diff --git a/gcc/fortran/simplify.cc b/gcc/fortran/simplify.cc
index 9c2fea8c5f226726865c4f098770f21b678e9500..b6184181f26a090c4c5a306571f2c6028fd2d39c 100644
--- a/gcc/fortran/simplify.cc
+++ b/gcc/fortran/simplify.cc
@@ -4913,7 +4913,22 @@ gfc_simplify_merge (gfc_expr *tsource, gfc_expr *fsource, gfc_expr *mask)
 
   if (mask->expr_type == EXPR_CONSTANT)
     {
-      result = gfc_copy_expr (mask->value.logical ? tsource : fsource);
+      /* The standard requires evaluation of all function arguments.
+	 Simplify only when the other dropped argument (FSOURCE or TSOURCE)
+	 is a constant expression.  */
+      if (mask->value.logical)
+	{
+	  if (!gfc_is_constant_expr (fsource))
+	    return NULL;
+	  result = gfc_copy_expr (tsource);
+	}
+      else
+	{
+	  if (!gfc_is_constant_expr (tsource))
+	    return NULL;
+	  result = gfc_copy_expr (fsource);
+	}
+
       /* Parenthesis is needed to get lower bounds of 1.  */
       result = gfc_get_parentheses (result);
       gfc_simplify_expr (result, 1);
diff --git a/gcc/fortran/trans-intrinsic.cc b/gcc/fortran/trans-intrinsic.cc
index bb938026828be28125df5d92f9b3a07f561c6e25..93426981bac6ecdca8381285fe6665524ad00524 100644
--- a/gcc/fortran/trans-intrinsic.cc
+++ b/gcc/fortran/trans-intrinsic.cc
@@ -7557,6 +7557,9 @@ gfc_conv_intrinsic_merge (gfc_se * se, gfc_expr * expr)
 				   &se->pre);
       se->string_length = len;
     }
+  tsource = gfc_evaluate_now (tsource, &se->pre);
+  fsource = gfc_evaluate_now (fsource, &se->pre);
+  mask = gfc_evaluate_now (mask, &se->pre);
   type = TREE_TYPE (tsource);
   se->expr = fold_build3_loc (input_location, COND_EXPR, type, mask, tsource,
 			      fold_convert (type, fsource));
diff --git a/gcc/testsuite/gfortran.dg/merge_1.f90 b/gcc/testsuite/gfortran.dg/merge_1.f90
new file mode 100644
index 0000000000000000000000000000000000000000..abbc2276b1c9edfe9ae5f716a838efb8b4288194
--- /dev/null
+++ b/gcc/testsuite/gfortran.dg/merge_1.f90
@@ -0,0 +1,49 @@
+! { dg-do run }
+! PR fortran/107874 - merge not using all its arguments
+! Contributed by John Harper
+
+program testmerge9
+  implicit none
+  integer :: i
+  logical :: x(2) = (/.true., .false./)
+  logical :: called(2)
+
+  ! At run-time all arguments shall be evaluated
+  do i = 1,2
+     called = .false.
+     print *, merge (tstuff(), fstuff(), x(i))
+     if (any (.not. called)) stop 1
+  end do
+
+  ! Compile-time simplification shall not drop non-constant args
+  called = .false.
+  print *, merge (tstuff(),fstuff(),.true.)
+  if (any (.not. called)) stop 2
+  called = .false.
+  print *, merge (tstuff(),fstuff(),.false.)
+  if (any (.not. called)) stop 3
+  called = .false.
+  print *, merge (tstuff(),.false.,.true.)
+  if (any (called .neqv. [.true.,.false.])) stop 4
+  called = .false.
+  print *, merge (tstuff(),.false.,.false.)
+  if (any (called .neqv. [.true.,.false.])) stop 5
+  called = .false.
+  print *, merge (.true.,fstuff(),.true.)
+  if (any (called .neqv. [.false.,.true.])) stop 6
+  called = .false.
+  print *, merge (.true.,fstuff(),.false.)
+  if (any (called .neqv. [.false.,.true.])) stop 7
+contains
+  logical function tstuff()
+    print *,'tstuff'
+    tstuff = .true.
+    called(1) = .true.
+  end function tstuff
+  
+  logical function fstuff()
+    print *,'fstuff'
+    fstuff = .false.
+    called(2) = .true.
+  end function fstuff
+end program testmerge9
diff --git a/gcc/testsuite/gfortran.dg/merge_init_expr_2.f90 b/gcc/testsuite/gfortran.dg/merge_init_expr_2.f90
index c761a47cccbdd2a5767a7d044250b10ecd2cecff..f4a838011376a37761cc16a1edd6f8f4523d787c 100644
--- a/gcc/testsuite/gfortran.dg/merge_init_expr_2.f90
+++ b/gcc/testsuite/gfortran.dg/merge_init_expr_2.f90
@@ -48,7 +48,8 @@ end module m2
 
 
 subroutine test
-  character(len=3) :: one, two, three
+  character(len=3) :: one, three
+  character(len=3), parameter :: two = "def"
   logical, parameter :: true = .true.
   three = merge (one, two, true)
 end subroutine test