diff --git a/lib/Sema/Sema.h b/lib/Sema/Sema.h
index 24480fe..3bea485 100644
--- a/lib/Sema/Sema.h
+++ b/lib/Sema/Sema.h
@@ -1761,7 +1761,8 @@
   /// DiagnoseUnusedExprResult - If the statement passed in is an expression
   /// whose result is unused, warn.
   void DiagnoseUnusedExprResult(const Stmt *S);
-
+  void DiagnoseUnusedDecl(const NamedDecl *ND);
+  
   ParsingDeclStackState PushParsingDeclaration();
   void PopParsingDeclaration(ParsingDeclStackState S, DeclPtrTy D);
   void EmitDeprecationWarning(NamedDecl *D, SourceLocation Loc);
diff --git a/lib/Sema/SemaDecl.cpp b/lib/Sema/SemaDecl.cpp
index bf3c172..40ba8ff 100644
--- a/lib/Sema/SemaDecl.cpp
+++ b/lib/Sema/SemaDecl.cpp
@@ -544,9 +544,9 @@
         return false;
     }
 
-    // If we failed to complete the type for some reason, don't
-    // diagnose the variable.
-    if (Ty->isIncompleteType())
+    // If we failed to complete the type for some reason, or if the type is
+    // dependent, don't diagnose the variable. 
+    if (Ty->isIncompleteType() || Ty->isDependentType())
       return false;
 
     if (const TagType *TT = Ty->getAs<TagType>()) {
@@ -555,9 +555,10 @@
         return false;
 
       if (const CXXRecordDecl *RD = dyn_cast<CXXRecordDecl>(Tag)) {
-        if (!RD->hasTrivialConstructor())
-          return false;
-        if (!RD->hasTrivialDestructor())
+        // FIXME: Checking for the presence of a user-declared constructor
+        // isn't completely accurate; we'd prefer to check that the initializer
+        // has no side effects.
+        if (RD->hasUserDeclaredConstructor() || !RD->hasTrivialDestructor())
           return false;
       }
     }
@@ -568,6 +569,18 @@
   return true;
 }
 
+void Sema::DiagnoseUnusedDecl(const NamedDecl *D) {
+  if (!ShouldDiagnoseUnusedDecl(D))
+    return;
+  
+  if (isa<VarDecl>(D) && cast<VarDecl>(D)->isExceptionVariable())
+    Diag(D->getLocation(), diag::warn_unused_exception_param)
+    << D->getDeclName();
+  else
+    Diag(D->getLocation(), diag::warn_unused_variable) 
+    << D->getDeclName();
+}
+
 void Sema::ActOnPopScope(SourceLocation Loc, Scope *S) {
   if (S->decl_empty()) return;
   assert((S->getFlags() & (Scope::DeclScope | Scope::TemplateParamScope)) &&
@@ -584,15 +597,9 @@
     if (!D->getDeclName()) continue;
 
     // Diagnose unused variables in this scope.
-    if (ShouldDiagnoseUnusedDecl(D) && 
-        S->getNumErrorsAtStart() == getDiagnostics().getNumErrors()) {
-      if (isa<VarDecl>(D) && cast<VarDecl>(D)->isExceptionVariable())
-        Diag(D->getLocation(), diag::warn_unused_exception_param)
-          << D->getDeclName();
-      else
-        Diag(D->getLocation(), diag::warn_unused_variable) 
-          << D->getDeclName();
-    }
+    if (S->getNumErrorsAtStart() == getDiagnostics().getNumErrors())
+      DiagnoseUnusedDecl(D);
+    
     // Remove this name from our lexical scope.
     IdResolver.RemoveDecl(D);
   }
diff --git a/lib/Sema/SemaTemplateInstantiateDecl.cpp b/lib/Sema/SemaTemplateInstantiateDecl.cpp
index a32c0e1..d3d6c22 100644
--- a/lib/Sema/SemaTemplateInstantiateDecl.cpp
+++ b/lib/Sema/SemaTemplateInstantiateDecl.cpp
@@ -351,7 +351,8 @@
     Var->setLexicalDeclContext(D->getLexicalDeclContext());
 
   Var->setAccess(D->getAccess());
-
+  Var->setUsed(D->isUsed());
+  
   // FIXME: In theory, we could have a previous declaration for variables that
   // are not static data members.
   bool Redeclaration = false;
@@ -419,6 +420,10 @@
   } else if (!Var->isStaticDataMember() || Var->isOutOfLine())
     SemaRef.ActOnUninitializedDecl(Sema::DeclPtrTy::make(Var), false);
 
+  // Diagnose unused local variables.
+  if (!Var->isInvalidDecl() && Owner->isFunctionOrMethod() && !Var->isUsed())
+    SemaRef.DiagnoseUnusedDecl(Var);
+  
   return Var;
 }
 
diff --git a/test/SemaTemplate/unused-variables.cpp b/test/SemaTemplate/unused-variables.cpp
new file mode 100644
index 0000000..1b9350b
--- /dev/null
+++ b/test/SemaTemplate/unused-variables.cpp
@@ -0,0 +1,21 @@
+// RUN: %clang_cc1 -fsyntax-only -Wunused -verify %s
+
+struct X0 {
+  ~X0();
+};
+
+struct X1 { };
+
+template<typename T>
+void f() {
+  X0 x0;
+  X1 x1; // expected-warning{{unused variable 'x1'}}
+}
+
+template<typename T, typename U>
+void g() {
+  T t;
+  U u; // expected-warning{{unused variable 'u'}}
+}
+
+template void g<X0, X1>(); // expected-note{{in instantiation of}}