProjIssue.lean b/tests/lean/run/isDefEqProjIssue.lean
new file mode 100644
index 000000000000..15ba43b86dc3
--- /dev/null
+++ b/tests/lean/run/isDefEqProjIssue.lean
@@ -0,0 +1,85 @@
+import Lean
+open Lean
+
+-- We need a structure as this is related to isDefEq problems of the form `e1.proj =?= e2.proj`.
+structure Test where
+  x : Nat
+
+-- We need a data structure with functions that are not meant for reduction purposes.
+abbrev Cache := HashMap Nat Test
+
+def Cache.insert (cache : Cache) (key : Nat) (val : Test) : Cache :=
+  HashMap.insert cache key val
+
+def Cache.find? (cache : Cache) (key : Nat) : Option Test :=
+  HashMap.find? cache key
+
+-- This function just contains a call to a function that we definitely do not want to reduce.
+-- To illustrate that the problem is actually noticeable there are multiple implementations provided.
+-- Each of these implementations does additional modifications on the cache before looking things up,
+-- as one might expect in irl functions.
+-- Each version has a lot of additional complexity from the type checkers POV.
+def barImpl1 (cache : Cache) (key : Nat) : Test :=
+  match cache.find? key with
+  | some val => val
+  | none => ⟨0⟩
+
+def barImpl2 (cache : Cache) (key : Nat) : Test :=
+  match (cache.insert key ⟨0⟩).find? key with
+  | some val => val
+  | none => ⟨0⟩
+
+def barImpl3 (cache : Cache) (key : Nat) : Test :=
+  match ((cache.insert key ⟨0⟩).insert 0 ⟨0⟩).find? key with
+  | some val => val
+  | none => ⟨0⟩
+
+def barImpl4 (cache : Cache) (key : Nat) : Test :=
+  match (((cache.insert key ⟨0⟩).insert 0 ⟨0⟩).insert key ⟨key⟩).find? key with
+  | some val => val
+  | none => ⟨0⟩
+
+def bar := barImpl4
+
+set_option maxHeartbeats 400 in
+def test (c1 : Cache) (key : Nat) : Nat :=
+  go c1 key
+where
+  go (c1 : Cache) (key : Nat) : Nat :=
+    let val : Test := bar c1 key
+    have : val.x = (bar c1 key).x := rfl
+    val.x
+
+def ack : Nat → Nat → Nat
+  | 0,   y   => y+1
+  | x+1, 0   => ack x 1
+  | x+1, y+1 => ack x (ack (x+1) y)
+
+class Foo where
+  x : Nat
+  y : Nat
+
+instance f (x : Nat) : Foo :=
+  { x, y := ack 10 10 }
+
+instance g (x : Nat) : Foo :=
+  { x, y := ack 10 11 }
+
+open Lean Meta
+set_option maxHeartbeats 400 in
+run_meta do
+  withLocalDeclD `x (mkConst ``Nat) fun x => do
+    let lhs := Expr.proj ``Foo 0 <| mkApp (mkConst ``f) x
+    let rhs := Expr.proj ``Foo 0 <| mkApp (mkConst ``g) x
+    assert! (← isDefEq lhs rhs)
+
+run_meta do
+  withLocalDeclD `x (mkConst ``Nat) fun x => do
+    let lhs := Expr.proj ``Foo 0 <| mkApp (mkConst ``f) x
+    let rhs := Expr.proj ``Foo 0 <| mkApp (mkConst ``g) x
+    match Kernel.isDefEq (← getEnv) {} lhs rhs with
+    | .ok b => assert! b
+    | .error _ => throwError "failed"
+
+example : (f x).1 = (g x).1 :=
+  rfl