diff --git a/ChangeLog b/ChangeLog
index ff5bec59..498ad56f 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,5 +1,8 @@
 2013-05-26  Paul Smith  <psmith@gnu.org>
 
+	* read.c (readline): To be safe, move the entire buffer if we
+	detect a CR.  Fixes Savannah bug #38945.
+
 	* job.c (new_job): Compare OUT to the beginning of the OUT
 	var/function, not IN.  Fixes Savannah bug #39035.
 
diff --git a/read.c b/read.c
index 36d3a8fa..d6e6fcb1 100644
--- a/read.c
+++ b/read.c
@@ -2542,7 +2542,7 @@ readline (struct ebuffer *ebuf)
       if ((p - start) > 1 && p[-2] == '\r')
         {
           --p;
-          p[-1] = '\n';
+          memmove (p-1, p, strlen (p) + 1);
         }
 #endif
 
diff --git a/tests/ChangeLog b/tests/ChangeLog
index 1f93930f..7f1bd3cf 100644
--- a/tests/ChangeLog
+++ b/tests/ChangeLog
@@ -1,6 +1,7 @@
 2013-05-26  Paul Smith  <psmith@gnu.org>
 
 	* scripts/misc/bs-nl: Test for Savannah bug #39035.
+	Add a test for Savannah bug #38945.
 
 2013-05-22  Paul Smith  <psmith@gnu.org>
 
diff --git a/tests/scripts/misc/bs-nl b/tests/scripts/misc/bs-nl
index aa7661ea..4fc3f639 100644
--- a/tests/scripts/misc/bs-nl
+++ b/tests/scripts/misc/bs-nl
@@ -114,10 +114,15 @@ t:; @$(call f,"a \
 my $m1 = get_tmpfile();
 open(MAKEFILE, "> $m1");
 binmode(MAKEFILE);
-print MAKEFILE "FOO = foo \\\r\nbar\nall: ; \@echo \$(FOO)\n";
+print MAKEFILE "FOO = foo \\\r\n";
 close(MAKEFILE);
 
-run_make_with_options($m1, '', get_logfile());
+my $m2 = get_tmpfile();
+open(MAKEFILE, "> $m2");
+print MAKEFILE "include $m1\ndefine BAR\nall: ; \@echo \$(FOO) bar\nendef\n\$(eval \$(BAR))\n";
+close(MAKEFILE);
+
+run_make_with_options($m2, '', get_logfile());
 compare_output("foo bar\n", get_logfile(1));