diff --git a/bfd/ChangeLog b/bfd/ChangeLog
index dc7750a293..6fe12d577d 100644
--- a/bfd/ChangeLog
+++ b/bfd/ChangeLog
@@ -1,3 +1,8 @@
+2003-08-24  Jason Eckhardt  <jle@rice.edu>
+
+	* elf32-i860.c (elf32_i860_relocate_pc16): Subtract 4 and
+	shift by 2 before storing the relocated value.
+
 2003-08-23  Jason Eckhardt  <jle@rice.edu>
 
         * coff-i860.c (coff_i860_reloc_nyi): New function.
diff --git a/bfd/elf32-i860.c b/bfd/elf32-i860.c
index fd68dc6336..0e013ef3a7 100644
--- a/bfd/elf32-i860.c
+++ b/bfd/elf32-i860.c
@@ -712,7 +712,8 @@ elf32_i860_relocate_pc16 (bfd *input_bfd,
   /* Relocate.  */
   value += rello->r_addend;
 
-  /* Separate the fields and insert.  */
+  /* Adjust the value by 4, then separate the fields and insert.  */
+  value = (value - 4) >> howto->rightshift;
   value = (((value & 0xf800) << 5) | (value & 0x7ff)) & howto->dst_mask;
   insn = (insn & ~howto->dst_mask) | value;