diff --git a/Demos/Device/CDC/CDC.c b/Demos/Device/CDC/CDC.c
index 3dc624057d..29bc00373a 100644
--- a/Demos/Device/CDC/CDC.c
+++ b/Demos/Device/CDC/CDC.c
@@ -300,14 +300,22 @@ TASK(CDC_Task)
 		/* Write the String to the Endpoint */
 		Endpoint_Write_Stream_LE(ReportString, strlen(ReportString));
 		
+		/* Remember if the packet to send completely fills the endpoint */
+		bool IsFull = (Endpoint_BytesInEndpoint() == CDC_TXRX_EPSIZE);
+
 		/* Finalize the stream transfer to send the last packet */
 		Endpoint_ClearIN();
 
-		/* Wait until the endpoint is ready for another packet */
-		while (!(Endpoint_IsINReady()));
-		
-		/* Send an empty packet to ensure that the host does not buffer data sent to it */
-		Endpoint_ClearIN();
+		/* If the last packet filled the endpoint, send an empty packet to release the buffer on 
+		 * the receiver (otherwise all data will be cached until a non-full packet is received) */
+		if (IsFull)
+		{
+			/* Wait until the endpoint is ready for another packet */
+			while (!(Endpoint_IsINReady()));
+			
+			/* Send an empty packet to ensure that the host does not buffer data sent to it */
+			Endpoint_ClearIN();
+		}
 	}
 
 	/* Select the Serial Rx Endpoint */
diff --git a/Demos/Device/USBtoSerial/USBtoSerial.c b/Demos/Device/USBtoSerial/USBtoSerial.c
index 87d531c4d4..1d238aa117 100644
--- a/Demos/Device/USBtoSerial/USBtoSerial.c
+++ b/Demos/Device/USBtoSerial/USBtoSerial.c
@@ -246,18 +246,19 @@ TASK(CDC_Task)
 		
 		if (Endpoint_IsOUTReceived())
 		{
-			/* Read the received data endpoint into the transmission buffer */
-			while (Endpoint_BytesInEndpoint())
+			/* Read the bytes in from the endpoint into the buffer while space is available */
+			while (Endpoint_BytesInEndpoint() && (BUFF_STATICSIZE - Rx_Buffer.Elements))
 			{
-				/* Wait until the buffer has space for a new character */
-				while (!((BUFF_STATICSIZE - Rx_Buffer.Elements)));
-			
 				/* Store each character from the endpoint */
 				Buffer_StoreElement(&Rx_Buffer, Endpoint_Read_Byte());
 			}
 			
-			/* Clear the endpoint buffer */
-			Endpoint_ClearOUT();
+			/* Check to see if all bytes in the current packet have been read */
+			if (!(Endpoint_BytesInEndpoint()))
+			{
+				/* Clear the endpoint buffer */
+				Endpoint_ClearOUT();
+			}
 		}
 		
 		/* Check if Rx buffer contains data */
@@ -280,18 +281,29 @@ TASK(CDC_Task)
 			/* Wait until Serial Tx Endpoint Ready for Read/Write */
 			while (!(Endpoint_IsReadWriteAllowed()));
 			
-			/* Write the transmission buffer contents to the received data endpoint */
+			/* Write the bytes from the buffer to the endpoint while space is available */
 			while (Tx_Buffer.Elements && (Endpoint_BytesInEndpoint() < CDC_TXRX_EPSIZE))
-			  Endpoint_Write_Byte(Buffer_GetElement(&Tx_Buffer));
+			{
+				/* Write each byte retreived from the buffer to the endpoint */
+				Endpoint_Write_Byte(Buffer_GetElement(&Tx_Buffer));
+			}
+			
+			/* Remember if the packet to send completely fills the endpoint */
+			bool IsFull = (Endpoint_BytesInEndpoint() == CDC_TXRX_EPSIZE);
 			
 			/* Send the data */
 			Endpoint_ClearIN();
 
-			/* Wait until Serial Tx Endpoint Ready for Read/Write */
-			while (!(Endpoint_IsReadWriteAllowed()));
+			/* If no more data to send and the last packet filled the endpoint, send an empty packet to release
+			 * the buffer on the receiver (otherwise all data will be cached until a non-full packet is received) */
+			if (IsFull && !(Tx_Buffer.Elements))
+			{
+				/* Wait until Serial Tx Endpoint Ready for Read/Write */
+				while (!(Endpoint_IsReadWriteAllowed()));
 
-			/* Send an empty packet to terminate the transfer */
-			Endpoint_ClearIN();
+				/* Send an empty packet to terminate the transfer */
+				Endpoint_ClearIN();
+			}
 		}
 	}
 }
diff --git a/LUFA/ChangeLog.txt b/LUFA/ChangeLog.txt
index 115a04a120..e504c39a68 100644
--- a/LUFA/ChangeLog.txt
+++ b/LUFA/ChangeLog.txt
@@ -48,6 +48,7 @@
   *  - Removed old endpoint and pipe aliased read/write/discard routines which did not have an explicit endian specifier for clarity
   *  - Removed the ButtLoadTag.h header file, as no one used for its intended purpose anyway
   *  - Renamed the main Drivers/AT90USBXXX directory to Drivers/Peripheral, renamed the Serial_Stream driver to SerialStream
+  *  - Fixed CDC and USBtoSerial demos freezing where buffers were full while still transmitting or receiving (thanks to Peter Hand)
   *    
   *
   *  \section Sec_ChangeLog090401 Version 090401