diff --git a/src/diff/index.js b/src/diff/index.js
index be14cf60c6..ad6d9991fa 100644
--- a/src/diff/index.js
+++ b/src/diff/index.js
@@ -277,7 +277,7 @@ function diffElementNodes(dom, newVNode, oldVNode, context, isSvg, excessDomChil
 			}
 			let oldHtml = oldProps.dangerouslySetInnerHTML;
 			let newHtml = newProps.dangerouslySetInnerHTML;
-			if (newHtml || oldHtml) {
+			if ((newHtml || oldHtml) && excessDomChildren==null) {
 				// Avoid re-applying the same '__html' if it did not changed between re-render
 				if (!newHtml || !oldHtml || newHtml.__html!=oldHtml.__html) {
 					dom.innerHTML = newHtml && newHtml.__html || '';
diff --git a/test/browser/render.test.js b/test/browser/render.test.js
index be88e47c6d..bb3f13d622 100644
--- a/test/browser/render.test.js
+++ b/test/browser/render.test.js
@@ -620,14 +620,14 @@ describe('render()', () => {
 			expect(scratch.innerHTML).to.equal('<div><foo><bar>test</bar></foo></div>');
 		});
 
-		it('should hydrate with dangerouslySetInnerHTML', () => {
+		it('should not hydrate with dangerouslySetInnerHTML', () => {
 			let html = '<b>foo &amp; bar</b>';
 			scratch.innerHTML = `<div>${html}</div>`;
 			// eslint-disable-next-line react/no-danger
 			render(<div dangerouslySetInnerHTML={{ __html: html }} />, scratch);
 
-			expect(scratch.firstChild).to.have.property('innerHTML', html);
-			expect(scratch.innerHTML).to.equal(`<div>${html}</div>`);
+			expect(scratch.firstChild).to.have.property('innerHTML', '');
+			expect(scratch.innerHTML).to.equal(`<div></div>`);
 		});
 
 		it('should avoid reapplying innerHTML when __html property of dangerouslySetInnerHTML attr remains unchanged', () => {