diff --git a/vllm/outputs.py b/vllm/outputs.py
index 63df7dcf519b5..25b2265285d16 100644
--- a/vllm/outputs.py
+++ b/vllm/outputs.py
@@ -1,6 +1,6 @@
 import time
 from dataclasses import dataclass
-from typing import Dict, Generic, List, Optional
+from typing import Dict, Generic, List, MutableSequence, Optional
 from typing import Sequence as GenericSequence
 from typing import Union
 
@@ -162,6 +162,26 @@ def new(
             finished=finished,
         )
 
+    def add(self, next_output: "RequestOutput") -> None:
+        """Merge subsequent RequestOutput into this one"""
+
+        self.prompt = next_output.prompt
+        self.prompt_token_ids = next_output.prompt_token_ids
+        self.prompt_logprobs = next_output.prompt_logprobs
+        self.finished |= next_output.finished
+
+        #TODO assuming n == 1 for now
+        completion = self.outputs[0]
+        next_completion = next_output.outputs[0]
+        completion.text += next_completion.text
+        if not isinstance(completion.token_ids, MutableSequence):
+            completion.token_ids = list(completion.token_ids)
+        completion.token_ids.extend(next_completion.token_ids)
+        if next_completion.logprobs:
+            assert completion.logprobs is not None
+            completion.logprobs.extend(next_completion.logprobs)
+        completion.cumulative_logprob = next_completion.cumulative_logprob
+
     @classmethod
     def from_seq_group(
         cls, seq_group: SequenceGroup, use_cache: bool,
diff --git a/vllm/v1/engine/async_llm.py b/vllm/v1/engine/async_llm.py
index a74699f7513e6..7a80114f49c29 100644
--- a/vllm/v1/engine/async_llm.py
+++ b/vllm/v1/engine/async_llm.py
@@ -12,7 +12,7 @@
 from vllm.outputs import RequestOutput
 from vllm.pooling_params import PoolingParams
 from vllm.prompt_adapter.request import PromptAdapterRequest
-from vllm.sampling_params import SamplingParams
+from vllm.sampling_params import RequestOutputKind, SamplingParams
 from vllm.transformers_utils.tokenizer import AnyTokenizer
 from vllm.transformers_utils.tokenizer_group import init_tokenizer_from_configs
 from vllm.usage.usage_lib import UsageContext
@@ -205,17 +205,22 @@ async def generate(
 
             # The output_handler task pushes items into the queue.
             # This task pulls from the queue and yields to caller.
-            while True:
+            finished = False
+            while not finished:
                 # Note: drain queue without await if possible (avoids
                 # task switching under load which helps performance).
-                out = q.get_nowait() if q.qsize() > 0 else await q.get()
+                out = q.get_nowait() if not q.empty() else await q.get()
+
+                # Coalesce any additional queued outputs
+                while not q.empty():
+                    if sampling_params.output_kind == RequestOutputKind.DELTA:
+                        out.add(q.get_nowait())
+                    else:
+                        out = q.get_nowait()
 
                 # Note: both OutputProcessor and EngineCore handle their
                 # own request cleanup based on finished.
-                if out.finished:
-                    yield out
-                    break
-
+                finished = out.finished
                 yield out
 
         # If the request is disconnected by the client, the