diff --git a/gcc/cp/ChangeLog b/gcc/cp/ChangeLog
index 4f460a37e86..5035ded8afa 100644
--- a/gcc/cp/ChangeLog
+++ b/gcc/cp/ChangeLog
@@ -1,5 +1,8 @@
 2006-05-06  Volker Reichelt  <reichelt@igpm.rwth-aachen.de>
 
+	PR c++/27427
+	* pt.c (convert_nontype_argument): Return early on invalid arguments.
+
 	* pt.c (process_template_parm): Remove superfluous temporary.
 
 	PR c++/27430
diff --git a/gcc/cp/pt.c b/gcc/cp/pt.c
index c7d94f1a7ba..4d34da477dd 100644
--- a/gcc/cp/pt.c
+++ b/gcc/cp/pt.c
@@ -3457,6 +3457,8 @@ convert_nontype_argument (tree type, tree expr)
      instantiated -- but here we need the resolved form so that we can
      convert the argument.  */
   expr = fold_non_dependent_expr (expr);
+  if (error_operand_p (expr))
+    return error_mark_node;
   expr_type = TREE_TYPE (expr);
 
   /* HACK: Due to double coercion, we can get a
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 3e6e72511a1..63e386943b2 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2006-05-06  Volker Reichelt  <reichelt@igpm.rwth-aachen.de>
+
+	PR c++/27427
+	* g++.dg/template/incomplete2.C: New test.
+
 2006-05-06   Richard Guenther  <rguenther@suse.de>
 
 	PR tree-optimization/27151
diff --git a/gcc/testsuite/g++.dg/template/incomplete2.C b/gcc/testsuite/g++.dg/template/incomplete2.C
new file mode 100644
index 00000000000..23d393e99df
--- /dev/null
+++ b/gcc/testsuite/g++.dg/template/incomplete2.C
@@ -0,0 +1,13 @@
+// PR c++/27427
+// { dg-do compile }
+
+struct A;
+
+template<A&> void foo();
+
+A a;  // { dg-error "incomplete type" }
+
+void bar()
+{
+  foo<a>();  // { dg-error "no matching function" }
+}