diff --git a/bin/sh/tests/builtins/Makefile b/bin/sh/tests/builtins/Makefile
index 4d94d94c5d37..4811bb3221c6 100644
--- a/bin/sh/tests/builtins/Makefile
+++ b/bin/sh/tests/builtins/Makefile
@@ -113,6 +113,7 @@ FILES+=		local3.0
 FILES+=		local4.0
 FILES+=		local5.0
 FILES+=		local6.0
+FILES+=		local7.0
 .if ${MK_NLS} != "no"
 FILES+=		locale1.0
 .endif
diff --git a/bin/sh/tests/builtins/local7.0 b/bin/sh/tests/builtins/local7.0
new file mode 100644
index 000000000000..f7e6fc0aae97
--- /dev/null
+++ b/bin/sh/tests/builtins/local7.0
@@ -0,0 +1,10 @@
+# $FreeBSD$
+
+f() {
+	local x
+	readonly x=2
+}
+unset x
+f
+x=4
+[ "$x" = 4 ]
diff --git a/bin/sh/var.c b/bin/sh/var.c
index 3af7dbeca19a..03d529b86fbc 100644
--- a/bin/sh/var.c
+++ b/bin/sh/var.c
@@ -802,6 +802,7 @@ poplocalvars(void)
 			ckfree(lvp->text);
 			optschanged();
 		} else if ((lvp->flags & (VUNSET|VSTRFIXED)) == VUNSET) {
+			vp->flags &= ~VREADONLY;
 			(void)unsetvar(vp->text);
 		} else {
 			islocalevar = (vp->flags | lvp->flags) & VEXPORT &&