diff --git a/NEWS b/NEWS
index 49be082c..fa5a5b99 100644
--- a/NEWS
+++ b/NEWS
@@ -7,6 +7,9 @@ Any uppercase BUG_* names are modernish shell bug IDs.
 
 - The 'source' alias has been converted into a regular built-in command.
 
+- Functions that set variables in a virtual subshell will no longer affect
+  variables of the same name outside of the virtual subshell's environment.
+
 2020-06-14:
 
 - 'read -S' is now able to correctly handle strings with double quotes
diff --git a/src/cmd/ksh93/sh/subshell.c b/src/cmd/ksh93/sh/subshell.c
index 0aa1ceb4..ef33fb3b 100644
--- a/src/cmd/ksh93/sh/subshell.c
+++ b/src/cmd/ksh93/sh/subshell.c
@@ -251,9 +251,6 @@ Namval_t *sh_assignok(register Namval_t *np,int add)
 	/* don't bother with this */
 	if(!sp->shpwd || np==SH_LEVELNOD || np==L_ARGNOD || np==SH_SUBSCRNOD || np==SH_NAMENOD)
 		return(np);
-	/* don't bother to save if in newer scope */
-	if(sp->var!=shp->var_tree && sp->var!=shp->var_base && shp->last_root==shp->var_tree)
-		return(np);
 	if((ap=nv_arrayptr(np)) && (mp=nv_opensub(np)))
 	{
 		shp->last_root = ap->table;
diff --git a/src/cmd/ksh93/tests/subshell.sh b/src/cmd/ksh93/tests/subshell.sh
index 1a676f67..9098e91c 100755
--- a/src/cmd/ksh93/tests/subshell.sh
+++ b/src/cmd/ksh93/tests/subshell.sh
@@ -726,5 +726,18 @@ check_hash_table()
 (hash cat)
 [[ $(hash) == "chmod=$(whence -p chmod)" ]] || err_exit $'changes to a subshell\'s hash table affect the parent shell'
 
+# ======
+# Variables set in functions inside of a virtual subshell should not affect the
+# outside environment. This regression test must be run from the disk.
+testvars=$tmp/testvars.sh
+cat >| "$testvars" << 'EOF'
+c=0
+function set_ac { a=1; c=1; }
+function set_abc { ( set_ac ; b=1 ) }
+set_abc
+echo "a=$a b=$b c=$c"
+EOF
+v=$($SHELL $testvars) && [[ "$v" == "a= b= c=0" ]] || err_exit 'variables set in subshells are not confined to the subshell'
+
 # ======
 exit $((Errors<125?Errors:125))