diff --git a/gcc/fortran/ChangeLog b/gcc/fortran/ChangeLog
index d17b047aa82f0603b4c34710c7560c838967a66e..5dad6776199d4dc79ef50f036c13f035a161de71 100644
--- a/gcc/fortran/ChangeLog
+++ b/gcc/fortran/ChangeLog
@@ -1,3 +1,11 @@
+2006-12-04  Paul Thomas  <pault@gcc.gnu.org>
+
+	PR fortran/29916
+	* resolve.c (resolve_symbol): Allow host-associated variables
+	  the specification expression of an array-valued function.
+	* expr.c (check_restricted): Accept host-associated dummy
+	  array indices.
+
 2006-12-03  Paul Thomas  <pault@gcc.gnu.org>
 
 	PR fortran/29642
diff --git a/gcc/fortran/expr.c b/gcc/fortran/expr.c
index 304d7c1f00d08592de5b86c6f5ed4f757389e651..16e89f85c264bcd4db2f1b79acbd62967b8dfbe8 100644
--- a/gcc/fortran/expr.c
+++ b/gcc/fortran/expr.c
@@ -2047,14 +2047,15 @@ check_restricted (gfc_expr * e)
 
       /* gfc_is_formal_arg broadcasts that a formal argument list is being processed
 	 in resolve.c(resolve_formal_arglist).  This is done so that host associated
-	 dummy array indices are accepted (PR23446).  */
+	 dummy array indices are accepted (PR23446). This mechanism also does the
+	 same for the specification expressions of array-valued functions.  */
       if (sym->attr.in_common
 	  || sym->attr.use_assoc
 	  || sym->attr.dummy
 	  || sym->ns != gfc_current_ns
 	  || (sym->ns->proc_name != NULL
 	      && sym->ns->proc_name->attr.flavor == FL_MODULE)
-	  || gfc_is_formal_arg ())
+	  || (gfc_is_formal_arg () && (sym->ns == gfc_current_ns)))
 	{
 	  t = SUCCESS;
 	  break;
diff --git a/gcc/fortran/resolve.c b/gcc/fortran/resolve.c
index d682b223b453f58a48d233379e60b3a30707793d..75a6ca31b8f5730e740057ad745da5b73105996c 100644
--- a/gcc/fortran/resolve.c
+++ b/gcc/fortran/resolve.c
@@ -6043,8 +6043,17 @@ resolve_symbol (gfc_symbol * sym)
      on COMMON blocks.  */
 
   check_constant = sym->attr.in_common && !sym->attr.pointer;
+
+  /* Set the formal_arg_flag so that check_conflict will not throw
+     an error for host associated variables in the specification
+     expression for an array_valued function.  */
+  if (sym->attr.function && sym->as)
+    formal_arg_flag = 1;
+
   gfc_resolve_array_spec (sym->as, check_constant);
 
+  formal_arg_flag = 0;
+
   /* Resolve formal namespaces.  */
 
   if (formal_ns_flag && sym != NULL && sym->formal_ns != NULL)
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index fadccd7f266636b00afaa4cf61bcf2af82f693bc..219c66b5d209f915ddd63a42b71980c3d3f454ea 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2006-12-04  Paul Thomas  <pault@gcc.gnu.org>
+
+	PR fortran/29916
+	* gfortran.dg/host_dummy_index_1.f90: Added additional test.
+
 2006-12-04  Jakub Jelinek  <jakub@redhat.com>
 
 	PR middle-end/29965
diff --git a/gcc/testsuite/gfortran.dg/host_dummy_index_1.f90 b/gcc/testsuite/gfortran.dg/host_dummy_index_1.f90
index cc045ff96bc98e17aa3bb734219cbc65331c6d3f..62080f940f70f3767a9dfe769ca178cc111fa3df 100644
--- a/gcc/testsuite/gfortran.dg/host_dummy_index_1.f90
+++ b/gcc/testsuite/gfortran.dg/host_dummy_index_1.f90
@@ -1,8 +1,10 @@
 ! { dg-do run }
 ! Tests the fix for PR23446. Based on PR example.
-!
 ! Contributed by Paul Thomas  <pault@gcc.gnu.org>
 !
+! Tests furthermore the fix for PR fortran/29916.
+! Test contributed by Marco Restelli <mrestelli@gmail.com>
+!
 PROGRAM TST
   INTEGER IMAX
   INTEGER :: A(4) = 1
@@ -12,6 +14,7 @@ PROGRAM TST
   CALL T(A)
   CALL U(A)
   if ( ALL(A.ne.(/2,2,3,4/))) CALL ABORT ()
+  if ( ALL(F().ne.(/2.0,2.0/))) CALL ABORT()
 
 CONTAINS
   SUBROUTINE S(A)
@@ -26,4 +29,8 @@ CONTAINS
     INTEGER A(2,IMAX)
     A(2,2) = 4
   END SUBROUTINE U
+  FUNCTION F()
+    real :: F(IMAX)
+    F = 2.0
+  END FUNCTION F
 ENDPROGRAM TST