diff --git a/browser/components/places/content/editBookmarkOverlay.js b/browser/components/places/content/editBookmarkOverlay.js
index 1c29bc556df3..da5ea9d59805 100644
--- a/browser/components/places/content/editBookmarkOverlay.js
+++ b/browser/components/places/content/editBookmarkOverlay.js
@@ -583,10 +583,10 @@ var gEditItemOverlay = {
           tagsToAdd.push(tags[i]);
       }
 
-      if (tagsToAdd.length > 0)
-        txns.push(PlacesUIUtils.ptm.tagURI(this._uri, tagsToAdd));
       if (tagsToRemove.length > 0)
         txns.push(PlacesUIUtils.ptm.untagURI(this._uri, tagsToRemove));
+      if (tagsToAdd.length > 0)
+        txns.push(PlacesUIUtils.ptm.tagURI(this._uri, tagsToAdd));
 
       if (txns.length > 0) {
         var aggregate = PlacesUIUtils.ptm.aggregateTransactions("Update tags",
diff --git a/browser/components/places/tests/chrome/Makefile.in b/browser/components/places/tests/chrome/Makefile.in
index 968a73976b53..e6632918663e 100644
--- a/browser/components/places/tests/chrome/Makefile.in
+++ b/browser/components/places/tests/chrome/Makefile.in
@@ -46,6 +46,7 @@ include $(topsrcdir)/config/rules.mk
 _CHROME_TEST_FILES = \
 	test_treeview_date.xul \
 	test_editBookmarkOverlay.xul \
+	test_bug485100-change-case-loses-tag.xul \
 	$(NULL)
 
 libs:: $(_CHROME_TEST_FILES)
diff --git a/browser/components/places/tests/chrome/test_bug485100-change-case-loses-tag.xul b/browser/components/places/tests/chrome/test_bug485100-change-case-loses-tag.xul
new file mode 100644
index 000000000000..01fc8a030dc3
--- /dev/null
+++ b/browser/components/places/tests/chrome/test_bug485100-change-case-loses-tag.xul
@@ -0,0 +1,123 @@
+<?xml version="1.0"?>
+
+<!-- ***** BEGIN LICENSE BLOCK *****
+   - Version: MPL 1.1/GPL 2.0/LGPL 2.1
+   -
+   - The contents of this file are subject to the Mozilla Public License Version
+   - 1.1 (the "License"); you may not use this file except in compliance with
+   - the License. You may obtain a copy of the License at
+   - http://www.mozilla.org/MPL/
+   -
+   - Software distributed under the License is distributed on an "AS IS" basis,
+   - WITHOUT WARRANTY OF ANY KIND, either express or implied. See the License
+   - for the specific language governing rights and limitations under the
+   - License.
+   -
+   - The Original Code is the Places test code.
+   -
+   - The Initial Developer of the Original Code is Mozilla Corp.
+   - Portions created by the Initial Developer are Copyright (C) 2009
+   - the Initial Developer. All Rights Reserved.
+   -
+   - Contributor(s):
+   -   Marco Bonardo <mak77@bonardo.net> (Original Author)
+   -   Dietrich Ayala <dietrich@mozilla.com>
+   -
+   - Alternatively, the contents of this file may be used under the terms of
+   - either the GNU General Public License Version 2 or later (the "GPL"), or
+   - the GNU Lesser General Public License Version 2.1 or later (the "LGPL"),
+   - in which case the provisions of the GPL or the LGPL are applicable instead
+   - of those above. If you wish to allow use of your version of this file only
+   - under the terms of either the GPL or the LGPL, and not to allow others to
+   - use your version of this file under the terms of the MPL, indicate your
+   - decision by deleting the provisions above and replace them with the notice
+   - and other provisions required by the GPL or the LGPL. If you do not delete
+   - the provisions above, a recipient may use your version of this file under
+   - the terms of any one of the MPL, the GPL or the LGPL.
+   -
+   - ***** END LICENSE BLOCK ***** -->
+
+<?xml-stylesheet href="chrome://global/skin" type="text/css"?>
+<?xml-stylesheet href="chrome://mochikit/content/tests/SimpleTest/test.css"
+                 type="text/css"?>
+
+<?xml-stylesheet href="chrome://browser/skin/places/editBookmarkOverlay.css"?>
+<?xml-stylesheet href="chrome://browser/content/places/places.css"?>
+<?xml-stylesheet href="chrome://browser/skin/places/places.css"?>
+
+<?xul-overlay href="chrome://browser/content/places/placesOverlay.xul"?>
+<?xul-overlay href="chrome://browser/content/places/editBookmarkOverlay.xul"?>
+
+<!DOCTYPE window [
+  <!ENTITY % editBookmarkOverlayDTD SYSTEM "chrome://browser/locale/places/editBookmarkOverlay.dtd">
+  %editBookmarkOverlayDTD;
+]>
+
+<window xmlns="http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul"
+        title="485100: Exchanging a letter of a tag name with its big/small equivalent removes tag from bookmark"
+        onload="runTest();">
+
+  <script type="application/javascript"
+          src="chrome://mochikit/content/MochiKit/packed.js" />
+  <script type="application/javascript"
+          src="chrome://mochikit/content/tests/SimpleTest/SimpleTest.js" />
+  <script type="application/javascript"
+          src="chrome://browser/content/places/editBookmarkOverlay.js"/>
+
+  <body xmlns="http://www.w3.org/1999/xhtml" />
+
+  <vbox id="editBookmarkPanelContent"/>
+
+  <script type="application/javascript">
+  <![CDATA[
+
+    function runTest() {
+      const Cc = Components.classes;
+      const Ci = Components.interfaces;
+
+      var bs = Cc["@mozilla.org/browser/nav-bookmarks-service;1"].
+               getService(Ci.nsINavBookmarksService);
+      var ts = Cc["@mozilla.org/browser/tagging-service;1"].
+               getService(Ci.nsITaggingService);
+      var ios = Cc["@mozilla.org/network/io-service;1"].
+                getService(Ci.nsIIOService);
+      function uri(spec) {
+        return ios.newURI(spec, null, null);
+      }
+
+      var testURI = uri("http://www.mozilla.org/");
+      var testTag = "foo";
+      var testTagUpper = "Foo";
+
+      // Add a bookmark
+      var itemId = bs.insertBookmark(bs.toolbarFolder,
+                                     testURI,
+                                     bs.DEFAULT_INDEX,
+                                     "mozilla");
+
+      // Init panel
+      ok(gEditItemOverlay, "gEditItemOverlay is in context");
+      gEditItemOverlay.initPanel(itemId);
+
+      // add a tag
+      document.getElementById("editBMPanel_tagsField").value = testTag;
+      gEditItemOverlay.onTagsFieldBlur();
+
+      // test that the tag has been added in the backend
+      is(ts.getTagsForURI(testURI, {})[0], testTag, "tags match");
+
+      // change the tag
+      document.getElementById("editBMPanel_tagsField").value = testTagUpper;
+      gEditItemOverlay.onTagsFieldBlur();
+
+      // test that the tag has been added in the backend
+      is(ts.getTagsForURI(testURI, {})[0], testTagUpper, "tags match");
+
+      // Cleanup.
+      ts.untagURI(testURI, [testTag]);
+      bs.removeItem(itemId);
+    }
+  ]]>
+  </script>
+
+</window>