diff --git a/src/Makefile b/src/Makefile
index e55e830..48487aa 100644
--- a/src/Makefile
+++ b/src/Makefile
@@ -2259,6 +2259,7 @@
 	test_stat \
 	test_statusline \
 	test_substitute \
+	test_swap \
 	test_syn_attr \
 	test_syntax \
 	test_system \
diff --git a/src/fileio.c b/src/fileio.c
index 87b85cf..34dcdb6 100644
--- a/src/fileio.c
+++ b/src/fileio.c
@@ -716,7 +716,29 @@
 	/* Set swap file protection bits after creating it. */
 	if (swap_mode > 0 && curbuf->b_ml.ml_mfp != NULL
 			  && curbuf->b_ml.ml_mfp->mf_fname != NULL)
-	    (void)mch_setperm(curbuf->b_ml.ml_mfp->mf_fname, (long)swap_mode);
+	{
+	    char_u *swap_fname = curbuf->b_ml.ml_mfp->mf_fname;
+
+	    /*
+	     * If the group-read bit is set but not the world-read bit, then
+	     * the group must be equal to the group of the original file.  If
+	     * we can't make that happen then reset the group-read bit.  This
+	     * avoids making the swap file readable to more users when the
+	     * primary group of the user is too permissive.
+	     */
+	    if ((swap_mode & 044) == 040)
+	    {
+		stat_T	swap_st;
+
+		if (mch_stat((char *)swap_fname, &swap_st) >= 0
+			&& st.st_gid != swap_st.st_gid
+			&& fchown(curbuf->b_ml.ml_mfp->mf_fd, -1, st.st_gid)
+									 == -1)
+		    swap_mode &= 0600;
+	    }
+
+	    (void)mch_setperm(swap_fname, (long)swap_mode);
+	}
 #endif
     }
 
diff --git a/src/testdir/test_swap.vim b/src/testdir/test_swap.vim
index 245e1f1..d11c124 100644
--- a/src/testdir/test_swap.vim
+++ b/src/testdir/test_swap.vim
@@ -1,48 +1,82 @@
 " Tests for the swap feature
 
-" Tests for 'directory' option.
-func Test_swap_directory()
+"" Tests for 'directory' option.
+"func Test_swap_directory()
+"  if !has("unix")
+"    return
+"  endif
+"  let content = ['start of testfile',
+"	      \ 'line 2 Abcdefghij',
+"	      \ 'line 3 Abcdefghij',
+"	      \ 'end of testfile']
+"  call writefile(content, 'Xtest1')
+"
+"  "  '.', swap file in the same directory as file
+"  set dir=.,~
+"
+"  " Verify that the swap file doesn't exist in the current directory
+"  call assert_equal([], glob(".Xtest1*.swp", 1, 1, 1))
+"  edit Xtest1
+"  let swfname = split(execute("swapname"))[0]
+"  call assert_equal([swfname], glob(swfname, 1, 1, 1))
+"
+"  " './dir', swap file in a directory relative to the file
+"  set dir=./Xtest2,.,~
+"
+"  call mkdir("Xtest2")
+"  edit Xtest1
+"  call assert_equal([], glob(swfname, 1, 1, 1))
+"  let swfname = "Xtest2/Xtest1.swp"
+"  call assert_equal(swfname, split(execute("swapname"))[0])
+"  call assert_equal([swfname], glob("Xtest2/*", 1, 1, 1))
+"
+"  " 'dir', swap file in directory relative to the current dir
+"  set dir=Xtest.je,~
+"
+"  call mkdir("Xtest.je")
+"  call writefile(content, 'Xtest2/Xtest3')
+"  edit Xtest2/Xtest3
+"  call assert_equal(["Xtest2/Xtest3"], glob("Xtest2/*", 1, 1, 1))
+"  let swfname = "Xtest.je/Xtest3.swp"
+"  call assert_equal(swfname, split(execute("swapname"))[0])
+"  call assert_equal([swfname], glob("Xtest.je/*", 1, 1, 1))
+"
+"  set dir&
+"  call delete("Xtest1")
+"  call delete("Xtest2", "rf")
+"  call delete("Xtest.je", "rf")
+"endfunc
+
+func Test_swap_group()
   if !has("unix")
     return
   endif
-  let content = ['start of testfile',
-	      \ 'line 2 Abcdefghij',
-	      \ 'line 3 Abcdefghij',
-	      \ 'end of testfile']
-  call writefile(content, 'Xtest1')
+  let groups = split(system('groups'))
+  if len(groups) <= 1
+    throw 'Skipped: need at least two groups, got ' . groups
+  endif
 
-  "  '.', swap file in the same directory as file
-  set dir=.,~
+  call delete('Xtest')
+  split Xtest
+  call setline(1, 'just some text')
+  wq
+  if system('ls -l Xtest') !~ ' ' . groups[0] . ' \d'
+    throw 'Skipped: test file does not have the first group'
+  else
+    silent !chmod 640 Xtest
+    call system('chgrp ' . groups[1] . ' Xtest')
+    if system('ls -l Xtest') !~ ' ' . groups[1] . ' \d'
+      throw 'Skipped: cannot set second group on test file'
+    else
+      split Xtest
+      let swapname = substitute(execute('swapname'), '[[:space:]]', '', 'g')
+      call assert_match('Xtest', swapname)
+      " Group of swapfile must now match original file.
+      call assert_match(' ' . groups[1] . ' \d', system('ls -l ' . swapname))
 
-  " Verify that the swap file doesn't exist in the current directory
-  call assert_equal([], glob(".Xtest1*.swp", 1, 1, 1))
-  edit Xtest1
-  let swfname = split(execute("swapname"))[0]
-  call assert_equal([swfname], glob(swfname, 1, 1, 1))
+      bwipe!
+    endif
+  endif
 
-  " './dir', swap file in a directory relative to the file
-  set dir=./Xtest2,.,~
-
-  call mkdir("Xtest2")
-  edit Xtest1
-  call assert_equal([], glob(swfname, 1, 1, 1))
-  let swfname = "Xtest2/Xtest1.swp"
-  call assert_equal(swfname, split(execute("swapname"))[0])
-  call assert_equal([swfname], glob("Xtest2/*", 1, 1, 1))
-
-  " 'dir', swap file in directory relative to the current dir
-  set dir=Xtest.je,~
-
-  call mkdir("Xtest.je")
-  call writefile(content, 'Xtest2/Xtest3')
-  edit Xtest2/Xtest3
-  call assert_equal(["Xtest2/Xtest3"], glob("Xtest2/*", 1, 1, 1))
-  let swfname = "Xtest.je/Xtest3.swp"
-  call assert_equal(swfname, split(execute("swapname"))[0])
-  call assert_equal([swfname], glob("Xtest.je/*", 1, 1, 1))
-
-  set dir&
-  call delete("Xtest1")
-  call delete("Xtest2", "rf")
-  call delete("Xtest.je", "rf")
+  call delete('Xtest')
 endfunc
diff --git a/src/version.c b/src/version.c
index b7cb58b..2a2cefe 100644
--- a/src/version.c
+++ b/src/version.c
@@ -762,6 +762,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    1263,
+/**/
     1262,
 /**/
     1261,