diff --git a/gcc/ChangeLog b/gcc/ChangeLog
index 5e8a97068737..525895866728 100644
--- a/gcc/ChangeLog
+++ b/gcc/ChangeLog
@@ -1,3 +1,8 @@
+2008-06-26  Joseph Myers  <joseph@codesourcery.com>
+
+	* c-decl.c (merge_decls): Use !current_function_decl to check for
+	extern declaration of C99 inline function being at file scope.
+
 2008-06-25  John David Anglin  <dave.anglin@gcc-cnrc.gc.ca>
 
 	* config.gcc (hppa[12]*-*-hpux10*): Don't use fixproto.
diff --git a/gcc/c-decl.c b/gcc/c-decl.c
index 38c1581b3ff1..18ad11901f97 100644
--- a/gcc/c-decl.c
+++ b/gcc/c-decl.c
@@ -1764,8 +1764,7 @@ merge_decls (tree newdecl, tree olddecl, tree newtype, tree oldtype)
 	  || !DECL_EXTERNAL (olddecl))
       && DECL_EXTERNAL (newdecl)
       && !lookup_attribute ("gnu_inline", DECL_ATTRIBUTES (newdecl))
-      && (DECL_CONTEXT (newdecl) == NULL_TREE
-	  || TREE_CODE (DECL_CONTEXT (newdecl)) != FUNCTION_DECL))
+      && !current_function_decl)
     DECL_EXTERNAL (newdecl) = 0;
 
   if (DECL_EXTERNAL (newdecl))
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index d2df6992b1b5..01a008f3c186 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,7 @@
+2008-06-26  Joseph Myers  <joseph@codesourcery.com>
+
+	* gcc.dg/inline-32.c, gcc.dg/inline-32a.c: New tests.
+
 2008-06-26  Ira Rosen  <irar@il.ibm.com>
 
 	* testsuite/lib/target-supports.exp
diff --git a/gcc/testsuite/gcc.dg/inline-32.c b/gcc/testsuite/gcc.dg/inline-32.c
new file mode 100644
index 000000000000..bfcafd5dbba0
--- /dev/null
+++ b/gcc/testsuite/gcc.dg/inline-32.c
@@ -0,0 +1,11 @@
+/* { dg-do link } */
+/* { dg-options "-std=c99 -pedantic-errors" } */
+/* { dg-additional-sources inline-32a.c } */
+inline int f (void) { return 0; }
+
+int
+main (void)
+{
+  extern int f();
+  return f ();
+}
diff --git a/gcc/testsuite/gcc.dg/inline-32a.c b/gcc/testsuite/gcc.dg/inline-32a.c
new file mode 100644
index 000000000000..a2bde0aac4b2
--- /dev/null
+++ b/gcc/testsuite/gcc.dg/inline-32a.c
@@ -0,0 +1,3 @@
+/* { dg-do compile } */
+/* { dg-options "-std=c99 -pedantic-errors" } */
+int f (void) { return 0; }