diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 048a30898060..16661d340b2d 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2004-06-26  Bud Davis  <bdavis9659@comcast.net>
+
+	PR gfortran/pr16196
+	* gfortran.fortran-torture/execute/open_replace.f90: New test case.
+
 2004-06-25  Roger Sayle  <roger@eyesopen.com>
 
 	PR middle-end/15825
diff --git a/gcc/testsuite/gfortran.fortran-torture/execute/open_replace.f90 b/gcc/testsuite/gfortran.fortran-torture/execute/open_replace.f90
new file mode 100644
index 000000000000..1d8ac4ba7870
--- /dev/null
+++ b/gcc/testsuite/gfortran.fortran-torture/execute/open_replace.f90
@@ -0,0 +1,5 @@
+! pr 16196
+! open with 'REPLACE' creates the file if it does not exist.
+      PROGRAM iobug
+      OPEN(UNIT=10,FILE='gfcoutput.txt',status='REPLACE')
+      END PROGRAM iobug
diff --git a/libgfortran/ChangeLog b/libgfortran/ChangeLog
index 3422af9884da..b1babff4f6da 100644
--- a/libgfortran/ChangeLog
+++ b/libgfortran/ChangeLog
@@ -1,3 +1,8 @@
+2004-06-26  Bud Davis  <bdavis9659@comcast.net>
+
+	PR gfortran/16196
+	* unix.c(regular_file): create file if it does not exist.
+
 2004-06-24  Andrew Pinski  <apinski@apple.com>
 
 	* configure.ac: Remove check for libmx.
diff --git a/libgfortran/io/unix.c b/libgfortran/io/unix.c
index fc25395ca5b0..0800447ba2e4 100644
--- a/libgfortran/io/unix.c
+++ b/libgfortran/io/unix.c
@@ -982,7 +982,7 @@ regular_file (unit_action action, unit_status status)
       break;
 
     case STATUS_REPLACE:
-      mode |= O_TRUNC;
+        mode |= O_CREAT | O_TRUNC;
       break;
 
     default: