diff --git a/src/tar.c b/src/tar.c
index ba24c434..35bac38c 100644
--- a/src/tar.c
+++ b/src/tar.c
@@ -2201,8 +2201,9 @@ parse_default_options (void)
     {
       ws.ws_wordv[0] = (char*) program_name;
       more_options (ws.ws_offs + ws.ws_wordc, ws.ws_wordv, &loc);
+      /* Don't free consumed words */
+      ws.ws_wordc = 0;
     }
-
   wordsplit_free (&ws);
 }
 
diff --git a/tests/Makefile.am b/tests/Makefile.am
index 0ea6d172..3e638e37 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -171,6 +171,7 @@ TESTSUITE_AT = \
  positional03.at\
  options.at\
  options02.at\
+ options03.at\
  owner.at\
  pipe.at\
  recurse.at\
diff --git a/tests/options03.at b/tests/options03.at
new file mode 100644
index 00000000..de8b16df
--- /dev/null
+++ b/tests/options03.at
@@ -0,0 +1,44 @@
+# Process this file with autom4te to create testsuite. -*- Autotest -*-
+#
+# Test suite for GNU tar.
+# Copyright 2016 Free Software Foundation, Inc.
+#
+# This file is part of GNU tar.
+#
+# GNU tar is free software; you can redistribute it and/or modify
+# it under the terms of the GNU General Public License as published by
+# the Free Software Foundation; either version 3 of the License, or
+# (at your option) any later version.
+#
+# GNU tar is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+# GNU General Public License for more details.
+#
+# You should have received a copy of the GNU General Public License
+# along with this program.  If not, see <http://www.gnu.org/licenses/>.
+
+AT_SETUP([TAR_OPTIONS with string arguments])
+AT_KEYWORDS([options options03])
+
+# Check whether string values are passed correctly through the
+# TAR_OPTIONS environment variable.  In tar 1.29 the stored values
+# were inadvertenlty freedm which caused TAR_OPTION to malfunction.
+# Reported by: Jan Larres <jan@majutsushi.net>
+# References: <20160906072153.c75tga556ti5sgk2@majutsushi.net>,
+#             http://lists.gnu.org/archive/html/bug-tar/2016-09/msg00005.html
+
+AT_CHECK([
+echo dir/bar > exclude.list
+mkdir dir
+genfile --file=dir/foo
+genfile --file=dir/bar
+TAR_OPTIONS=--exclude-from=exclude.list tar cf arc.tar dir
+tar tf arc.tar
+],
+[0],
+[dir/
+dir/foo
+])
+
+AT_CLEANUP
diff --git a/tests/testsuite.at b/tests/testsuite.at
index 11c39c9f..6fe5f89c 100644
--- a/tests/testsuite.at
+++ b/tests/testsuite.at
@@ -204,6 +204,7 @@ m4_include([pipe.at])
 
 m4_include([options.at])
 m4_include([options02.at])
+m4_include([options03.at])
 
 AT_BANNER([Option compatibility])
 m4_include([opcomp01.at])