diff --git a/target-ppc/excp_helper.c b/target-ppc/excp_helper.c
index a37009eb2560..30e960e30b63 100644
--- a/target-ppc/excp_helper.c
+++ b/target-ppc/excp_helper.c
@@ -709,8 +709,12 @@ static inline void powerpc_excp(PowerPCCPU *cpu, int excp_model, int excp)
         }
     }
 #endif
-    /* XXX: we don't use hreg_store_msr here as already have treated
-     *      any special case that could occur. Just store MSR and update hflags
+    /* We don't use hreg_store_msr here as already have treated
+     * any special case that could occur. Just store MSR and update hflags
+     *
+     * Note: We *MUST* not use hreg_store_msr() as-is anyway because it
+     * will prevent setting of the HV bit which some exceptions might need
+     * to do.
      */
     env->msr = new_msr & env->msr_mask;
     hreg_compute_hflags(env);
diff --git a/target-ppc/helper_regs.h b/target-ppc/helper_regs.h
index 57da931e3c4d..12af61cbf19b 100644
--- a/target-ppc/helper_regs.h
+++ b/target-ppc/helper_regs.h
@@ -114,8 +114,8 @@ static inline int hreg_store_msr(CPUPPCState *env, target_ulong value,
     excp = 0;
     value &= env->msr_mask;
 #if !defined(CONFIG_USER_ONLY)
-    if (!alter_hv) {
-        /* mtmsr cannot alter the hypervisor state */
+    /* Neither mtmsr nor guest state can alter HV */
+    if (!alter_hv || !(env->msr & MSR_HVB)) {
         value &= ~MSR_HVB;
         value |= env->msr & MSR_HVB;
     }