diff --git a/src/update.c b/src/update.c
index ad7a6bf7..d54cbdbc 100644
--- a/src/update.c
+++ b/src/update.c
@@ -152,7 +152,7 @@ update_archive (void)
 
 			    for (p = dirp; *p; p += strlen (p) + 1)
 			      addname (namebuf_name (nbuf, p),
-				       0, false, NULL);
+				       name->change_dir, false, NULL);
 
 			    namebuf_free (nbuf);
 			    free (dirp);
diff --git a/tests/Makefile.am b/tests/Makefile.am
index 3e638e37..53761809 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -226,6 +226,7 @@ TESTSUITE_AT = \
  update.at\
  update01.at\
  update02.at\
+ update03.at\
  volsize.at\
  volume.at\
  verbose.at\
diff --git a/tests/testsuite.at b/tests/testsuite.at
index 6fe5f89c..1f1897b2 100644
--- a/tests/testsuite.at
+++ b/tests/testsuite.at
@@ -396,6 +396,7 @@ AT_BANNER([Updates])
 m4_include([update.at])
 m4_include([update01.at])
 m4_include([update02.at])
+m4_include([update03.at])
 
 AT_BANNER([Verifying the archive])
 m4_include([verify.at])
diff --git a/tests/update03.at b/tests/update03.at
new file mode 100644
index 00000000..0a38e275
--- /dev/null
+++ b/tests/update03.at
@@ -0,0 +1,51 @@
+# 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([update with chdir])
+AT_KEYWORDS([update update03 chdir])
+
+# Tar <=1.29 failed to chdir when -u was used with -C
+# Reported by: Ivan Kalvachev <ikalvachev@gmail.com>
+# References: <CABA=pqfSq-4PJYp7W2ezGOz+fR2uh74AyA7kOeXJBzg2o-oQBA@mail.gmail.com>,
+#             http://lists.gnu.org/archive/html/bug-tar/2016-08/msg00003.html
+AT_TAR_CHECK([
+mkdir dir1
+mkdir dir2
+mkdir dir1/subdir1 dir2/subdir2
+genfile --file dir1/subdir1/a
+genfile --file dir2/subdir2/a
+echo Create
+tar -vcf arc.tar -C dir1 subdir1 -C ../dir2 subdir2
+genfile --file dir1/subdir1/b
+genfile --file dir2/subdir2/c
+echo Update
+tar -vuf arc.tar -C dir1 subdir1 -C ../dir2 subdir2
+],
+[0],
+[Create
+subdir1/
+subdir1/a
+subdir2/
+subdir2/a
+Update
+subdir1/b
+subdir2/c
+])
+
+AT_CLEANUP
\ No newline at end of file