diff --git a/findutils/xargs.c b/findutils/xargs.c
index 4fb306bb8..ff04bfe7c 100644
--- a/findutils/xargs.c
+++ b/findutils/xargs.c
@@ -315,6 +315,7 @@ static char* FAST_FUNC process_stdin(int n_max_chars, int n_max_arg, char *buf)
 			}
 		}
 		if (state == SPACE) {   /* word's delimiter or EOF detected */
+			state = NORM;
 			if (q) {
 				bb_error_msg_and_die("unmatched %s quote",
 					q == '\'' ? "single" : "double");
@@ -335,7 +336,6 @@ static char* FAST_FUNC process_stdin(int n_max_chars, int n_max_arg, char *buf)
 			if (n_max_arg == 0) {
 				goto ret;
 			}
-			state = NORM;
 		}
 		if (p == buf) {
 			goto ret;
diff --git a/testsuite/xargs.tests b/testsuite/xargs.tests
index 855b33bc2..159f1ff69 100755
--- a/testsuite/xargs.tests
+++ b/testsuite/xargs.tests
@@ -48,6 +48,17 @@ testing "xargs argument line too long" \
 	"seq 10000 99999 | sed -e 's/^/\"/' -e 's/$/\"/' | xargs echo | grep -o 99999; echo \$?" \
 	"99999\n0\n" \
 	"" ""
+
+testing "xargs -n1" \
+	"xargs -n1 echo" \
+	"1\n2\n3\n4\n5\n" \
+	"" "1 2 3 4 5\n"
+
+testing "xargs -n2" \
+	"xargs -n2 echo" \
+	"1 2\n3 4\n5\n" \
+	"" "1 2 3 4 5\n"
+
 SKIP=
 
 exit $FAILCOUNT