diff --git a/ChangeLog b/ChangeLog
index e3b31667..69917cf6 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,11 @@
+1999-10-08  Paul D. Smith  <psmith@gnu.org>
+
+	* variable.c (initialize_file_variables): Always recurse to
+	initialize the parent's file variables: the parent might not have
+	any rules to run so it might not have been initialized before
+	this--we need this to set up the chain properly for
+	target-specific variables.
+
 1999-09-23  Paul D. Smith  <psmith@gnu.org>
 
 	* Version 3.78.1 released.
diff --git a/tests/ChangeLog b/tests/ChangeLog
index 871cab98..ef2ef625 100644
--- a/tests/ChangeLog
+++ b/tests/ChangeLog
@@ -1,3 +1,8 @@
+1999-10-08  Paul D. Smith  <psmith@gnu.org>
+
+	* scripts/features/targetvars: Add a check for PR/1378:
+	"Target-specific vars don't inherit correctly"
+
 1999-09-29  Paul D. Smith  <psmith@gnu.org>
 
 	* test_driver.pl (get_osname): Change $fancy_file_names to
diff --git a/tests/scripts/features/targetvars b/tests/scripts/features/targetvars
index e9fe0920..83bf9edf 100644
--- a/tests/scripts/features/targetvars
+++ b/tests/scripts/features/targetvars
@@ -105,4 +105,24 @@ $answer = "qvar = qvar\nqvar =\n";
 &compare_output($answer,&get_logfile(1));
 
 
+# TEST #8
+# For PR/1378: Target-specific vars don't inherit correctly
+
+$makefile2 = &get_tmpfile;
+
+open(MAKEFILE,"> $makefile2");
+print MAKEFILE <<'EOF';
+foo: FOO = foo
+bar: BAR = bar
+foo: bar
+bar: baz
+baz: ; @echo $(FOO) $(BAR)
+EOF
+close(MAKEFILE);
+
+&run_make_with_options("$makefile2", "", &get_logfile);
+$answer = "foo bar\n";
+&compare_output($answer, &get_logfile(1));
+
+
 1;
diff --git a/variable.c b/variable.c
index 377daf59..4eebb374 100644
--- a/variable.c
+++ b/variable.c
@@ -238,8 +238,7 @@ initialize_file_variables (file)
     l->next = &global_setlist;
   else
     {
-      if (file->parent->variables == 0)
-	initialize_file_variables (file->parent);
+      initialize_file_variables (file->parent);
       l->next = file->parent->variables;
     }
 }