diff -urpN busybox-1.17.1/editors/sed.c busybox-1.17.1-sed/editors/sed.c
--- busybox-1.17.1/editors/sed.c	2010-07-06 04:25:53.000000000 +0200
+++ busybox-1.17.1-sed/editors/sed.c	2010-08-01 04:15:39.000000000 +0200
@@ -61,6 +61,10 @@
 #include "libbb.h"
 #include "xregex.h"
 
+enum {
+	OPT_in_place = 1 << 0,
+};
+
 /* Each sed command turns into one of these structures. */
 typedef struct sed_cmd_s {
 	/* Ordered by alignment requirements: currently 36 bytes on x86 */
@@ -938,8 +942,11 @@ static void process_files(void)
 
 		if (matched) {
 			/* once matched, "n,xxx" range is dead, disabling it */
-			if (sed_cmd->beg_line > 0)
+			if (sed_cmd->beg_line > 0
+			 && !(option_mask32 & OPT_in_place) /* but not for -i */
+			) {
 				sed_cmd->beg_line = -2;
+			}
 			sed_cmd->in_match = !(
 				/* has the ending line come, or is this a single address command? */
 				(sed_cmd->end_line ?
@@ -1270,9 +1277,6 @@ static void add_cmd_block(char *cmdstr)
 int sed_main(int argc, char **argv) MAIN_EXTERNALLY_VISIBLE;
 int sed_main(int argc UNUSED_PARAM, char **argv)
 {
-	enum {
-		OPT_in_place = 1 << 0,
-	};
 	unsigned opt;
 	llist_t *opt_e, *opt_f;
 	int status = EXIT_SUCCESS;
@@ -1292,6 +1296,7 @@ int sed_main(int argc UNUSED_PARAM, char
 	opt_e = opt_f = NULL;
 	opt_complementary = "e::f::" /* can occur multiple times */
 	                    "nn"; /* count -n */
+	/* -i must be first, to match OPT_in_place definition */
 	opt = getopt32(argv, "irne:f:", &opt_e, &opt_f,
 			    &G.be_quiet); /* counter for -n */
 	//argc -= optind;
diff -urpN busybox-1.17.1/testsuite/sed.tests busybox-1.17.1-sed/testsuite/sed.tests
--- busybox-1.17.1/testsuite/sed.tests	2010-07-06 04:25:54.000000000 +0200
+++ busybox-1.17.1-sed/testsuite/sed.tests	2010-08-01 04:19:26.000000000 +0200
@@ -270,11 +270,16 @@ testing "sed a cmd ended by double backs
 	| two \\
 '
 
-# fisrt three lines are deleted; 4th line is matched and printed by "2,3" and by "4" ranges
+# first three lines are deleted; 4th line is matched and printed by "2,3" and by "4" ranges
 testing "sed with N skipping lines past ranges on next cmds" \
 	"sed -n '1{N;N;d};1p;2,3p;3p;4p'" \
 	"4\n4\n" "" "1\n2\n3\n4\n"
 
+testing "sed -i with address modifies all files, not only first" \
+	"cp input input2; sed -i -e '1s/foo/bar/' input input2 && cat input input2; rm input2" \
+	"bar\nbar\n" "foo\n" ""
+
+
 # testing "description" "arguments" "result" "infile" "stdin"
 
 exit $FAILCOUNT