diff --git a/gcc/cp/ChangeLog b/gcc/cp/ChangeLog
index c5e1ed18881..c03b7b7506c 100644
--- a/gcc/cp/ChangeLog
+++ b/gcc/cp/ChangeLog
@@ -1,3 +1,12 @@
+2002-10-03  Mark Mitchell  <mark@codesourcery.com>
+
+	PR c++/7754
+	* decl2.c (finish_anon_union): Do not expand anonymous unions when
+	procesing template functions.
+	* pt.c (tsubst_decl, case VAR_DECL): Try to complete the variable
+	type. Call layout_decl.
+	(tsubst_expr, case DECL_STMT): Handle anonymous unions.
+
 2002-10-07  Richard Henderson  <rth@redhat.com>
 
 	* decl2.c, pt.c: Revert c++/7754 fix.
diff --git a/gcc/cp/decl2.c b/gcc/cp/decl2.c
index 90a4d4a571b..c738b37896d 100644
--- a/gcc/cp/decl2.c
+++ b/gcc/cp/decl2.c
@@ -1382,26 +1382,31 @@ finish_anon_union (anon_union_decl)
       return;
     }
 
-  main_decl = build_anon_union_vars (anon_union_decl,
-				     &DECL_ANON_UNION_ELEMS (anon_union_decl),
-				     static_p, external_p);
-
-  if (main_decl == NULL_TREE)
+  if (!processing_template_decl)
     {
-      warning ("anonymous aggregate with no members");
-      return;
+      main_decl 
+	= build_anon_union_vars (anon_union_decl,
+				 &DECL_ANON_UNION_ELEMS (anon_union_decl),
+				 static_p, external_p);
+      
+      if (main_decl == NULL_TREE)
+	{
+	  warning ("anonymous aggregate with no members");
+	  return;
+	}
+
+      if (static_p)
+	{
+	  make_decl_rtl (main_decl, 0);
+	  COPY_DECL_RTL (main_decl, anon_union_decl);
+	  expand_anon_union_decl (anon_union_decl, 
+				  NULL_TREE,
+				  DECL_ANON_UNION_ELEMS (anon_union_decl));
+	  return;
+	}
     }
 
-  if (static_p)
-    {
-      make_decl_rtl (main_decl, 0);
-      COPY_DECL_RTL (main_decl, anon_union_decl);
-      expand_anon_union_decl (anon_union_decl, 
-			      NULL_TREE,
-			      DECL_ANON_UNION_ELEMS (anon_union_decl));
-    }
-  else
-    add_decl_stmt (anon_union_decl);
+  add_decl_stmt (anon_union_decl);
 }
 
 /* Finish processing a builtin type TYPE.  It's name is NAME,
diff --git a/gcc/cp/pt.c b/gcc/cp/pt.c
index aec77d92ce0..46d91abd301 100644
--- a/gcc/cp/pt.c
+++ b/gcc/cp/pt.c
@@ -6134,6 +6134,8 @@ tsubst_decl (t, args, type, complain)
 	  }
 
 	r = copy_decl (t);
+	if (TREE_CODE (r) == VAR_DECL)
+	  type = complete_type (type);
 	TREE_TYPE (r) = type;
 	c_apply_type_quals_to_decl (cp_type_quals (type), r);
 	DECL_CONTEXT (r) = ctx;
@@ -6173,6 +6175,8 @@ tsubst_decl (t, args, type, complain)
 	TREE_CHAIN (r) = NULL_TREE;
 	if (TREE_CODE (r) == VAR_DECL && VOID_TYPE_P (type))
 	  cp_error_at ("instantiation of `%D' as type `%T'", r, type);
+	/* Compute the size, alignment, etc. of R.  */
+	layout_decl (r, 0);
       }
       break;
 
@@ -7424,9 +7428,6 @@ tsubst_expr (t, args, complain, in_decl)
 	    decl = tsubst (decl, args, complain, in_decl);
 	    if (decl != error_mark_node)
 	      {
-                if (TREE_CODE (decl) != TYPE_DECL)
-                  /* Make sure the type is instantiated now.  */
-                  complete_type (TREE_TYPE (decl));
 	        if (init)
 	          DECL_INITIAL (decl) = error_mark_node;
 	        /* By marking the declaration as instantiated, we avoid
@@ -7436,19 +7437,26 @@ tsubst_expr (t, args, complain, in_decl)
 	           do.  */
 	        if (TREE_CODE (decl) == VAR_DECL)
 	          DECL_TEMPLATE_INSTANTIATED (decl) = 1;
-	        maybe_push_decl (decl);
-		if (DECL_PRETTY_FUNCTION_P (decl))
+		if (TREE_CODE (decl) == VAR_DECL
+		    && ANON_AGGR_TYPE_P (TREE_TYPE (decl)))
+		  /* Anonymous aggregates are a special case.  */
+		  finish_anon_union (decl);
+		else 
 		  {
-		    /* For __PRETTY_FUNCTION__ we have to adjust the
-		       initializer.  */
-		    const char *const name
-		      = cxx_printable_name (current_function_decl, 2);
-		    init = cp_fname_init (name);
-		    TREE_TYPE (decl) = TREE_TYPE (init);
+		    maybe_push_decl (decl);
+		    if (DECL_PRETTY_FUNCTION_P (decl))
+		      {
+			/* For __PRETTY_FUNCTION__ we have to adjust the
+			   initializer.  */
+			const char *const name
+			  = cxx_printable_name (current_function_decl, 2);
+			init = cp_fname_init (name);
+			TREE_TYPE (decl) = TREE_TYPE (init);
+		      }
+		    else
+		      init = tsubst_expr (init, args, complain, in_decl);
+		    cp_finish_decl (decl, init, NULL_TREE, 0);
 		  }
-		else
-		  init = tsubst_expr (init, args, complain, in_decl);
-	        cp_finish_decl (decl, init, NULL_TREE, 0);
 	      }
 	  }