diff --git a/usr.bin/grep/grep.c b/usr.bin/grep/grep.c
index 6306cbff5932..3f16d118f0d8 100644
--- a/usr.bin/grep/grep.c
+++ b/usr.bin/grep/grep.c
@@ -562,6 +562,7 @@ main(int argc, char *argv[])
 			break;
 		case 'z':
 			fileeol = '\0';
+			cflags &= ~REG_NEWLINE;
 			break;
 		case BIN_OPT:
 			if (strcasecmp("binary", optarg) == 0)
diff --git a/usr.bin/grep/tests/grep_freebsd_test.sh b/usr.bin/grep/tests/grep_freebsd_test.sh
index 0d068d5d1c65..f6881791357c 100755
--- a/usr.bin/grep/tests/grep_freebsd_test.sh
+++ b/usr.bin/grep/tests/grep_freebsd_test.sh
@@ -92,9 +92,22 @@ gnuext_body()
 
 }
 
+atf_test_case zflag
+zflag_body()
+{
+
+	# The -z flag should pick up 'foo' and 'bar' as on the same line with
+	# 'some kind of junk' in between; a bug was present that instead made
+	# it process this incorrectly.
+	printf "foo\nbar\0" > in
+
+	atf_check grep -qz "foo.*bar" in
+}
+
 atf_init_test_cases()
 {
 	atf_add_test_case grep_r_implied
 	atf_add_test_case rgrep
 	atf_add_test_case gnuext
+	atf_add_test_case zflag
 }