diff --git a/NEWS b/NEWS
index c2475e3c..4a38e4fe 100644
--- a/NEWS
+++ b/NEWS
@@ -30,6 +30,10 @@ http://sv.gnu.org/bugs/index.php?group=make&report_id=111&fix_release_id=106&set
   WARNING: Backward-incompatibility! The internal-only command line option
   --jobserver-fds has been renamed for publishing, to --jobserver-auth.
 
+* The amount of parallelism can be determined by querying MAKEFLAGS, even when
+  the job server is enabled (previously MAKEFLAGS would always contain only
+  "-j" when job server was enabled).
+
 * VMS-specific changes:
 
   * Perl test harness now works.
diff --git a/doc/make.texi b/doc/make.texi
index b4ce44ae..2dc907a3 100644
--- a/doc/make.texi
+++ b/doc/make.texi
@@ -4721,9 +4721,9 @@ doesn't count against the total jobs (otherwise we could get @samp{N}
 sub-@code{make}s running and have no slots left over for any real work!)
 
 If your operating system doesn't support the above communication, then
-@samp{-j 1} is always put into @code{MAKEFLAGS} instead of the value you
-specified.  This is because if the @w{@samp{-j}} option were passed down
-to sub-@code{make}s, you would get many more jobs running in parallel
+no @samp{-j} is added to @code{MAKEFLAGS}, so that sub-@code{make}s
+run in non-parallel mode.  If the @w{@samp{-j}} option were passed down
+to sub-@code{make}s you would get many more jobs running in parallel
 than you asked for.  If you give @samp{-j} with no numeric argument,
 meaning to run as many jobs as possible in parallel, this is passed
 down, since multiple infinities are no more than one.@refill
diff --git a/main.c b/main.c
index bf8fb0dc..ee08720f 100644
--- a/main.c
+++ b/main.c
@@ -259,19 +259,23 @@ struct rlimit stack_limit;
 #endif
 
 
-/* Number of job slots (commands that can be run at once).  */
+/* Number of job slots for parallelism.  */
 
-unsigned int job_slots = 1;
-unsigned int default_job_slots = 1;
+unsigned int job_slots;
+
+#define INVALID_JOB_SLOTS (-1)
 static unsigned int master_job_slots = 0;
+static int arg_job_slots = INVALID_JOB_SLOTS;
+
+static const int default_job_slots = INVALID_JOB_SLOTS;
 
 /* Value of job_slots that means no limit.  */
 
-static unsigned int inf_jobs = 0;
+static const int inf_jobs = 0;
 
 /* Authorization for the jobserver.  */
 
-char *jobserver_auth = NULL;
+static char *jobserver_auth = NULL;
 
 /* Handle for the mutex used on Windows to synchronize output of our
    children under -O.  */
@@ -456,7 +460,7 @@ static const struct command_switch switches[] =
     { 'f', filename, &makefiles, 0, 0, 0, 0, 0, "file" },
     { 'I', filename, &include_directories, 1, 1, 0, 0, 0,
       "include-dir" },
-    { 'j', positive_int, &job_slots, 1, 1, 0, &inf_jobs, &default_job_slots,
+    { 'j', positive_int, &arg_job_slots, 1, 1, 0, &inf_jobs, &default_job_slots,
       "jobs" },
 #ifndef NO_FLOAT
     { 'l', floating, &max_load_average, 1, 1, 0, &default_load_average,
@@ -1057,8 +1061,13 @@ msdos_return_to_initial_directory (void)
 }
 #endif  /* __MSDOS__ */
 
-
-
+static void
+reset_jobserver ()
+{
+  jobserver_clear ();
+  free (jobserver_auth);
+  jobserver_auth = NULL;
+}
 
 #ifdef _AMIGA
 int
@@ -1074,6 +1083,7 @@ main (int argc, char **argv, char **envp)
   PATH_VAR (current_directory);
   unsigned int restarts = 0;
   unsigned int syncing = 0;
+  int argv_slots;
 #ifdef WINDOWS32
   const char *unix_path = NULL;
   const char *windows32_path = NULL;
@@ -1483,24 +1493,34 @@ main (int argc, char **argv, char **envp)
                                  || output_sync == OUTPUT_SYNC_TARGET);
   OUTPUT_SET (&make_sync);
 
-  decode_switches (argc, (const char **)argv, 0);
+  /* Remember the job slots set through the environment vs. command line.  */
+  {
+    int env_slots = arg_job_slots;
+    arg_job_slots = INVALID_JOB_SLOTS;
 
-    /* Set a variable specifying whether stdout/stdin is hooked to a TTY.  */
+    decode_switches (argc, (const char **)argv, 0);
+    argv_slots = arg_job_slots;
+
+    if (arg_job_slots == INVALID_JOB_SLOTS)
+      arg_job_slots = env_slots;
+  }
+
+  /* Set a variable specifying whether stdout/stdin is hooked to a TTY.  */
 #ifdef HAVE_ISATTY
-    if (isatty (fileno (stdout)))
-      if (! lookup_variable (STRING_SIZE_TUPLE ("MAKE_TERMOUT")))
-        {
-          const char *tty = TTYNAME (fileno (stdout));
-          define_variable_cname ("MAKE_TERMOUT", tty ? tty : DEFAULT_TTYNAME,
-                                 o_default, 0)->export = v_export;
-        }
-    if (isatty (fileno (stderr)))
-      if (! lookup_variable (STRING_SIZE_TUPLE ("MAKE_TERMERR")))
-        {
-          const char *tty = TTYNAME (fileno (stderr));
-          define_variable_cname ("MAKE_TERMERR", tty ? tty : DEFAULT_TTYNAME,
-                                 o_default, 0)->export = v_export;
-        }
+  if (isatty (fileno (stdout)))
+    if (! lookup_variable (STRING_SIZE_TUPLE ("MAKE_TERMOUT")))
+      {
+        const char *tty = TTYNAME (fileno (stdout));
+        define_variable_cname ("MAKE_TERMOUT", tty ? tty : DEFAULT_TTYNAME,
+                               o_default, 0)->export = v_export;
+      }
+  if (isatty (fileno (stderr)))
+    if (! lookup_variable (STRING_SIZE_TUPLE ("MAKE_TERMERR")))
+      {
+        const char *tty = TTYNAME (fileno (stderr));
+        define_variable_cname ("MAKE_TERMERR", tty ? tty : DEFAULT_TTYNAME,
+                               o_default, 0)->export = v_export;
+      }
 #endif
 
   /* Reset in case the switches changed our minds.  */
@@ -1600,37 +1620,43 @@ main (int argc, char **argv, char **envp)
   /* We may move, but until we do, here we are.  */
   starting_directory = current_directory;
 
-#ifdef MAKE_JOBSERVER
-  /* If the jobserver_auth option is seen, make sure that -j is reasonable.
-     This can't be usefully set in the makefile, and we want to verify the
-     authorization is valid before any other aspect of make has a chance to
-     start using it for something else.  */
+  /* Set up the job_slots value and the jobserver.  This can't be usefully set
+     in the makefile, and we want to verify the authorization is valid before
+     make has a chance to start using it for something else.  */
 
   if (jobserver_auth)
     {
-      /* The combination of jobserver_auth and !job_slots means we're using
-         the jobserver.  If !job_slots and no jobserver_auth, we can start
-         infinite jobs.  If we see both jobserver_auth and job_slots >0 that
-         means the user set -j explicitly.  This is broken; in this case obey
-         the user (ignore the jobserver for this make) but print a message.
-         If we've restarted, we already printed this the first time.  */
+      if (argv_slots == INVALID_JOB_SLOTS)
+        {
+          if (jobserver_parse_auth (jobserver_auth))
+            {
+              /* Success!  Use the jobserver.  */
+              job_slots = 0;
+              goto job_setup_complete;
+            }
 
-      if (!job_slots)
-        jobserver_parse_auth (jobserver_auth);
+          O (error, NILF, _("warning: jobserver unavailable: using -j1.  Add '+' to parent make rule."));
+          arg_job_slots = 1;
+        }
 
-      else if (! restarts)
+      /* The user provided a -j setting on the command line: use it.  */
+      else if (!restarts)
+        /* If restarts is >0 we already printed this message.  */
         O (error, NILF,
            _("warning: -jN forced in submake: disabling jobserver mode."));
 
-      if (job_slots > 0)
-        {
-          /* If job_slots is set now then we're not using jobserver */
-          jobserver_clear ();
-          free (jobserver_auth);
-          jobserver_auth = NULL;
-        }
+      /* We failed to use our parent's jobserver.  */
+      reset_jobserver ();
+      job_slots = (unsigned int)arg_job_slots;
     }
-#endif
+  else if (arg_job_slots == INVALID_JOB_SLOTS)
+    /* The default is one job at a time.  */
+    job_slots = 1;
+  else
+    /* Use whatever was provided.  */
+    job_slots = (unsigned int)arg_job_slots;
+
+ job_setup_complete:
 
   /* The extra indirection through $(MAKE_COMMAND) is done
      for hysterical raisins.  */
@@ -2024,7 +2050,7 @@ main (int argc, char **argv, char **envp)
   }
 
 #if defined (__MSDOS__) || defined (__EMX__) || defined (VMS)
-  if (job_slots != 1
+  if (arg_job_slots != 1
 # ifdef __EMX__
       && _osmode != OS2_MODE /* turn off -j if we are in DOS mode */
 # endif
@@ -2033,30 +2059,29 @@ main (int argc, char **argv, char **envp)
       O (error, NILF,
          _("Parallel jobs (-j) are not supported on this platform."));
       O (error, NILF, _("Resetting to single job (-j1) mode."));
-      job_slots = 1;
+      arg_job_slots = job_slots = 1;
     }
 #endif
 
-#ifdef MAKE_JOBSERVER
-  if (job_slots > 1)
+  /* If we have >1 slot at this point, then we're a top-level make.
+     Set up the jobserver.
+
+     Every make assumes that it always has one job it can run.  For the
+     submakes it's the token they were given by their parent.  For the top
+     make, we just subtract one from the number the user wants.  */
+
+  if (job_slots > 1 && jobserver_setup (job_slots - 1))
     {
-      /* If we have >1 slot at this point, then we're a top-level make.
-         Set up the jobserver.
-
-         Every make assumes that it always has one job it can run.  For the
-         submakes it's the token they were given by their parent.  For the
-         top make, we just subtract one from the number the user wants.  */
-
-      jobserver_setup (job_slots - 1);
-
-      /* We're using the jobserver so set job_slots to 0.  */
-      master_job_slots = job_slots;
-      job_slots = 0;
-
       /* Fill in the jobserver_auth for our children.  */
       jobserver_auth = jobserver_get_auth ();
+
+      if (jobserver_auth)
+        {
+          /* We're using the jobserver so set job_slots to 0.  */
+          master_job_slots = job_slots;
+          job_slots = 0;
+        }
     }
-#endif
 
   /* If we're not using parallel jobs, then we don't need output sync.
      This is so people can enable output sync in GNUMAKEFLAGS or similar, but
@@ -2365,11 +2390,6 @@ main (int argc, char **argv, char **envp)
 
           ++restarts;
 
-          /* If we're re-exec'ing the first make, put back the number of
-             job slots so define_makefiles() will get it right.  */
-          if (master_job_slots)
-            job_slots = master_job_slots;
-
           if (ISDB (DB_BASIC))
             {
               const char **p;
@@ -3400,14 +3420,7 @@ clean_jobserver (int status)
              "INTERNAL: Exiting with %u jobserver tokens available; should be %u!",
              tokens, master_job_slots);
 
-      jobserver_clear ();
-
-      /* Clean out jobserver_auth so we don't pass this information to any
-         sub-makes.  Also reset job_slots since it will be put on the command
-         line, not in MAKEFLAGS.  */
-      job_slots = default_job_slots;
-      free (jobserver_auth);
-      jobserver_auth = NULL;
+      reset_jobserver ();
     }
 }
 
diff --git a/os.h b/os.h
index f8a5a233..ac5350b1 100644
--- a/os.h
+++ b/os.h
@@ -23,10 +23,10 @@ this program.  If not, see <http://www.gnu.org/licenses/>.  */
 unsigned int jobserver_enabled ();
 
 /* Called in the master instance to set up the jobserver initially.  */
-void jobserver_setup (int job_slots);
+unsigned int jobserver_setup (int job_slots);
 
 /* Called in a child instance to connect to the jobserver.  */
-void jobserver_parse_auth (const char* auth);
+unsigned int jobserver_parse_auth (const char* auth);
 
 /* Returns an allocated buffer used to pass to child instances.  */
 char *jobserver_get_auth ();
@@ -57,13 +57,13 @@ void jobserver_pre_acquire ();
    in this case we won't wait forever, so we can check the load.
    Returns 1 if we got a token, or 0 if we stopped waiting due to a child
    exiting or a timeout.    */
-int jobserver_acquire (int timeout);
+unsigned int jobserver_acquire (int timeout);
 
 #else
 
 #define jobserver_enabled()         (0)
-#define jobserver_setup(_slots)     (void)(0)
-#define jobserver_parse_auth(_auth) (void)(0)
+#define jobserver_setup(_slots)     (0)
+#define jobserver_parse_auth(_auth) (0)
 #define jobserver_get_auth()        (NULL)
 #define jobserver_clear()           (void)(0)
 #define jobserver_release(_fatal)   (void)(0)
diff --git a/posixos.c b/posixos.c
index 94083059..8c270010 100644
--- a/posixos.c
+++ b/posixos.c
@@ -59,7 +59,7 @@ make_job_rfd ()
 #endif
 }
 
-void
+unsigned int
 jobserver_setup (int slots)
 {
   int r;
@@ -77,9 +77,11 @@ jobserver_setup (int slots)
       if (r != 1)
         pfatal_with_name (_("init jobserver pipe"));
     }
+
+  return 1;
 }
 
-void
+unsigned int
 jobserver_parse_auth (const char *auth)
 {
   /* Given the command-line parameter, parse it.  */
@@ -106,12 +108,12 @@ jobserver_parse_auth (const char *auth)
       if (errno != EBADF)
         pfatal_with_name (_("jobserver pipeline"));
 
-      O (error, NILF,
-         _("warning: jobserver unavailable: using -j1.  Add '+' to parent make rule."));
-
-      job_slots = 1;
       job_fds[0] = job_fds[1] = -1;
+
+      return 0;
     }
+
+  return 1;
 }
 
 char *
@@ -175,7 +177,8 @@ jobserver_acquire_all ()
 }
 
 /* Prepare the jobserver to start a child process.  */
-void jobserver_pre_child (int recursive)
+void
+jobserver_pre_child (int recursive)
 {
   /* If it's not a recursive make, avoid polutting the jobserver pipes.  */
   if (!recursive && job_fds[0] >= 0)
@@ -185,7 +188,8 @@ void jobserver_pre_child (int recursive)
     }
 }
 
-void jobserver_post_child (int recursive)
+void
+jobserver_post_child (int recursive)
 {
 #if defined(F_GETFD) && defined(F_SETFD)
   if (!recursive && job_fds[0] >= 0)
@@ -229,7 +233,7 @@ jobserver_pre_acquire ()
    and only unblocked (atomically) within the pselect() call, so we can
    never miss a SIGCHLD.
  */
-int
+unsigned int
 jobserver_acquire (int timeout)
 {
   sigset_t empty;
@@ -273,7 +277,7 @@ jobserver_acquire (int timeout)
 
   /* What does it mean if read() returns 0?  It shouldn't happen because only
      the master make can reap all the tokens and close the write side...??  */
-  return r;
+  return r > 0;
 }
 
 #else
@@ -358,7 +362,7 @@ set_child_handler_action_flags (int set_handler, int set_alarm)
 #endif
 }
 
-int
+unsigned int
 jobserver_acquire (int timeout)
 {
   char intake;
diff --git a/tests/scripts/features/jobserver b/tests/scripts/features/jobserver
index b5549cc9..7da4a654 100644
--- a/tests/scripts/features/jobserver
+++ b/tests/scripts/features/jobserver
@@ -12,6 +12,48 @@ if (!$parallel_jobs) {
   return -1;
 }
 
+# Shorthand
+my $np = '--no-print-directory';
+
+# Simple test of MAKEFLAGS settings
+run_make_test(q!
+SHOW = $(patsubst --jobserver-auth=%,--jobserver-auth=<auth>,$(MAKEFLAGS))
+recurse: ; @echo $@: "/$(SHOW)/"; $(MAKE) -f #MAKEFILE# all
+all:;@echo $@: "/$(SHOW)/"
+!,
+              "-j2 $np", "recurse: /-j2 --jobserver-auth=<auth> $np/\nall: /-j2 --jobserver-auth=<auth> $np/\n");
+
+# Setting parallelism with the environment
+# Command line should take precedence over the environment
+$extraENV{MAKEFLAGS} = "-j2 $np";
+run_make_test(q!
+SHOW = $(patsubst --jobserver-auth=%,--jobserver-auth=<auth>,$(MAKEFLAGS))
+recurse: ; @echo $@: "/$(SHOW)/"; $(MAKE) -f #MAKEFILE# all
+all:;@echo $@: "/$(SHOW)/"
+!,
+              '', "recurse: /-j2 --jobserver-auth=<auth> $np/\nall: /-j2 --jobserver-auth=<auth> $np/\n");
+delete $extraENV{MAKEFLAGS};
+
+# Test override of -jN
+$extraENV{MAKEFLAGS} = "-j9 $np";
+run_make_test(q!
+SHOW = $(patsubst --jobserver-auth=%,--jobserver-auth=<auth>,$(MAKEFLAGS))
+recurse: ; @echo $@: "/$(SHOW)/"; $(MAKE) -j3 -f #MAKEFILE# recurse2
+recurse2: ; @echo $@: "/$(SHOW)/"; $(MAKE) -f #MAKEFILE# all
+all:;@echo $@: "/$(SHOW)/"
+!,
+              "-j2 $np", "recurse: /-j2 --jobserver-auth=<auth> $np/\n#MAKE#[1]: warning: -jN forced in submake: disabling jobserver mode.\nrecurse2: /-j3 --jobserver-auth=<auth> $np/\nall: /-j3 --jobserver-auth=<auth> $np/\n");
+delete $extraENV{MAKEFLAGS};
+
+# Test override of -jN with -j
+run_make_test(q!
+SHOW = $(patsubst --jobserver-auth=%,--jobserver-auth=<auth>,$(MAKEFLAGS))
+recurse: ; @echo $@: "/$(SHOW)/"; $(MAKE) -j -f #MAKEFILE# recurse2
+recurse2: ; @echo $@: "/$(SHOW)/"; $(MAKE) -f #MAKEFILE# all
+all:;@echo $@: "/$(SHOW)/"
+!,
+              "-j2 $np", "recurse: /-j2 --jobserver-auth=<auth> $np/\n#MAKE#[1]: warning: -jN forced in submake: disabling jobserver mode.\nrecurse2: /-j $np/\nall: /-j $np/\n");
+
 # Don't put --jobserver-auth into a re-exec'd MAKEFLAGS.
 # We can't test this directly because there's no way a makefile can
 # show the value of MAKEFLAGS we were re-exec'd with.  We can intuit it
@@ -34,7 +76,7 @@ inc.mk:
 #	@echo 'MAKEFLAGS = $(MAKEFLAGS)'
 	@echo 'FOO = bar' > $@
 !,
-              '--no-print-directory -j2', "#MAKE#[1]: warning: -jN forced in submake: disabling jobserver mode.\nall\n");
+              "$np -j2", "#MAKE#[1]: warning: -jN forced in submake: disabling jobserver mode.\nall\n");
 
 unlink('inc.mk');
 
@@ -52,7 +94,7 @@ close(MAKEFILE);
 run_make_test(q!
 default: ; @ #MAKEPATH# -f Makefile2
 !,
-              '-j2 --no-print-directory',
+              "-j2 $np",
 "#MAKE#[1]: warning: jobserver unavailable: using -j1.  Add '+' to parent make rule.
 #MAKE#[1]: Nothing to be done for 'foo'.");
 
diff --git a/tests/scripts/features/output-sync b/tests/scripts/features/output-sync
index ee3e5ad8..64d6fe08 100644
--- a/tests/scripts/features/output-sync
+++ b/tests/scripts/features/output-sync
@@ -140,7 +140,7 @@ bar: start
 bar: end
 baz: start
 baz: end
-#MAKE#[1]: Leaving directory '#PWD#/bar'\n", 0, 6);
+#MAKE#[1]: Leaving directory '#PWD#/bar'\n", 0, 10);
 
 # Test per-target synchronization.
 # Note we have to sleep again here after starting the foo makefile before
@@ -171,7 +171,7 @@ foo: end
 #MAKE#[1]: Entering directory '#PWD#/bar'
 baz: start
 baz: end
-#MAKE#[1]: Leaving directory '#PWD#/bar'\n", 0, 6);
+#MAKE#[1]: Leaving directory '#PWD#/bar'\n", 0, 10);
 
 # Rerun but this time suppress the directory tracking
 unlink(@syncfiles);
@@ -183,7 +183,7 @@ bar: end
 foo: start
 foo: end
 baz: start
-baz: end\n", 0, 6);
+baz: end\n", 0, 10);
 
 # Test that messages from make itself are enclosed with
 # "Entering/Leaving directory" messages.
@@ -236,7 +236,7 @@ bar: end
 #MAKE#[1]: Leaving directory '#PWD#/bar'
 #MAKE#[1]: Entering directory '#PWD#/foo'
 foo: end
-#MAKE#[1]: Leaving directory '#PWD#/foo'\n", 0, 6);
+#MAKE#[1]: Leaving directory '#PWD#/foo'\n", 0, 10);
 
 
 # Remove temporary directories and contents.
diff --git a/tests/scripts/variables/MAKEFLAGS b/tests/scripts/variables/MAKEFLAGS
index 8a5d0f6a..0fac74a3 100644
--- a/tests/scripts/variables/MAKEFLAGS
+++ b/tests/scripts/variables/MAKEFLAGS
@@ -39,3 +39,7 @@ jump Works: MAKEFLAGS=e --no-print-directory
 print Works: MAKEFLAGS=e --no-print-directory');
 
 1;
+
+### Local Variables:
+### eval: (setq whitespace-action (delq 'auto-cleanup whitespace-action))
+### End:
diff --git a/w32/w32os.c b/w32/w32os.c
index 170c6d4c..533b9100 100644
--- a/w32/w32os.c
+++ b/w32/w32os.c
@@ -33,7 +33,7 @@ this program.  If not, see <http://www.gnu.org/licenses/>.  */
 static char jobserver_semaphore_name[MAX_PATH + 1];
 static HANDLE jobserver_semaphore = NULL;
 
-void
+unsigned int
 jobserver_setup (int slots)
 {
   /* sub_proc.c cannot wait for more than MAXIMUM_WAIT_OBJECTS objects
@@ -61,15 +61,17 @@ jobserver_setup (int slots)
       ONS (fatal, NILF,
            _("creating jobserver semaphore: (Error %ld: %s)"), err, estr);
     }
+
+  return 1;
 }
 
-void
+unsigned int
 jobserver_parse_auth (const char *auth)
 {
   jobserver_semaphore = OpenSemaphore (
-  SEMAPHORE_ALL_ACCESS,   /* Semaphore access setting */
-    FALSE,                  /* Child processes DON'T inherit */
-    auth);                   /* Semaphore name */
+      SEMAPHORE_ALL_ACCESS,   /* Semaphore access setting */
+      FALSE,                  /* Child processes DON'T inherit */
+      auth);                  /* Semaphore name */
 
   if (jobserver_semaphore == NULL)
     {
@@ -80,6 +82,8 @@ jobserver_parse_auth (const char *auth)
              auth, err, estr);
     }
   DB (DB_JOBS, (_("Jobserver client (semaphore %s)\n"), auth));
+
+  return 1;
 }
 
 char *
@@ -161,7 +165,7 @@ jobserver_pre_acquire ()
 
 /* Returns 1 if we got a token, or 0 if a child has completed.
    The Windows implementation doesn't support load detection.  */
-int
+unsigned int
 jobserver_acquire (int timeout)
 {
     HANDLE handles[MAXIMUM_WAIT_OBJECTS];