diff --git a/src/cargo/ops/cargo_generate_lockfile.rs b/src/cargo/ops/cargo_generate_lockfile.rs
index c9a61266a09..741974e3b35 100644
--- a/src/cargo/ops/cargo_generate_lockfile.rs
+++ b/src/cargo/ops/cargo_generate_lockfile.rs
@@ -69,7 +69,7 @@ pub fn update_lockfile(ws: &Workspace, opts: &UpdateOptions) -> CargoResult<()>
                         //       seems like a pretty hokey reason to single out
                         //       the registry as well.
                         let precise = if dep.source_id().is_registry() {
-                            format!("{}={}", dep.name(), precise)
+                            format!("{}={}->{}", dep.name(), dep.version(), precise)
                         } else {
                             precise.to_string()
                         };
diff --git a/src/cargo/sources/registry/index.rs b/src/cargo/sources/registry/index.rs
index 857ed9bc616..55da376129c 100644
--- a/src/cargo/sources/registry/index.rs
+++ b/src/cargo/sources/registry/index.rs
@@ -182,13 +182,20 @@ impl<'cfg> RegistryIndex<'cfg> {
             .map(|s| s.0.clone());
 
         // Handle `cargo update --precise` here. If specified, our own source
-        // will have a precise version listed of the form `<pkg>=<req>` where
-        // `<pkg>` is the name of a crate on this source and `<req>` is the
+        // will have a precise version listed of the form
+        // `<pkg>=<p_req>o-><f_req>` where `<pkg>` is the name of a crate on
+        // this source, `<p_req>` is the version installed and `<f_req> is the
         // version requested (argument to `--precise`).
         let summaries = summaries.filter(|s| match source_id.precise() {
             Some(p) if p.starts_with(&*dep.name()) && p[dep.name().len()..].starts_with('=') => {
-                let vers = &p[dep.name().len() + 1..];
-                s.version().to_string() == vers
+                let mut vers = p[dep.name().len() + 1..].splitn(2, "->");
+                if dep.version_req()
+                    .matches(&Version::parse(vers.next().unwrap()).unwrap())
+                {
+                    vers.next().unwrap() == s.version().to_string()
+                } else {
+                    true
+                }
             }
             _ => true,
         });
diff --git a/tests/testsuite/update.rs b/tests/testsuite/update.rs
index fd106ca0166..053f0888df7 100644
--- a/tests/testsuite/update.rs
+++ b/tests/testsuite/update.rs
@@ -358,3 +358,58 @@ fn change_package_version() {
 
     assert_that(p.cargo("build"), execs().with_status(0));
 }
+
+#[test]
+fn update_precise() {
+    Package::new("log", "0.1.0").publish();
+    Package::new("serde", "0.1.0").publish();
+    Package::new("serde", "0.2.1").publish();
+
+    let p = project("foo")
+        .file(
+            "Cargo.toml",
+            r#"
+                [package]
+                name = "bar"
+                version = "0.0.1"
+                authors = []
+
+                [dependencies]
+                serde = "0.2"
+                foo = { path = "foo" }
+            "#,
+        )
+        .file("src/lib.rs", "")
+        .file(
+            "foo/Cargo.toml",
+            r#"
+                [package]
+                name = "foo"
+                version = "0.0.1"
+                authors = []
+
+                [dependencies]
+                serde = "0.1"
+            "#,
+        )
+        .file("foo/src/lib.rs", "")
+        .build();
+
+    assert_that(p.cargo("build"), execs().with_status(0));
+
+    Package::new("serde", "0.2.0").publish();
+
+    assert_that(
+        p.cargo("update")
+            .arg("-p")
+            .arg("serde:0.2.1")
+            .arg("--precise")
+            .arg("0.2.0"),
+        execs().with_status(0).with_stderr(
+            "\
+[UPDATING] registry `[..]`
+[UPDATING] serde v0.2.1 -> v0.2.0
+",
+        ),
+    );
+}