diff --git a/lib/compress.js b/lib/compress.js
index c7c1e5cf..3cd632c2 100644
--- a/lib/compress.js
+++ b/lib/compress.js
@@ -3166,47 +3166,45 @@ Compressor.prototype.compress = function(node) {
                     return;
                 }
                 var end = hit_stack.length - 1;
-                if (hit_stack[end - 1].body === hit_stack[end]) end--;
+                var last = hit_stack[end];
+                if (last instanceof AST_VarDef || hit_stack[end - 1].body === last) end--;
                 var tt = new TreeTransformer(function(node, descend, in_list) {
                     if (hit) return node;
                     if (node !== hit_stack[hit_index]) return node;
                     hit_index++;
                     if (hit_index <= end) return handle_custom_scan_order(node, tt);
                     hit = true;
-                    if (node instanceof AST_VarDef) {
-                        declare_only.set(node.name.name, (declare_only.get(node.name.name) || 0) + 1);
+                    if (node instanceof AST_Definitions) {
+                        declare_only.set(last.name.name, (declare_only.get(last.name.name) || 0) + 1);
                         if (value_def) value_def.replaced++;
-                        node = node.clone();
-                        node.value = null;
-                        return value ? List.splice([ value, node ]) : node;
+                        var defns = node.definitions;
+                        var index = defns.indexOf(last);
+                        var defn = last.clone();
+                        defn.value = null;
+                        if (!value) {
+                            node = node.clone();
+                            node.definitions = defns.slice();
+                            node.definitions[index] = defn;
+                            return node;
+                        }
+                        var body = [
+                            make_node(AST_SimpleStatement, value, { body: value }),
+                            node.clone(),
+                        ];
+                        body[1].definitions = defns.slice(index);
+                        body[1].definitions[0] = defn;
+                        if (index > 0) {
+                            node = node.clone();
+                            node.definitions = defns.slice(0, index);
+                            body.unshift(node);
+                        }
+                        return in_list ? List.splice(body) : make_node(AST_BlockStatement, node, { body: body });
                     }
                     if (!value) return in_list ? List.skip : null;
                     return is_statement(node) ? make_node(AST_SimpleStatement, value, { body: value }) : value;
                 }, function(node, in_list) {
-                    if (node instanceof AST_Definitions) {
-                        var body = [], defns = node.definitions;
-                        for (var index = 0, pos = 0; index < defns.length; index++) {
-                            var defn = defns[index];
-                            if (defn instanceof AST_VarDef) continue;
-                            flush();
-                            pos = index + 1;
-                            body.push(make_node(AST_SimpleStatement, defn, { body: defn }));
-                        }
-                        if (pos == 0) return;
-                        flush();
-                        if (body.length == 1) return body[0];
-                        return in_list ? List.splice(body) : make_node(AST_BlockStatement, node, { body: body });
-                    }
                     if (node instanceof AST_For) return patch_for_init(node, in_list);
-                    return patch_sequence(node, this);
-
-                    function flush() {
-                        if (pos < index) {
-                            var cropped = node.clone();
-                            cropped.definitions = defns.slice(pos, index);
-                            body.push(cropped);
-                        }
-                    }
+                    return patch_sequence(node, tt);
                 });
                 abort = false;
                 hit = false;
diff --git a/test/compress/collapse_vars.js b/test/compress/collapse_vars.js
index 379d8cb6..b16450d7 100644
--- a/test/compress/collapse_vars.js
+++ b/test/compress/collapse_vars.js
@@ -9947,3 +9947,35 @@ issue_5394: {
     }
     expect_stdout: "object"
 }
+
+issue_5396: {
+    options = {
+        collapse_vars: true,
+        merge_vars: true,
+        reduce_vars: true,
+        side_effects: true,
+        unused: true,
+    }
+    input: {
+        var a, b;
+        function f() {}
+        b = 0;
+        new function g(c) {
+            var d = a && g(e), e = ++d, i = [ 42 ];
+            for (var j in i)
+                console.log("PASS"),
+                i;
+        }();
+    }
+    expect: {
+        var a, b;
+        function f() {}
+        b = 0;
+        (function g(c) {
+            a && g();
+            for (var j in [ 42 ])
+                console.log("PASS");
+        })();
+    }
+    expect_stdout: "PASS"
+}