diff --git a/Lib/test/test_dict.py b/Lib/test/test_dict.py
index 8da0915346c..41446925274 100644
--- a/Lib/test/test_dict.py
+++ b/Lib/test/test_dict.py
@@ -454,6 +454,17 @@ class DictTest(unittest.TestCase):
         else:
             self.fail("missing KeyError")
 
+    def test_empty_presized_dict_in_freelist(self):
+        # Bug #3537: if an empty but presized dict with a size larger
+        # than 7 was in the freelist, it triggered an assertion failure
+        try:
+            d = {'a': 1/0,  'b': None, 'c': None, 'd': None, 'e': None,
+                 'f': None, 'g': None, 'h': None}
+        except ZeroDivisionError:
+            pass
+        d = {}
+
+
 
 from test import mapping_tests
 
diff --git a/Misc/NEWS b/Misc/NEWS
index 273e294097f..c8d45108b1d 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -12,6 +12,9 @@ What's New in Python 2.5.3?
 Core and builtins
 -----------------
 
+- Issue #3537: Fix an assertion failure when an empty but presized dict
+  object was stored in the freelist.
+
 - Apply security patches from Apple.
 
 - Issue #2620: Overflow checking when allocating or reallocating memory
diff --git a/Objects/dictobject.c b/Objects/dictobject.c
index 412d5f2e315..8c8a2f92e70 100644
--- a/Objects/dictobject.c
+++ b/Objects/dictobject.c
@@ -208,6 +208,10 @@ PyDict_New(void)
 		_Py_NewReference((PyObject *)mp);
 		if (mp->ma_fill) {
 			EMPTY_TO_MINSIZE(mp);
+		} else {
+			/* At least set ma_table and ma_mask; these are wrong
+			   if an empty but presized dict is added to freelist */
+			INIT_NONZERO_DICT_SLOTS(mp);
 		}
 		assert (mp->ma_used == 0);
 		assert (mp->ma_table == mp->ma_smalltable);