diff --git a/drivers/md/raid1.c b/drivers/md/raid1.c
index 97ee870..3a95cc5 100644
--- a/drivers/md/raid1.c
+++ b/drivers/md/raid1.c
@@ -271,21 +271,25 @@
 	 */
 	update_head_pos(mirror, r1_bio);
 
-	if (uptodate || (conf->raid_disks - conf->mddev->degraded) <= 1) {
-		/*
-		 * Set R1BIO_Uptodate in our master bio, so that
-		 * we will return a good error code for to the higher
-		 * levels even if IO on some other mirrored buffer fails.
-		 *
-		 * The 'master' represents the composite IO operation to
-		 * user-side. So if something waits for IO, then it will
-		 * wait for the 'master' bio.
+	if (uptodate)
+		set_bit(R1BIO_Uptodate, &r1_bio->state);
+	else {
+		/* If all other devices have failed, we want to return
+		 * the error upwards rather than fail the last device.
+		 * Here we redefine "uptodate" to mean "Don't want to retry"
 		 */
-		if (uptodate)
-			set_bit(R1BIO_Uptodate, &r1_bio->state);
+		unsigned long flags;
+		spin_lock_irqsave(&conf->device_lock, flags);
+		if (r1_bio->mddev->degraded == conf->raid_disks ||
+		    (r1_bio->mddev->degraded == conf->raid_disks-1 &&
+		     !test_bit(Faulty, &conf->mirrors[mirror].rdev->flags)))
+			uptodate = 1;
+		spin_unlock_irqrestore(&conf->device_lock, flags);
+	}
 
+	if (uptodate)
 		raid_end_bio_io(r1_bio);
-	} else {
+	else {
 		/*
 		 * oops, read error:
 		 */
@@ -992,13 +996,14 @@
 		unsigned long flags;
 		spin_lock_irqsave(&conf->device_lock, flags);
 		mddev->degraded++;
+		set_bit(Faulty, &rdev->flags);
 		spin_unlock_irqrestore(&conf->device_lock, flags);
 		/*
 		 * if recovery is running, make sure it aborts.
 		 */
 		set_bit(MD_RECOVERY_ERR, &mddev->recovery);
-	}
-	set_bit(Faulty, &rdev->flags);
+	} else
+		set_bit(Faulty, &rdev->flags);
 	set_bit(MD_CHANGE_DEVS, &mddev->flags);
 	printk(KERN_ALERT "raid1: Disk failure on %s, disabling device. \n"
 		"	Operation continuing on %d devices\n",