diff --git a/ChangeLog b/ChangeLog
index 0ae0700f..fc69777e 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,8 @@
+2010-08-10  Paul Smith  <psmith@gnu.org>
+
+	* main.c (main): Expand MAKEFLAGS before adding it to the
+	environment when re-exec'ing.  Fixes Savannah bug #30723.
+
 2010-08-07  Eli Zaretskii  <eliz@gnu.org>
 
 	* w32/subproc/build.bat: Make all 3 cl.exe compile command lines
diff --git a/main.c b/main.c
index c6989e31..9fe80909 100644
--- a/main.c
+++ b/main.c
@@ -2093,7 +2093,7 @@ main (int argc, char **argv, char **envp)
             const char *pv = define_makeflags (1, 1);
             char *p = alloca (sizeof ("MAKEFLAGS=") + strlen (pv) + 1);
             sprintf (p, "MAKEFLAGS=%s", pv);
-            putenv (p);
+            putenv (allocated_variable_expand (p));
           }
 
 	  if (ISDB (DB_BASIC))
diff --git a/tests/ChangeLog b/tests/ChangeLog
index d036568e..650d8d44 100644
--- a/tests/ChangeLog
+++ b/tests/ChangeLog
@@ -1,3 +1,8 @@
+2010-08-10  Paul Smith  <psmith@gnu.org>
+
+	* scripts/features/reinvoke: Ensure command line variable settings
+	are preserved across make re-exec.  Tests Savannah bug #30723.
+
 2010-07-28  Paul Smith  <psmith@gnu.org>
 
 	* scripts/targets/POSIX: Compatibility issues with Solaris (and
diff --git a/tests/scripts/features/reinvoke b/tests/scripts/features/reinvoke
index 9952ced1..eb1a3492 100644
--- a/tests/scripts/features/reinvoke
+++ b/tests/scripts/features/reinvoke
@@ -57,9 +57,24 @@ include $(F)',
 # Now try with the file we're not updating being the actual file we're
 # including: this and the previous one test different parts of the code.
 
-run_make_test(undef, "F=b", "[ -f b ] || echo >> b\nhello\n")
+run_make_test(undef, 'F=b', "[ -f b ] || echo >> b\nhello\n")
 
 &rmfiles('a','b','c');
 
+# Ensure command line variables are preserved properly across re-exec
+# Tests for Savannah bug #30723
+
+run_make_test('
+ifdef RECURSE
+-include foo30723
+endif
+recurse: ; @$(MAKE) -f $(MAKEFILE_LIST) RECURSE=1 test
+test: ; @echo F.O=$(F.O)
+foo30723: ; @touch $@
+',
+              '--no-print-directory F.O=bar', "F.O=bar\n");
+
+unlink('foo30723');
+
 # This tells the test driver that the perl test script executed properly.
 1;