diff --git a/pkgs/racket-test-core/tests/racket/letrec.rktl b/pkgs/racket-test-core/tests/racket/letrec.rktl
index 0df5bcf664..af5c715766 100644
--- a/pkgs/racket-test-core/tests/racket/letrec.rktl
+++ b/pkgs/racket-test-core/tests/racket/letrec.rktl
@@ -168,4 +168,9 @@
      (f)))
  letrec-exn?)
 
+;; Make sure a useless `set!` isn't discarded early
+(err/rt-test
+ (letrec ((B (begin (set! B B) 1))) 1)
+ letrec-exn?)
+
 (report-errs)
diff --git a/racket/src/racket/src/compile.c b/racket/src/racket/src/compile.c
index b0793ff451..85c487129d 100644
--- a/racket/src/racket/src/compile.c
+++ b/racket/src/racket/src/compile.c
@@ -994,7 +994,7 @@ static Scheme_Object *do_let_compile (Scheme_Object *form, Scheme_Comp_Env *orig
     use_box = MALLOC_N_ATOMIC(int, 1);
     *use_box = -1;
   } else
-    use_box = 0;
+    use_box = NULL;
   
   scheme_begin_dup_symbol_check(&r);
 
@@ -1061,6 +1061,7 @@ static Scheme_Object *do_let_compile (Scheme_Object *form, Scheme_Comp_Env *orig
         var->mode = SCHEME_VAR_MODE_COMPILE;
         var->compile.use_box = use_box;
         var->compile.use_position = m;
+        var->compile.keep_assignment = 1;
       }
       vars[m-pre_k] = var;
       frame = scheme_extend_comp_env(frame, names[m], (Scheme_Object *)var, mutate_frame, 0);
@@ -1074,7 +1075,7 @@ static Scheme_Object *do_let_compile (Scheme_Object *form, Scheme_Comp_Env *orig
                      (recursive ? SCHEME_LET_RECURSIVE : 0));
 
   if (recursive) {
-    int prev_might_invoke = 0;
+    int prev_might_invoke = 0, j;
     int group_clauses = 0;
     Scheme_Object *rhs;
 
@@ -1088,6 +1089,10 @@ static Scheme_Object *do_let_compile (Scheme_Object *form, Scheme_Comp_Env *orig
         rhs_env = scheme_set_comp_env_name(frame, NULL);
       rhs = compile_expr(rhs, rhs_env, 0);
       lv->value = rhs;
+
+      for (j = lv->count; j--; ) {
+        lv->vars[j]->compile.keep_assignment = 0;
+      }
         
       /* Record when this binding doesn't use any or later bindings in
          the same set. Break bindings into smaller sets based on this
diff --git a/racket/src/racket/src/optimize.c b/racket/src/racket/src/optimize.c
index e8c67aedd8..7e3b2eff4d 100644
--- a/racket/src/racket/src/optimize.c
+++ b/racket/src/racket/src/optimize.c
@@ -705,7 +705,9 @@ int scheme_omittable_expr(Scheme_Object *o, int vals, int fuel, int flags,
         && (SCHEME_LOCAL_POS(sb->var) == SCHEME_LOCAL_POS(sb->val)))
       return 1;
     else if (SAME_TYPE(scheme_ir_local_type, SCHEME_TYPE(sb->var))
-             && SAME_OBJ(sb->var, sb->val))
+             && SAME_OBJ(sb->var, sb->val)
+             && ((((Scheme_IR_Local *)sb->var)->mode != SCHEME_VAR_MODE_COMPILE)
+                 || !((Scheme_IR_Local *)sb->var)->compile.keep_assignment))
       return 1;
   }
 
diff --git a/racket/src/racket/src/schpriv.h b/racket/src/racket/src/schpriv.h
index e19c4ff701..1ae846478b 100644
--- a/racket/src/racket/src/schpriv.h
+++ b/racket/src/racket/src/schpriv.h
@@ -1414,6 +1414,7 @@ typedef struct Scheme_IR_Local
       /* To detect uses on right-hand sides in `letrec` */
       int *use_box;
       int use_position;
+      int keep_assignment; /* don't optimize away an assignment to this variable */
     } compile;
     struct {
       /* Maps the variable into the letrec-check pass's frames: */