diff --git a/ld/testsuite/ChangeLog b/ld/testsuite/ChangeLog
index 8aa98f296e..4069b4b556 100644
--- a/ld/testsuite/ChangeLog
+++ b/ld/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2004-07-08  Maciej W. Rozycki  <macro@linux-mips.org>
+
+	* ld-mips-elf/reloc-merge-lo16.{s,d,ld}: New test.
+	* ld-mips-elf/mips-elf.exp: Run it.
+
 2004-07-02  Kaz Kojima  <kkojima@rr.iij4u.or.jp>
 
 	* ld-elf/frame.exp: Don't run on sh*-*-elf*.
diff --git a/ld/testsuite/ld-mips-elf/mips-elf.exp b/ld/testsuite/ld-mips-elf/mips-elf.exp
index 36fae9b642..f0c2b84aa0 100644
--- a/ld/testsuite/ld-mips-elf/mips-elf.exp
+++ b/ld/testsuite/ld-mips-elf/mips-elf.exp
@@ -74,3 +74,4 @@ if $has_newabi {
     }
 }
 run_dump_test "reloc-2"
+run_dump_test "reloc-merge-lo16"
diff --git a/ld/testsuite/ld-mips-elf/reloc-merge-lo16.d b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.d
new file mode 100644
index 0000000000..f6e7ef8230
--- /dev/null
+++ b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.d
@@ -0,0 +1,16 @@
+#name: MIPS ELF lo16 merge
+#source: reloc-merge-lo16.s
+#ld: -Treloc-merge-lo16.ld
+#objdump: -td --prefix-addresses --show-raw-insn
+
+# Test lo16 reloc calculation with string merging.
+
+.*: +file format .*mips.*
+#...
+0+80fe70 l       .rodata	0+000000 g
+0+400000 g     F .text	0+000000 __start
+#...
+0+400000 <[^>]*> 3c020081 	lui	v0,0x81
+0+400004 <[^>]*> 2443fe70 	addiu	v1,v0,-400
+0+400008 <[^>]*> 2442fe70 	addiu	v0,v0,-400
+	\.\.\.
diff --git a/ld/testsuite/ld-mips-elf/reloc-merge-lo16.ld b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.ld
new file mode 100644
index 0000000000..4d487dd5fd
--- /dev/null
+++ b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.ld
@@ -0,0 +1,9 @@
+ENTRY(__start)
+SECTIONS
+{
+  . = 0x0400000;
+  .text : { *(.text) }
+  . = 0x0800000;
+  .rodata : { *(.rodata.*) }
+  /DISCARD/ : { *(*) }
+}
diff --git a/ld/testsuite/ld-mips-elf/reloc-merge-lo16.s b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.s
new file mode 100644
index 0000000000..33158b12b7
--- /dev/null
+++ b/ld/testsuite/ld-mips-elf/reloc-merge-lo16.s
@@ -0,0 +1,28 @@
+	.section .rodata.str1.4,"aMS", @progbits, 1
+	.macro	fillstr char
+	.rept	0x3fff - \char
+	.byte	\char
+	.endr
+	.byte	0
+	.endm
+	fillstr	'a'
+	fillstr	'h'
+	fillstr	'c'
+	fillstr	'd'
+	fillstr	'g'
+	fillstr	'f'
+g:
+	fillstr	'g'
+	fillstr	'h'
+
+	.text
+	.globl	__start
+	.ent	__start
+	.type	__start, @function
+__start:
+	lui	$2, %hi(g)
+	addiu	$3, $2, %lo(g)
+	addiu	$2, $2, %lo(g)
+	.end	__start
+
+	.space	16