diff --git a/gcc/gimple-fold.cc b/gcc/gimple-fold.cc
index 6c11654a2c6..b90ad8f0900 100644
--- a/gcc/gimple-fold.cc
+++ b/gcc/gimple-fold.cc
@@ -7572,7 +7572,7 @@ decode_field_reference (tree *pexp, HOST_WIDE_INT *pbitsize,
 	/* Not much we can do when xor appears in the right-hand compare
 	   operand.  */
 	return NULL_TREE;
-      else
+      else if (integer_zerop (*xor_cmp_op))
 	{
 	  *xor_p = true;
 	  exp = res_ops[0];
diff --git a/gcc/testsuite/gcc.dg/pr118081.c b/gcc/testsuite/gcc.dg/pr118081.c
new file mode 100644
index 00000000000..7659df7e785
--- /dev/null
+++ b/gcc/testsuite/gcc.dg/pr118081.c
@@ -0,0 +1,28 @@
+/* PR tree-optimization/118081 */
+/* { dg-do run } */
+/* { dg-options "-O2 -fno-tree-vrp -fno-expensive-optimizations" } */
+
+int a, b;
+
+int
+foo (int f)
+{
+  return f ? f || 0 : f;
+}
+
+void
+bar (void)
+{
+  b = a ? a : 1;
+  int i = foo (1 ^ b);
+  signed char h = i - 8;
+  if (h)
+    return;
+  __builtin_abort ();
+}
+
+int
+main ()
+{
+  bar ();
+}