diff --git a/src/Expr.cc b/src/Expr.cc
index dc47340ccd..cc93c47be0 100644
--- a/src/Expr.cc
+++ b/src/Expr.cc
@@ -3971,12 +3971,18 @@ RecordCoerceExpr::RecordCoerceExpr(Expr* op, RecordType* r)
 
 			if ( ! same_type(sup_t_i, sub_t_i) )
 				{
-				char buf[512];
-				safe_snprintf(buf, sizeof(buf),
-					      "type clash for field \"%s\"", sub_r->FieldName(i));
-				Error(buf, sub_t_i);
-				SetError();
-				break;
+				if ( sup_t_i->Tag() != TYPE_RECORD ||
+				     sub_t_i->Tag() != TYPE_RECORD ||
+				     ! record_promotion_compatible(sup_t_i->AsRecordType(),
+				                                   sub_t_i->AsRecordType()) )
+					{
+					char buf[512];
+					safe_snprintf(buf, sizeof(buf),
+						"type clash for field \"%s\"", sub_r->FieldName(i));
+					Error(buf, sub_t_i);
+					SetError();
+					break;
+					}
 				}
 
 			map[t_i] = i;
@@ -4024,6 +4030,24 @@ Val* RecordCoerceExpr::Fold(Val* v) const
 				rhs = rhs->Ref();
 
 			assert(rhs || Type()->AsRecordType()->FieldDecl(i)->FindAttr(ATTR_OPTIONAL));
+
+			BroType* rhs_type = rhs->Type();
+			RecordType* val_type = val->Type()->AsRecordType();
+			BroType* field_type = val_type->FieldType(i);
+
+			if ( rhs_type->Tag() == TYPE_RECORD &&
+			     field_type->Tag() == TYPE_RECORD &&
+			     ! same_type(rhs_type, field_type) )
+				{
+				Val* new_val = rhs->AsRecordVal()->CoerceTo(
+				    field_type->AsRecordType());
+				if ( new_val )
+					{
+					Unref(rhs);
+					rhs = new_val;
+					}
+				}
+
 			val->Assign(i, rhs);
 			}
 		else
diff --git a/testing/btest/Baseline/language.record-recursive-coercion/output b/testing/btest/Baseline/language.record-recursive-coercion/output
index 37c916713f..5c4dea621c 100644
--- a/testing/btest/Baseline/language.record-recursive-coercion/output
+++ b/testing/btest/Baseline/language.record-recursive-coercion/output
@@ -1 +1,2 @@
 [major=4, minor=4, minor2=<uninitialized>, addl=<uninitialized>]
+[c=1, f=[i=2.0 hrs, s=<uninitialized>]]
diff --git a/testing/btest/language/record-recursive-coercion.bro b/testing/btest/language/record-recursive-coercion.bro
index eda80e3d11..ad9e41bd3a 100644
--- a/testing/btest/language/record-recursive-coercion.bro
+++ b/testing/btest/language/record-recursive-coercion.bro
@@ -1,4 +1,4 @@
-# @TEST-EXEC: bro %INPUT >output 2>&1
+# @TEST-EXEC: bro %INPUT >output
 # @TEST-EXEC: btest-diff output
 
 type Version: record {
@@ -17,8 +17,24 @@ global matched_software: table[string] of Info = {
         ["OpenSSH_4.4"] = [$name="OpenSSH", $version=[$major=4,$minor=4]],
 };
 
+type Foo: record {
+        i: interval &default=1hr;
+        s: string &optional;
+};
+
+type FooContainer: record {
+        c: count;
+        f: Foo &optional;
+};
+
+function foo_func(fc: FooContainer)
+        {
+        print fc;
+        }
+
 event bro_init()
         {
         for ( sw in matched_software )
                 print matched_software[sw]$version;
+        foo_func([$c=1, $f=[$i=2hrs]]);
         }