Index: Lib/pdb.py
===================================================================
--- Lib/pdb.py	(revision 84373)
+++ Lib/pdb.py	(working copy)
@@ -188,6 +188,7 @@
     def forget(self):
         self.lineno = None
         self.stack = []
+        self.frame_locals = []
         self.curindex = 0
         self.curframe = None
         self.tb_lineno.clear()
@@ -205,7 +206,11 @@
         self.curframe = self.stack[self.curindex][0]
         # The f_locals dictionary is updated from the actual frame
         # locals whenever the .f_locals accessor is called, so we
-        # cache it here to ensure that modifications are not overwritten.
+        # cache all of the frame locals here to ensure that modifications 
+        # are not overwritten.  Note that we have to cache all of them so
+        # that we can switch frames properly with the 'up and 'down' commands.
+        self.frame_locals = [stack_entry[0].f_locals
+                                for stack_entry in self.stack]
         self.curframe_locals = self.curframe.f_locals
         return self.execRcLines()
 
@@ -266,7 +271,8 @@
                 self.onecmd(line)
             self.lastcmd = lastcmd_back
             if not self.commands_silent[currentbp]:
-                self.print_stack_entry(self.stack[self.curindex])
+                self.print_stack_entry(frame_lineno = self.stack[self.curindex],
+                                       locals = self.frame_locals[self.curindex])
             if self.commands_doprompt[currentbp]:
                 self.cmdloop()
             self.forget()
@@ -300,7 +306,8 @@
             # a command like "continue")
             self.forget()
             return
-        self.print_stack_entry(self.stack[self.curindex])
+        self.print_stack_entry(frame_lineno = self.stack[self.curindex],
+                               locals = self.frame_locals[self.curindex])
         self.cmdloop()
         self.forget()
 
@@ -800,8 +807,9 @@
         assert 0 <= number < len(self.stack)
         self.curindex = number
         self.curframe = self.stack[self.curindex][0]
-        self.curframe_locals = self.curframe.f_locals
-        self.print_stack_entry(self.stack[self.curindex])
+        self.curframe_locals = self.frame_locals[self.curindex]
+        self.print_stack_entry(frame_lineno = self.stack[self.curindex],
+                               locals = self.frame_locals[self.curindex])
         self.lineno = None
 
     def do_up(self, arg):
@@ -944,7 +952,8 @@
                 # new position
                 self.curframe.f_lineno = arg
                 self.stack[self.curindex] = self.stack[self.curindex][0], arg
-                self.print_stack_entry(self.stack[self.curindex])
+                self.print_stack_entry(frame_lineno = self.stack[self.curindex],
+                                       locals = self.frame_locals[self.curindex])
             except ValueError as e:
                 self.error('Jump failed: %s' % e)
     do_j = do_jump
@@ -1238,14 +1247,16 @@
         except KeyboardInterrupt:
             pass
 
-    def print_stack_entry(self, frame_lineno, prompt_prefix=line_prefix):
+    def print_stack_entry(self, frame_lineno, prompt_prefix=line_prefix, 
+                          locals=None):
         frame, lineno = frame_lineno
         if frame is self.curframe:
             prefix = '> '
         else:
             prefix = '  '
         self.message(prefix +
-                     self.format_stack_entry(frame_lineno, prompt_prefix))
+                     self.format_stack_entry(frame_lineno, prompt_prefix,
+                                             locals))
 
     # Provide help
 
Index: Lib/bdb.py
===================================================================
--- Lib/bdb.py	(revision 84373)
+++ Lib/bdb.py	(working copy)
@@ -352,25 +352,27 @@
 
     #
 
-    def format_stack_entry(self, frame_lineno, lprefix=': '):
+    def format_stack_entry(self, frame_lineno, lprefix=': ', locals=None):
         import linecache, reprlib
         frame, lineno = frame_lineno
         filename = self.canonic(frame.f_code.co_filename)
         s = '%s(%r)' % (filename, lineno)
+        if not locals:
+            locals = frame.f_locals
         if frame.f_code.co_name:
             s = s + frame.f_code.co_name
         else:
             s = s + "<lambda>"
-        if '__args__' in frame.f_locals:
-            args = frame.f_locals['__args__']
+        if '__args__' in locals:
+            args = locals['__args__']
         else:
             args = None
         if args:
             s = s + reprlib.repr(args)
         else:
             s = s + '()'
-        if '__return__' in frame.f_locals:
-            rv = frame.f_locals['__return__']
+        if '__return__' in locals:
+            rv = locals['__return__']
             s = s + '->'
             s = s + reprlib.repr(rv)
         line = linecache.getline(filename, lineno, frame.f_globals)
Index: Lib/test/test_pdb.py
===================================================================
--- Lib/test/test_pdb.py	(revision 84373)
+++ Lib/test/test_pdb.py	(working copy)
@@ -578,6 +578,46 @@
     """
 
 
+def test_pdb_set_frame_locals():
+    """This tests setting local variables in the current stack frame.
+
+    >>> def foo(n):
+    ...     x = n
+    ...     bar(x)
+    >>> def bar(n):
+    ...     y = n + 1
+    ...     import pdb; pdb.Pdb().set_trace()
+    ...     print(y)
+
+    >>> with PdbTestInput([
+    ...     'y',
+    ...     '!y = 42',
+    ...     'y',
+    ...     'u',
+    ...     'd',
+    ...     'y',
+    ...     'continue'
+    ... ]):
+    ...      foo(1)
+    > <doctest test.test_pdb.test_pdb_set_frame_locals[1]>(4)bar()
+    -> print(y)
+    (Pdb) y
+    2
+    (Pdb) !y = 42
+    (Pdb) y
+    42
+    (Pdb) u
+    > <doctest test.test_pdb.test_pdb_set_frame_locals[0]>(3)foo()
+    -> bar(x)
+    (Pdb) d
+    > <doctest test.test_pdb.test_pdb_set_frame_locals[1]>(4)bar()
+    -> print(y)
+    (Pdb) y
+    42
+    (Pdb) continue
+    42
+    """
+
 class PdbTestCase(unittest.TestCase):
 
     def test_issue7964(self):