diff --git a/winsup/cygwin/ChangeLog b/winsup/cygwin/ChangeLog
index b1f5b1cee..1c27b8cf5 100644
--- a/winsup/cygwin/ChangeLog
+++ b/winsup/cygwin/ChangeLog
@@ -1,3 +1,8 @@
+2006-12-05  Corinna Vinschen  <corinna@vinschen.de>
+
+	* path.cc (cwdstuff::init): Don't change to windows_system_directory
+	if Cygwin DLL has been loaded dynamically.
+
 2006-12-05  Corinna Vinschen  <corinna@vinschen.de>
 
 	* path.cc (cwdstuff::set): Don't try to open directory on systems not
diff --git a/winsup/cygwin/path.cc b/winsup/cygwin/path.cc
index 9d1cb730e..b415a30dc 100644
--- a/winsup/cygwin/path.cc
+++ b/winsup/cygwin/path.cc
@@ -4154,12 +4154,16 @@ cwdstuff::get_hash ()
 void
 cwdstuff::init ()
 {
+  extern int dynamically_loaded;
   cwd_lock.init ("cwd_lock");
   get_initial ();
-  /* Actually chdir into the syste dir to avoid cwd problems.  See comment
-     in cwdstuff::set below. */
-  extern char windows_system_directory[];
-  SetCurrentDirectory (windows_system_directory);
+  if (!dynamically_loaded)
+    {
+      /* Actually chdir into the syste dir to avoid cwd problems.  See comment
+	 in cwdstuff::set below. */
+      extern char windows_system_directory[];
+      SetCurrentDirectory (windows_system_directory);
+    }
   cwd_lock.release ();
 }