diff --git a/lib/Sema/SemaExpr.cpp b/lib/Sema/SemaExpr.cpp
index c8e8ecda86..6c25c272f3 100644
--- a/lib/Sema/SemaExpr.cpp
+++ b/lib/Sema/SemaExpr.cpp
@@ -7683,7 +7683,10 @@ void Sema::MarkDeclarationReferenced(SourceLocation Loc, Decl *D) {
     }
 
     // FIXME: keep track of references to static functions
-    Function->setUsed(true);
+
+    // Recursive functions should be marked when used from another function.
+    if (CurContext != Function)
+      Function->setUsed(true);
 
     return;
   }
diff --git a/test/Sema/warn-unused-function.c b/test/Sema/warn-unused-function.c
index 5ae0cce079..24d4fade9b 100644
--- a/test/Sema/warn-unused-function.c
+++ b/test/Sema/warn-unused-function.c
@@ -44,3 +44,6 @@ static void f11(void) { }  // expected-warning{{unused}}
 
 static void f12(void) { }  // expected-warning{{unused}}
 static void f12(void);
+
+// PR7923
+static void unused(void) { unused(); }  // expected-warning{{unused}}