diff --git a/CHANGELOG.md b/CHANGELOG.md
index c231bbbaa..0627562ef 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,11 @@ and this project adheres to [Semantic Versioning](http://semver.org/).
 
 ## [Unreleased]
 
+## [Version 0.58.2]
+
+### Fixed
+- [#854](https://github.com/FuelLabs/fuel-vm/pull/854): Fixed a bug where LDC mode 2 padding bytes would be copied from memory instead of using zeroes.
+
 ## [Version 0.58.1]
 
 ### Fixed
diff --git a/fuel-vm/src/interpreter/blockchain.rs b/fuel-vm/src/interpreter/blockchain.rs
index 073ed314d..ef0f73c80 100644
--- a/fuel-vm/src/interpreter/blockchain.rs
+++ b/fuel-vm/src/interpreter/blockchain.rs
@@ -809,6 +809,7 @@ where
         let current_contract = current_contract(self.context, self.fp, self.memory)?;
 
         let length = bytes::padded_len_word(length_unpadded).unwrap_or(Word::MAX);
+        let length_padding = length.saturating_sub(length_unpadded);
 
         // Fetch the storage blob
         let profiler = ProfileGas {
@@ -833,8 +834,15 @@ where
         let owner = OwnershipRegisters::only_allow_stack_write(new_sp, ssp, *self.hp);
         let src = input_src_addr.saturating_add(input_offset);
 
-        // Copy the code.
-        self.memory.memcopy(dst, src, length, owner)?;
+        // Copy the code
+        self.memory.memcopy(dst, src, length_unpadded, owner)?;
+
+        // Write padding
+        if length_padding > 0 {
+            self.memory
+                .write(owner, dst.saturating_add(length_unpadded), length_padding)?
+                .fill(0);
+        }
 
         // Mark stack space as allocated
         *self.sp = new_sp;
diff --git a/fuel-vm/src/tests/blockchain/ldc_mode_2.rs b/fuel-vm/src/tests/blockchain/ldc_mode_2.rs
index 631088203..c4dcab0c4 100644
--- a/fuel-vm/src/tests/blockchain/ldc_mode_2.rs
+++ b/fuel-vm/src/tests/blockchain/ldc_mode_2.rs
@@ -16,6 +16,11 @@ use crate::{
         MemoryStorage,
         Transactor,
     },
+    tests::test_helpers::{
+        assert_success,
+        run_script,
+        set_full_word,
+    },
 };
 use alloc::{
     vec,
@@ -34,6 +39,50 @@ use fuel_tx::{
     Receipt,
     TransactionBuilder,
 };
+use test_case::test_case;
+
+fn ldcv2_data_init() -> Vec<Instruction> {
+    vec![
+        // Write bytes 0..16 to end of the heap
+        op::move_(0x11, RegId::HP),
+        op::movi(0x10, 16),
+        op::aloc(0x10),
+        // loop:
+        op::sub(0x10, 0x10, 1),
+        op::sub(0x11, 0x11, 1),
+        op::sb(0x11, 0x10, 0),
+        op::jnzb(0x10, RegId::ZERO, 2), // jmp loop
+    ]
+}
+
+#[test_case(0, 0 => Vec::<u8>::new())]
+#[test_case(0, 1 => vec![0; 8])]
+#[test_case(0, 2 => vec![0, 1, 0, 0, 0, 0, 0, 0])]
+#[test_case(0, 16 => vec![0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15])]
+#[test_case(1, 15 => vec![1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 0])]
+#[test_case(4, 12 => vec![4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 0, 0, 0, 0])]
+#[test_case(7, 9 => vec![7, 8, 9, 10, 11, 12, 13, 14, 15, 0, 0, 0, 0, 0, 0, 0])]
+#[test_case(8, 8 => vec![8, 9, 10, 11, 12, 13, 14, 15])]
+#[test_case(9, 7 => vec![9, 10, 11, 12, 13, 14, 15, 0])]
+fn ldcv2__has_correct_padding(offset: u32, len: u32) -> Vec<u8> {
+    let mut script = ldcv2_data_init();
+    let padded_len = len.next_multiple_of(8) as u64;
+    script.extend(set_full_word(0x14, padded_len));
+    script.extend([
+        op::movi(0x11, offset),
+        op::movi(0x12, len),
+        op::move_(0x13, RegId::SSP),
+        op::ldc(RegId::HP, 0x11, 0x12, 2),
+        op::logd(RegId::SSP, RegId::ZERO, 0x13, 0x14),
+        op::ret(0x1),
+    ]);
+    let receipts = run_script(script);
+    assert_success(&receipts);
+    let Some(Receipt::LogData { data, .. }) = receipts.first() else {
+        panic!("Expected LogData receipt");
+    };
+    data.clone().unwrap()
+}
 
 fn ldcv2_reason_helper(script: Vec<Instruction>) -> Result<(), PanicReason> {
     let gas_price = 0;