diff --git a/bin/sh/eval.c b/bin/sh/eval.c
index 655bf81306f9..b8f76d57f3d8 100644
--- a/bin/sh/eval.c
+++ b/bin/sh/eval.c
@@ -324,7 +324,7 @@ skipping:	  if (evalskip == SKIPCONT && --skipcount <= 0) {
 			}
 			if (evalskip == SKIPBREAK && --skipcount <= 0)
 				evalskip = 0;
-			if (evalskip == SKIPFUNC || evalskip == SKIPFILE)
+			if (evalskip == SKIPRETURN)
 				status = exitstatus;
 			break;
 		}
@@ -1068,7 +1068,7 @@ evalcommand(union node *cmd, int flags, struct backcmd *backcmd)
 		funcnest--;
 		popredir();
 		INTON;
-		if (evalskip == SKIPFUNC) {
+		if (evalskip == SKIPRETURN) {
 			evalskip = 0;
 			skipcount = 0;
 		}
@@ -1305,14 +1305,8 @@ returncmd(int argc, char **argv)
 {
 	int ret = argc > 1 ? number(argv[1]) : oexitstatus;
 
-	if (funcnest) {
-		evalskip = SKIPFUNC;
-		skipcount = 1;
-	} else {
-		/* skip the rest of the file */
-		evalskip = SKIPFILE;
-		skipcount = 1;
-	}
+	evalskip = SKIPRETURN;
+	skipcount = 1;
 	return ret;
 }
 
diff --git a/bin/sh/eval.h b/bin/sh/eval.h
index a6e87b237cb9..4129757e9f01 100644
--- a/bin/sh/eval.h
+++ b/bin/sh/eval.h
@@ -67,5 +67,4 @@ extern int skipcount;
 /* reasons for skipping commands (see comment on breakcmd routine) */
 #define SKIPBREAK	1
 #define SKIPCONT	2
-#define SKIPFUNC	3
-#define SKIPFILE	4
+#define SKIPRETURN	3
diff --git a/bin/sh/main.c b/bin/sh/main.c
index 295f27708bd5..e4974ea7f455 100644
--- a/bin/sh/main.c
+++ b/bin/sh/main.c
@@ -231,7 +231,7 @@ cmdloop(int top)
 		popstackmark(&smark);
 		setstackmark(&smark);
 		if (evalskip != 0) {
-			if (evalskip == SKIPFILE)
+			if (evalskip == SKIPRETURN)
 				evalskip = 0;
 			break;
 		}
diff --git a/bin/sh/sh.1 b/bin/sh/sh.1
index 174788ddc7cb..ea1d899ed8e1 100644
--- a/bin/sh/sh.1
+++ b/bin/sh/sh.1
@@ -1145,8 +1145,10 @@ command is
 .Pp
 .D1 Ic return Op Ar exitstatus
 .Pp
-It terminates the current executional scope, returning from the previous
-nested function, sourced script, or shell instance, in that order.
+It terminates the current executional scope, returning from the closest
+nested function or sourced script;
+if no function or sourced script is being executed,
+it exits the shell instance.
 The
 .Ic return
 command is implemented as a special built-in command.
diff --git a/tools/regression/bin/sh/builtins/return8.0 b/tools/regression/bin/sh/builtins/return8.0
new file mode 100644
index 000000000000..f00e859a74ce
--- /dev/null
+++ b/tools/regression/bin/sh/builtins/return8.0
@@ -0,0 +1,13 @@
+# $FreeBSD$
+
+if [ "$1" = nested ]; then
+	return 17
+fi
+
+f() {
+	set -- nested
+	. "$0"
+	return $(($? ^ 1))
+}
+f
+exit $(($? ^ 16))