diff --git a/devstack/dsconf.py b/devstack/dsconf.py
index 66071cd..f02478a 100644
--- a/devstack/dsconf.py
+++ b/devstack/dsconf.py
@@ -306,4 +306,4 @@ class LocalConf(object):
                         self.set_local(m.group(1), m.group(2))
             else:
                 for section, name, value in lc._conf(group, conf):
-                    lc.set(group, conf, section, name, value)
+                    self.set(group, conf, section, name, value)
diff --git a/devstack/tests/test_localconf_merge.py b/devstack/tests/test_localconf_merge.py
new file mode 100644
index 0000000..50d4b74
--- /dev/null
+++ b/devstack/tests/test_localconf_merge.py
@@ -0,0 +1,88 @@
+# Copyright 2017 IBM
+#
+# Licensed under the Apache License, Version 2.0 (the "License"); you may
+# not use this file except in compliance with the License. You may obtain
+# a copy of the License at
+#
+#    http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+# WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+# License for the specific language governing permissions and limitations
+# under the License.
+
+# Implementation of ini add / remove for devstack. We don't use the
+# python ConfigFile parser because that ends up rewriting the entire
+# file and doesn't ensure comments remain.
+
+import fixtures
+import os.path
+import testtools
+
+from devstack import dsconf
+
+
+BASIC = """
+[[local|localrc]]
+a = b
+c = d
+f = 1
+[[post-config|$NEUTRON_CONF]]
+[DEFAULT]
+global_physnet_mtu=1450
+[[post-config|$NOVA_CONF]]
+[upgrade_levels]
+compute = auto
+"""
+
+LC1 = """
+[[local|localrc]]
+a = 5
+g = 2
+[[post-config|$NEUTRON_CONF]]
+[DEFAULT]
+global_physnet_mtu=1400
+[[post-config|$GLANCE_CONF]]
+[upgrade_levels]
+compute = auto
+"""
+
+RESULT1 = """
+[[local|localrc]]
+a = 5
+c = d
+f = 1
+g = 2
+[[post-config|$NEUTRON_CONF]]
+[DEFAULT]
+global_physnet_mtu = 1400
+[[post-config|$NOVA_CONF]]
+[upgrade_levels]
+compute = auto
+[[post-config|$GLANCE_CONF]]
+[upgrade_levels]
+compute = auto
+"""
+
+
+class TestLcMerge(testtools.TestCase):
+
+    def setUp(self):
+        super(TestLcMerge, self).setUp()
+        self._path = self.useFixture(fixtures.TempDir()).path
+        self._path += "/local.conf"
+        with open(self._path, "w") as f:
+            f.write(BASIC)
+
+    def test_merge_lc1(self):
+        dirname = self.useFixture(fixtures.TempDir()).path
+        lc1 = os.path.join(dirname, "local1.conf")
+        with open(lc1, "w+") as f:
+            f.write(LC1)
+        conf = dsconf.LocalConf(self._path)
+        conf.merge_lc(lc1)
+
+        with open(self._path) as f:
+            content = f.read()
+            self.assertEqual(content, RESULT1)