diff --git a/asv_bench/benchmarks/interp.py b/asv_bench/benchmarks/interp.py
index 4b6691bcc0a..ca1d0a2dd89 100644
--- a/asv_bench/benchmarks/interp.py
+++ b/asv_bench/benchmarks/interp.py
@@ -25,23 +25,37 @@ def setup(self, *args, **kwargs):
                 "var1": (("x", "y"), randn_xy),
                 "var2": (("x", "t"), randn_xt),
                 "var3": (("t",), randn_t),
+                "var4": (("z",), np.array(["text"])),
+                "var5": (("k",), np.array(["a", "b", "c"])),
             },
             coords={
                 "x": np.arange(nx),
                 "y": np.linspace(0, 1, ny),
                 "t": pd.date_range("1970-01-01", periods=nt, freq="D"),
                 "x_coords": ("x", np.linspace(1.1, 2.1, nx)),
+                "z": np.array([1]),
+                "k": np.linspace(0, nx, 3),
             },
         )
 
     @parameterized(["method", "is_short"], (["linear", "cubic"], [True, False]))
-    def time_interpolation(self, method, is_short):
+    def time_interpolation_numeric_1d(self, method, is_short):
         new_x = new_x_short if is_short else new_x_long
-        self.ds.interp(x=new_x, method=method).load()
+        self.ds.interp(x=new_x, method=method).compute()
 
     @parameterized(["method"], (["linear", "nearest"]))
-    def time_interpolation_2d(self, method):
-        self.ds.interp(x=new_x_long, y=new_y_long, method=method).load()
+    def time_interpolation_numeric_2d(self, method):
+        self.ds.interp(x=new_x_long, y=new_y_long, method=method).compute()
+
+    @parameterized(["is_short"], ([True, False]))
+    def time_interpolation_string_scalar(self, is_short):
+        new_z = new_x_short if is_short else new_x_long
+        self.ds.interp(z=new_z).compute()
+
+    @parameterized(["is_short"], ([True, False]))
+    def time_interpolation_string_1d(self, is_short):
+        new_k = new_x_short if is_short else new_x_long
+        self.ds.interp(k=new_k).compute()
 
 
 class InterpolationDask(Interpolation):
diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index 39c6a8924f4..bace038bb17 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -42,6 +42,11 @@ Internal Changes
 ~~~~~~~~~~~~~~~~
 
 
+Performance
+~~~~~~~~~~~
+- Speed up non-numeric scalars when calling :py:meth:`Dataset.interp`. (:issue:`10054`, :pull:`10554`)
+  By `Jimmy Westling <https://github.com/illviljan>`_.
+
 .. _whats-new.2025.07.1:
 
 v2025.07.1 (July 09, 2025)
diff --git a/xarray/core/dataset.py b/xarray/core/dataset.py
index 26db282c3df..f79df3da7c2 100644
--- a/xarray/core/dataset.py
+++ b/xarray/core/dataset.py
@@ -3851,13 +3851,22 @@ def _validate_interp_indexer(x, new_x):
                 var_indexers = {k: v for k, v in use_indexers.items() if k in var.dims}
                 variables[name] = missing.interp(var, var_indexers, method, **kwargs)
             elif dtype_kind in "ObU" and (use_indexers.keys() & var.dims):
-                # For types that we do not understand do stepwise
-                # interpolation to avoid modifying the elements.
-                # reindex the variable instead because it supports
-                # booleans and objects and retains the dtype but inside
-                # this loop there might be some duplicate code that slows it
-                # down, therefore collect these signals and run it later:
-                reindex_vars.append(name)
+                if all(var.sizes[d] == 1 for d in (use_indexers.keys() & var.dims)):
+                    # Broadcastable, can be handled quickly without reindex:
+                    to_broadcast = (var.squeeze(),) + tuple(
+                        dest for _, dest in use_indexers.values()
+                    )
+                    variables[name] = broadcast_variables(*to_broadcast)[0].copy(
+                        deep=True
+                    )
+                else:
+                    # For types that we do not understand do stepwise
+                    # interpolation to avoid modifying the elements.
+                    # reindex the variable instead because it supports
+                    # booleans and objects and retains the dtype but inside
+                    # this loop there might be some duplicate code that slows it
+                    # down, therefore collect these signals and run it later:
+                    reindex_vars.append(name)
             elif all(d not in indexers for d in var.dims):
                 # For anything else we can only keep variables if they
                 # are not dependent on any coords that are being
diff --git a/xarray/tests/test_interp.py b/xarray/tests/test_interp.py
index 7d5a9bf3db4..dd3906cfd59 100644
--- a/xarray/tests/test_interp.py
+++ b/xarray/tests/test_interp.py
@@ -1065,6 +1065,28 @@ def test_interp1d_complex_out_of_bounds() -> None:
     assert_identical(actual, expected)
 
 
+@requires_scipy
+def test_interp_non_numeric_scalar() -> None:
+    ds = xr.Dataset(
+        {
+            "non_numeric": ("time", np.array(["a"])),
+        },
+        coords={"time": (np.array([0]))},
+    )
+    actual = ds.interp(time=np.linspace(0, 3, 3))
+
+    expected = xr.Dataset(
+        {
+            "non_numeric": ("time", np.array(["a", "a", "a"])),
+        },
+        coords={"time": np.linspace(0, 3, 3)},
+    )
+    xr.testing.assert_identical(actual, expected)
+
+    # Make sure the array is a copy:
+    assert actual["non_numeric"].data.base is None
+
+
 @requires_scipy
 def test_interp_non_numeric_1d() -> None:
     ds = xr.Dataset(