diff --git a/gcc/fortran/ChangeLog b/gcc/fortran/ChangeLog
index b87d81474f4..98d9bb328b9 100644
--- a/gcc/fortran/ChangeLog
+++ b/gcc/fortran/ChangeLog
@@ -1,3 +1,9 @@
+2005-05-11  Tobias Schl"uter  <tobias.schlueter@physik.uni-muenchen.de>
+
+	PR fortran/21260
+	* io.c (check_format): Look for literal characters inside
+	hollerith constant.
+
 2005-05-11  Tobias Schl"uter  <tobias.schlueter@physik.uni-muenchen.de>
 
 	* resolve.c (resolve_symbol): Copy 'pointer' and 'dimension'
diff --git a/gcc/fortran/io.c b/gcc/fortran/io.c
index 90eb855016d..8dab5f59afd 100644
--- a/gcc/fortran/io.c
+++ b/gcc/fortran/io.c
@@ -642,7 +642,7 @@ data_desc:
       {
         while(repeat >0)
          {
-          next_char(0);
+          next_char(1);
           repeat -- ;
          }
       }
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 6e3cae14cc9..ece62d2eacf 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2005-05-11  Tobias Schl"uter  <tobias.schlueter@physik.uni-muenchen.de>
+
+	PR fortran/21260
+	* gfortran.dg/hollerith_1.f90: New test.
+
 2005-05-11  Tobias Schl"uter  <tobias.schlueter@physik.uni-muenchen.de>
 
 	* gfortran.dg/func_result_2.f90: New test.
diff --git a/gcc/testsuite/gfortran.dg/hollerith_1.f90 b/gcc/testsuite/gfortran.dg/hollerith_1.f90
new file mode 100644
index 00000000000..d6732d40b69
--- /dev/null
+++ b/gcc/testsuite/gfortran.dg/hollerith_1.f90
@@ -0,0 +1,11 @@
+! { dg-do run }
+! PR 21260
+! We wrongly interpreted the '!' as the beginning of a comment.
+! Also verifies the functioning of hollerith formatting.
+      character*72 c
+      write(c,8000)
+8000  format(36(2H!)))
+      do i = 1,72,2
+         if (c(i:i+1) /= '!)') call abort
+      end do
+      end