diff --git a/js/src/ion/IonBuilder.cpp b/js/src/ion/IonBuilder.cpp
index e550a6a64499..966d046272ac 100644
--- a/js/src/ion/IonBuilder.cpp
+++ b/js/src/ion/IonBuilder.cpp
@@ -870,7 +870,6 @@ IonBuilder::inspectOpcode(JSOp op)
         return true;
 
       case JSOP_SETARG:
-        JS_ASSERT(inliningDepth == 0);
         // To handle this case, we should spill the arguments to the space where
         // actual arguments are stored. The tricky part is that if we add a MIR
         // to wrap the spilling action, we don't want the spilling to be
diff --git a/js/src/ion/IonFrameIterator-inl.h b/js/src/ion/IonFrameIterator-inl.h
index 8ba8a5ba4b82..18c0d984bb41 100644
--- a/js/src/ion/IonFrameIterator-inl.h
+++ b/js/src/ion/IonFrameIterator-inl.h
@@ -15,7 +15,7 @@ namespace ion {
 
 template <class Op>
 inline void
-SnapshotIterator::readFrameArgs(Op op, const Value *argv, Value *scopeChain, Value *thisv,
+SnapshotIterator::readFrameArgs(Op &op, const Value *argv, Value *scopeChain, Value *thisv,
                                 unsigned start, unsigned formalEnd, unsigned iterEnd)
 {
     if (scopeChain)
@@ -62,28 +62,35 @@ InlineFrameIterator::forEachCanonicalActualArg(JSContext *cx, Op op, unsigned st
 
     if (more()) {
         // There is still a parent frame of this inlined frame.
-        // Take arguments of the caller (parent inlined frame) it holds all actual
-        // arguments, needed in case of overflow, and because the analyze phase
-        // disable Ion inlining if the function redefine its arguments with JSOP_SETARG.
+        // The not overflown arguments are taken from the inlined frame,
+        // because it will have the updated value when JSOP_SETARG is done.
+        // All arguments (also the overflown) are the last pushed values in the parent frame.
+        // To get the overflown arguments, we need to take them from there.
 
+        // Get the non overflown arguments
+        unsigned formal_end = (end < nformal) ? end : nformal;
+        SnapshotIterator s(si_);
+        s.readFrameArgs(op, NULL, NULL, NULL, start, nformal, formal_end);
+
+        // The overflown arguments are not available in current frame.
+        // They are the last pushed arguments in the parent frame of this inlined frame.
         InlineFrameIterator it(cx, this);
-        ++it;
-        SnapshotIterator s(it.snapshotIterator());
+        SnapshotIterator parent_s((++it).snapshotIterator());
 
-        // Skip over all slots untill we get to the arguments slots
+        // Skip over all slots untill we get to the last slots (= arguments slots of callee)
         // the +2 is for [this] and [scopechain]
-        JS_ASSERT(s.slots() >= nactual + 2);
-        unsigned skip = s.slots() - nactual - 2;
+        JS_ASSERT(parent_s.slots() >= nactual + 2);
+        unsigned skip = parent_s.slots() - nactual - 2;
         for (unsigned j = 0; j < skip; j++)
-            s.skip();
+            parent_s.skip();
 
-        s.readFrameArgs(op, NULL, NULL, NULL, start, nactual, end);
+        // Get the overflown arguments
+        parent_s.readFrameArgs(op, NULL, NULL, NULL, nformal, nactual, end);
     } else {
         SnapshotIterator s(si_);
         Value *argv = frame_->actualArgs();
         s.readFrameArgs(op, argv, NULL, NULL, start, nformal, end);
     }
-
 }
 
 } // namespace ion
diff --git a/js/src/ion/IonFrameIterator.h b/js/src/ion/IonFrameIterator.h
index 5b458b45761a..6665fe0d7bd1 100644
--- a/js/src/ion/IonFrameIterator.h
+++ b/js/src/ion/IonFrameIterator.h
@@ -238,7 +238,7 @@ class SnapshotIterator : public SnapshotReader
     }
 
     template <class Op>
-    inline void readFrameArgs(Op op, const Value *argv, Value *scopeChain, Value *thisv,
+    inline void readFrameArgs(Op &op, const Value *argv, Value *scopeChain, Value *thisv,
                               unsigned start, unsigned formalEnd, unsigned iterEnd);
 
     Value maybeReadSlotByIndex(size_t index) {
diff --git a/js/src/jit-test/tests/ion/bug835178.js b/js/src/jit-test/tests/ion/bug835178.js
new file mode 100644
index 000000000000..ec2395192400
--- /dev/null
+++ b/js/src/jit-test/tests/ion/bug835178.js
@@ -0,0 +1,30 @@
+function boo() { return foo.arguments[0] }
+function foo(a,b,c) { if (a == 0) {a = 2; return boo();} return a }
+function inlined() { return foo.apply({}, arguments); }
+function test(a,b,c) { return inlined(a,b,c) }
+
+assertEq(test(1,2,3), 1);
+assertEq(test(0,2,3), 2);
+
+function g(a) { if (g.arguments[1]) return true; return false; };
+function f() { return g(false, true); };
+function h() { return f(false, false); }
+
+assertEq(h(false, false), true);
+assertEq(h(false, false), true);
+
+function g2(a) { if (a) { if (g2.arguments[1]) return true; return false; } return true; };
+function f2(a) { return g2(a, true); };
+function h2(a) { return f2(a, false); }
+
+assertEq(h2(false, false), true);
+assertEq(h2(true, false), true);
+
+// Currently disabled for now, but in testsuite to be sure
+function g3(a) { return a };
+function f3(a) { a = 3; return g3.apply({}, arguments); };
+function h3(a) { return f3(a); }
+
+assertEq(h3(0), 3);
+assertEq(h3(0), 3);
+
diff --git a/js/src/jsanalyze.cpp b/js/src/jsanalyze.cpp
index 01b4868905ba..a842551fcba2 100644
--- a/js/src/jsanalyze.cpp
+++ b/js/src/jsanalyze.cpp
@@ -447,7 +447,7 @@ ScriptAnalysis::analyzeBytecode(JSContext *cx)
 
           case JSOP_SETARG:
             modifiesArguments_ = true;
-            isIonInlineable = isJaegerInlineable = false;
+            isJaegerInlineable = false;
             break;
 
           case JSOP_GETPROP: