diff --git a/gcc/ChangeLog b/gcc/ChangeLog
index cb7a67b6513..c83a2faa81c 100644
--- a/gcc/ChangeLog
+++ b/gcc/ChangeLog
@@ -1,3 +1,9 @@
+2008-07-31  Richard Guenther  <rguenther@suse.de>
+
+	PR tree-optimization/36978
+	* tree-ssa-loop-unswitch.c (tree_may_unswitch_on): Do not fold
+	the generated condition.
+
 2008-07-31  Richard Guenther  <rguenther@suse.de>
 
 	* passes.c (init_optimization_passes): Always call
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index ccbd9711809..f6e855abd08 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2008-07-31  Richard Guenther  <rguenther@suse.de>
+
+	PR tree-optimization/36978
+	* gcc.dg/torture/pr36978.c: New testcase.
+
 2008-07-31  Arnaud Charlet  <charlet@adacore.com>
 
 	* gnat.dg/sync_iface_test.ad[s,b]: New test.
diff --git a/gcc/testsuite/gcc.dg/torture/pr36978.c b/gcc/testsuite/gcc.dg/torture/pr36978.c
new file mode 100644
index 00000000000..cd1af4ebc08
--- /dev/null
+++ b/gcc/testsuite/gcc.dg/torture/pr36978.c
@@ -0,0 +1,14 @@
+/* { dg-do compile } */
+/* { dg-options "-funswitch-loops" } */
+
+unsigned short status;
+void foo (const _Bool flag)
+{
+  if (status == 2 || status == 7)
+    {
+      while (status != 2 && (status != 7 || !flag))
+	{
+	}
+    }
+}
+
diff --git a/gcc/tree-ssa-loop-unswitch.c b/gcc/tree-ssa-loop-unswitch.c
index 8ece4aca4ab..850270f49c0 100644
--- a/gcc/tree-ssa-loop-unswitch.c
+++ b/gcc/tree-ssa-loop-unswitch.c
@@ -123,8 +123,8 @@ tree_may_unswitch_on (basic_block bb, struct loop *loop)
 	return NULL_TREE;
     }
 
-  cond = fold_build2 (gimple_cond_code (stmt), boolean_type_node,
-		      gimple_cond_lhs (stmt), gimple_cond_rhs (stmt));
+  cond = build2 (gimple_cond_code (stmt), boolean_type_node,
+		 gimple_cond_lhs (stmt), gimple_cond_rhs (stmt));
 
   /* To keep the things simple, we do not directly remove the conditions,
      but just replace tests with 0/1.  Prevent the infinite loop where we