diff --git a/gcc/ChangeLog b/gcc/ChangeLog
index ab1a59b1859..42ac032fac0 100644
--- a/gcc/ChangeLog
+++ b/gcc/ChangeLog
@@ -1,3 +1,11 @@
+2002-06-28  Neil Booth  <neil@daikokuya.co.uk>
+
+	PR preprocessor/7138
+	* cpplib.c (_cpp_handle_directive): Do traditional
+	preparation after setting state.angled_headers.
+	* cpptrad.c (scan_out_logical_line): Fix potential
+	quote bug.
+
 2002-06-27  Aldy Hernandez  <aldyh@redhat.com>
 
         * config/rs6000/rs6000.c (rs6000_override_options): Move
diff --git a/gcc/cpplib.c b/gcc/cpplib.c
index 6bb9f4d1bb2..f2d33a89e48 100644
--- a/gcc/cpplib.c
+++ b/gcc/cpplib.c
@@ -388,10 +388,6 @@ _cpp_handle_directive (pfile, indented)
 		   "style of line directive is a GCC extension");
     }
 
-  pfile->directive = dir;
-  if (CPP_OPTION (pfile, traditional))
-    prepare_directive_trad (pfile);
-
   if (dir)
     {
       /* If we have a directive that is not an opening conditional,
@@ -442,6 +438,10 @@ _cpp_handle_directive (pfile, indented)
 		   cpp_token_as_text (pfile, dname));
     }
 
+  pfile->directive = dir;
+  if (CPP_OPTION (pfile, traditional))
+    prepare_directive_trad (pfile);
+
   if (dir)
     {
       /* If we are processing a `#define' directive and we have been
diff --git a/gcc/cpptrad.c b/gcc/cpptrad.c
index 4d07d528de8..a72237b87b8 100644
--- a/gcc/cpptrad.c
+++ b/gcc/cpptrad.c
@@ -435,12 +435,13 @@ scan_out_logical_line (pfile, macro)
   const uchar *cur;
   uchar *out;
   struct fun_macro fmacro;
-  unsigned int c, paren_depth = 0, quote = 0;
+  unsigned int c, paren_depth = 0, quote;
   enum ls lex_state = ls_none;
 
   fmacro.buff = NULL;
 
  start_logical_line:
+  quote = 0;
   CUR (pfile->context) = pfile->buffer->cur;
   RLIMIT (pfile->context) = pfile->buffer->rlimit;
   pfile->out.cur = pfile->out.base;
@@ -502,7 +503,7 @@ scan_out_logical_line (pfile, macro)
 	    quote = '>';
 	  break;
 	case '>':
-	  if (pfile->state.angled_headers && c == quote)
+	  if (c == quote)
 	    {
 	      pfile->state.angled_headers = false;
 	      quote = 0;