4 files changed, 33 insertions, 9 deletions
diff --git a/include/clang/AST/DeclBase.h b/include/clang/AST/DeclBase.h
index 497f86347a..0902b450a4 100644
--- a/include/clang/AST/DeclBase.h
+++ b/include/clang/AST/DeclBase.h
@@ -1017,13 +1017,8 @@ private:
 };
 
 inline bool Decl::isTemplateParameter() const {
-  return getKind() == TemplateTypeParm || getKind() == NonTypeTemplateParm;
-}
-
-inline bool Decl::isDefinedOutsideFunctionOrMethod() const {
-  if (getDeclContext())
-    return !getDeclContext()->getLookupContext()->isFunctionOrMethod();
-  return true;
+  return getKind() == TemplateTypeParm || getKind() == NonTypeTemplateParm ||
+         getKind() == TemplateTemplateParm;
 }
 
 } // end clang.
diff --git a/lib/AST/DeclBase.cpp b/lib/AST/DeclBase.cpp
index 3afb4e44f3..76ff83448a 100644
--- a/lib/AST/DeclBase.cpp
+++ b/lib/AST/DeclBase.cpp
@@ -102,6 +102,17 @@ bool Decl::isFunctionOrFunctionTemplate() const {
   return isa<FunctionDecl>(this) || isa<FunctionTemplateDecl>(this);
 }
 
+bool Decl::isDefinedOutsideFunctionOrMethod() const {
+  for (const DeclContext *DC = getDeclContext(); 
+       DC && !DC->isTranslationUnit(); 
+       DC = DC->getParent())
+    if (DC->isFunctionOrMethod())
+      return false;
+
+  return true;
+}
+
+
 //===----------------------------------------------------------------------===//
 // PrettyStackTraceDecl Implementation
 //===----------------------------------------------------------------------===//
diff --git a/lib/Sema/SemaTemplateInstantiateDecl.cpp b/lib/Sema/SemaTemplateInstantiateDecl.cpp
index e909c4f0b9..e6be5389cd 100644
--- a/lib/Sema/SemaTemplateInstantiateDecl.cpp
+++ b/lib/Sema/SemaTemplateInstantiateDecl.cpp
@@ -717,7 +717,10 @@ Decl *TemplateDeclInstantiator::VisitFunctionDecl(FunctionDecl *D,
       return Info->Function;
   }
 
-  Sema::LocalInstantiationScope Scope(SemaRef, TemplateParams != 0);
+  bool MergeWithParentScope = (TemplateParams != 0) ||
+    !(isa<Decl>(Owner) && 
+      cast<Decl>(Owner)->isDefinedOutsideFunctionOrMethod());
+  Sema::LocalInstantiationScope Scope(SemaRef, MergeWithParentScope);
 
   llvm::SmallVector<ParmVarDecl *, 4> Params;
   QualType T = SubstFunctionType(D, Params);
@@ -844,7 +847,10 @@ TemplateDeclInstantiator::VisitCXXMethodDecl(CXXMethodDecl *D,
       return Info->Function;
   }
 
-  Sema::LocalInstantiationScope Scope(SemaRef, TemplateParams != 0);
+  bool MergeWithParentScope = (TemplateParams != 0) ||
+    !(isa<Decl>(Owner) && 
+      cast<Decl>(Owner)->isDefinedOutsideFunctionOrMethod());
+  Sema::LocalInstantiationScope Scope(SemaRef, MergeWithParentScope);
 
   llvm::SmallVector<ParmVarDecl *, 4> Params;
   QualType T = SubstFunctionType(D, Params);
diff --git a/test/SemaTemplate/instantiate-local-class.cpp b/test/SemaTemplate/instantiate-local-class.cpp
new file mode 100644
index 0000000000..5cb63b49ee
--- /dev/null
+++ b/test/SemaTemplate/instantiate-local-class.cpp
@@ -0,0 +1,12 @@
+// RUN: %clang_cc1 -verify %s
+template<typename T>
+void f0() {
+  struct X;
+  typedef struct Y {
+    T (X::* f1())(int) { return 0; }
+  } Y2;
+
+  Y2 y = Y();
+}
+
+template void f0<int>();