Index: Lib/test/test_threading.py
===================================================================
--- Lib/test/test_threading.py	(revision 66142)
+++ Lib/test/test_threading.py	(working copy)
@@ -438,10 +438,61 @@
         self.assertRaises(RuntimeError, setattr, thread, "daemon", True)
 
 
+# This test came from Ben Cottrell in http://bugs.python.org/issue1868
+class TestThreadingLocal(unittest.TestCase):
+    def setUp(self):
+        self._failed = "No error message set or cleared."
+
+    def _test_one_class(self, c):
+        obj = c()
+        e1 = threading.Event()
+        e2 = threading.Event()
+
+        def f1():
+            obj.x = 'foo'
+            obj.y = 'bar'
+            del obj.y
+            e1.set()
+            e2.wait()
+
+        def f2():
+            try:
+                foo = obj.x
+            except AttributeError:
+                # This is expected -- we haven't set obj.x in this thread yet!
+                self._failed = ""  # passed
+            else:
+                self._failed = ('Incorrectly got value %r from class %r\n' %
+                                (foo, c))
+                sys.stderr.write(self._failed)
+
+        t1 = threading.Thread(target=f1)
+        t1.start()
+        e1.wait()
+        t2 = threading.Thread(target=f2)
+        t2.start()
+        t2.join()
+
+        # The test is done; just let t1 know it can exit, and wait for it.
+        e2.set()
+        t1.join()
+
+    def test_threading_local(self):
+        self._test_one_class(threading.local)
+        self.assert_(not self._failed, self._failed)
+
+    def test_threading_local_subclass(self):
+        class LocalSubclass(threading.local):
+            """To test that subclasses behave properly."""
+        self._test_one_class(LocalSubclass)
+        self.assert_(not self._failed, self._failed)
+
+
 def test_main():
     test.test_support.run_unittest(ThreadTests,
                                    ThreadJoinOnShutdown,
                                    ThreadingExceptionTests,
+                                   TestThreadingLocal,
                                    )
 
 if __name__ == "__main__":
Index: Modules/threadmodule.c
===================================================================
--- Modules/threadmodule.c	(revision 66142)
+++ Modules/threadmodule.c	(working copy)
@@ -164,7 +164,6 @@
 	PyObject *key;
 	PyObject *args;
 	PyObject *kw;
-	PyObject *dict;
 } localobject;
 
 static PyObject *
@@ -172,6 +171,7 @@
 {
 	localobject *self;
 	PyObject *tdict;
+	PyObject *localdict;
 
 	if (type->tp_init == PyBaseObject_Type.tp_init
 	    && ((args && PyObject_IsTrue(args))
@@ -189,13 +189,12 @@
 	self->args = args;
 	Py_XINCREF(kw);
 	self->kw = kw;
-	self->dict = NULL;	/* making sure */
 	self->key = PyString_FromFormat("thread.local.%p", self);
 	if (self->key == NULL) 
 		goto err;
 
-	self->dict = PyDict_New();
-	if (self->dict == NULL)
+	localdict = PyDict_New();
+	if (localdict == NULL)
 		goto err;
 
 	tdict = PyThreadState_GetDict();
@@ -205,8 +204,11 @@
 		goto err;
 	}
 
-	if (PyDict_SetItem(tdict, self->key, self->dict) < 0)
+	if (PyDict_SetItem(tdict, self->key, localdict) < 0) {
+		Py_DECREF(localdict);
 		goto err;
+	}
+	Py_DECREF(localdict);
 
 	return (PyObject *)self;
 
@@ -220,7 +222,6 @@
 {
 	Py_VISIT(self->args);
 	Py_VISIT(self->kw);
-	Py_VISIT(self->dict);
 	return 0;
 }
 
@@ -230,7 +231,6 @@
 	Py_CLEAR(self->key);
 	Py_CLEAR(self->args);
 	Py_CLEAR(self->kw);
-	Py_CLEAR(self->dict);
 	return 0;
 }
 
@@ -253,6 +253,7 @@
 	Py_TYPE(self)->tp_free((PyObject*)self);
 }
 
+/* Return borrowed reference to the local dict */
 static PyObject *
 _ldict(localobject *self)
 {
@@ -278,10 +279,6 @@
 				return NULL;
 		}
 
-		Py_CLEAR(self->dict);
-		Py_INCREF(ldict);
-		self->dict = ldict; /* still borrowed */
-
 		if (Py_TYPE(self)->tp_init != PyBaseObject_Type.tp_init &&
 		    Py_TYPE(self)->tp_init((PyObject*)self, 
 					   self->args, self->kw) < 0) {
@@ -294,39 +291,39 @@
 		
 	}
 
-	/* The call to tp_init above may have caused another thread to run.
-	   Install our ldict again. */
-	if (self->dict != ldict) {
-		Py_CLEAR(self->dict);
-		Py_INCREF(ldict);
-		self->dict = ldict;
-	}
-
 	return ldict;
 }
 
 static int
 local_setattro(localobject *self, PyObject *name, PyObject *v)
 {
-	PyObject *ldict;
-	
-	ldict = _ldict(self);
+	PyObject *ldict = _ldict(self);
 	if (ldict == NULL) 
 		return -1;
 
-	return PyObject_GenericSetAttr((PyObject *)self, name, v);
+	if (v != NULL) {
+		return PyDict_SetItem(ldict, name, v);
+	} else {
+		int res;
+		res = PyDict_DelItem(ldict, name);
+		if ((res < 0) && PyErr_ExceptionMatches(PyExc_KeyError)) {
+			PyErr_SetObject(PyExc_AttributeError, name);
+		}
+		return res;
+	}
 }
 
 static PyObject *
 local_getdict(localobject *self, void *closure)
 {
-	if (self->dict == NULL) {
+	PyObject *ldict = _ldict(self);
+	if (ldict == NULL) {
 		PyErr_SetString(PyExc_AttributeError, "__dict__");
 		return NULL;
 	}
 
-	Py_INCREF(self->dict);
-	return self->dict;
+	Py_INCREF(ldict);
+	return ldict;
 }
 
 static PyGetSetDef local_getset[] = {
@@ -372,7 +369,7 @@
 	/* tp_dict           */ 0, /* internal use */
 	/* tp_descr_get      */ 0,
 	/* tp_descr_set      */ 0,
-	/* tp_dictoffset     */ offsetof(localobject, dict),
+	/* tp_dictoffset     */ 0,
 	/* tp_init           */ 0,
 	/* tp_alloc          */ 0,
 	/* tp_new            */ local_new,
@@ -389,10 +386,6 @@
 	if (ldict == NULL) 
 		return NULL;
 
-	if (Py_TYPE(self) != &localtype)
-		/* use generic lookup for subtypes */
-		return PyObject_GenericGetAttr((PyObject *)self, name);
-
 	/* Optimization: just look in dict ourselves */
 	value = PyDict_GetItem(ldict, name);
 	if (value == NULL)