diff --git a/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.cpp b/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.cpp
index 194ddca390c..3ebc977bc41 100644
--- a/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.cpp
+++ b/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.cpp
@@ -13,10 +13,6 @@ using namespace InferenceEngine;
 
 bool MKLDNNReorgYoloNode::isSupportedOperation(const std::shared_ptr<const ngraph::Node>& op, std::string& errorMessage) noexcept {
     try {
-        if (isDynamicNgraphNode(op)) {
-            errorMessage = "Doesn't support op with dynamic shapes";
-            return false;
-        }
         const auto reorgYolo = std::dynamic_pointer_cast<const ngraph::opset2::ReorgYolo>(op);
         if (!reorgYolo) {
             errorMessage = "Only opset2 ReorgYolo operation is supported";
diff --git a/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.h b/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.h
index d22147c48e0..c3be7362484 100644
--- a/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.h
+++ b/inference-engine/src/mkldnn_plugin/nodes/mkldnn_reorg_yolo_node.h
@@ -18,6 +18,10 @@ public:
     void createPrimitive() override {};
     void execute(mkldnn::stream strm) override;
     bool created() const override;
+    bool needPrepareParams() const override { return false; }
+    void executeDynamicImpl(mkldnn::stream strm) override {
+        execute(strm);
+    }
 
     static bool isSupportedOperation(const std::shared_ptr<const ngraph::Node>& op, std::string& errorMessage) noexcept;
 
diff --git a/inference-engine/tests/functional/plugin/cpu/single_layer_tests/reorg_yolo.cpp b/inference-engine/tests/functional/plugin/cpu/single_layer_tests/reorg_yolo.cpp
new file mode 100644
index 00000000000..f728d590038
--- /dev/null
+++ b/inference-engine/tests/functional/plugin/cpu/single_layer_tests/reorg_yolo.cpp
@@ -0,0 +1,90 @@
+// Copyright (C) 2021 Intel Corporation
+// SPDX-License-Identifier: Apache-2.0
+//
+
+#include "functional_test_utils/ov_tensor_utils.hpp"
+#include "ngraph_functions/builders.hpp"
+#include "shared_test_classes/base/ov_subgraph.hpp"
+#include "test_utils/cpu_test_utils.hpp"
+
+using namespace InferenceEngine;
+using namespace CPUTestUtils;
+using namespace ngraph::opset3;
+using namespace ov::test;
+
+namespace CPULayerTestsDefinitions {
+
+using ReorgYoloCPUParamsTuple = typename std::tuple<InputShape,     // Input Shape
+                                                    size_t,         // stride
+                                                    ElementType,    // Network precision
+                                                    TargetDevice>;  // Device
+
+class ReorgYoloLayerCPUTest : public testing::WithParamInterface<ReorgYoloCPUParamsTuple>,
+                              virtual public ov::test::SubgraphBaseTest {
+public:
+    static std::string getTestCaseName(const testing::TestParamInfo<ReorgYoloCPUParamsTuple>& obj) {
+        InputShape inputShape;
+        size_t stride;
+        ElementType netPrecision;
+        TargetDevice targetDev;
+        std::tie(inputShape, stride, netPrecision, targetDev) = obj.param;
+        std::ostringstream result;
+        result << "IS=" << CommonTestUtils::partialShape2str({inputShape.first}) << "_";
+        for (const auto& item : inputShape.second) {
+            result << CommonTestUtils::vec2str(item) << "_";
+        }
+        result << "stride=" << stride << "_";
+        result << "netPRC=" << netPrecision << "_";
+        result << "targetDevice=" << targetDev << "_";
+        return result.str();
+    }
+
+protected:
+    void SetUp() override {
+        InputShape inputShape;
+        size_t stride;
+        ElementType netPrecision;
+        std::tie(inputShape, stride, netPrecision, targetDevice) = this->GetParam();
+
+        init_input_shapes({inputShape});
+
+        auto param = std::make_shared<ngraph::op::Parameter>(ngraph::element::f32, inputDynamicShapes[0]);
+        auto reorg_yolo = std::make_shared<ngraph::op::v0::ReorgYolo>(param, stride);
+        function = std::make_shared<ngraph::Function>(std::make_shared<ngraph::opset1::Result>(reorg_yolo),
+                                                      ngraph::ParameterVector{param},
+                                                      "ReorgYolo");
+    }
+};
+
+TEST_P(ReorgYoloLayerCPUTest, CompareWithRefs) {
+    run();
+};
+
+const std::vector<ov::test::InputShape> inShapesDynamic = {
+    {{{1, 2}, -1, -1, -1}, {{1, 4, 4, 4}, {1, 8, 4, 4}, {2, 8, 4, 4}}}};
+
+const std::vector<size_t> strides = {2, 3};
+
+const std::vector<ov::test::InputShape> inShapesDynamic2 = {{{{1, 2}, -1, -1, -1}, {{1, 9, 3, 3}}}};
+
+const auto testCase_stride2_Dynamic = ::testing::Combine(::testing::ValuesIn(inShapesDynamic),
+                                                         ::testing::Values(strides[0]),
+                                                         ::testing::Values(ov::element::f32),
+                                                         ::testing::Values(CommonTestUtils::DEVICE_CPU));
+
+const auto testCase_stride3_Dynamic = ::testing::Combine(::testing::ValuesIn(inShapesDynamic2),
+                                                         ::testing::Values(strides[1]),
+                                                         ::testing::Values(ov::element::f32),
+                                                         ::testing::Values(CommonTestUtils::DEVICE_CPU));
+
+INSTANTIATE_TEST_SUITE_P(smoke_TestsReorgYolo_stride2_DynamicShape,
+                         ReorgYoloLayerCPUTest,
+                         testCase_stride2_Dynamic,
+                         ReorgYoloLayerCPUTest::getTestCaseName);
+
+INSTANTIATE_TEST_SUITE_P(smoke_TestsReorgYolo_stride3_DynamicShape,
+                         ReorgYoloLayerCPUTest,
+                         testCase_stride3_Dynamic,
+                         ReorgYoloLayerCPUTest::getTestCaseName);
+
+};  // namespace CPULayerTestsDefinitions
diff --git a/src/core/src/op/reorg_yolo.cpp b/src/core/src/op/reorg_yolo.cpp
index 68788d72ded..56739f3820f 100644
--- a/src/core/src/op/reorg_yolo.cpp
+++ b/src/core/src/op/reorg_yolo.cpp
@@ -50,7 +50,8 @@ void op::ReorgYolo::validate_and_infer_types() {
         }
         set_output_type(0, input_et, output_shape);
     } else {
-        set_output_type(0, input_et, ov::PartialShape::dynamic());
+        auto input_shape = get_input_partial_shape(0);
+        set_output_type(0, input_et, ov::PartialShape::dynamic(input_shape.rank()));
     }
 }