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diff --git a/lib/hipe/test/basic_SUITE_data/basic_tail_rec.erl b/lib/hipe/test/basic_SUITE_data/basic_tail_rec.erl
new file mode 100644
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+++ b/lib/hipe/test/basic_SUITE_data/basic_tail_rec.erl
@@ -0,0 +1,39 @@
+%%% -*- erlang-indent-level: 2 -*-
+%%%-------------------------------------------------------------------
+%%% Author: Kostis Sagonas
+%%%
+%%% Contains tests that check that tail recursion optimization occurs.
+%%%-------------------------------------------------------------------
+-module(basic_tail_rec).
+
+-export([test/0]).
+-export([app0/2]).  %% used in an apply/3 call
+
+test() ->
+  ok = test_app_tail(),
+  ok.
+
+%%--------------------------------------------------------------------
+%% Written by Mikael Pettersson: check that apply is tail recursive.
+
+%% Increased the following quantity from 20 to 30 so that the test
+%% remains valid even with the naive register allocator.  - Kostis
+-define(SIZE_INCREASE, 30).
+
+test_app_tail() ->
+  Inc = start(400),
+  %% io:format("Inc ~w\n", [Inc]),
+  case Inc > ?SIZE_INCREASE of
+    true ->
+      {error, "apply/3 is not tail recursive in native code"};
+    false ->
+      ok
+  end.
+
+start(N) ->
+  app0(N, hipe_bifs:nstack_used_size()).
+
+app0(0, Size0) ->
+  hipe_bifs:nstack_used_size() - Size0;
+app0(N, Size) ->
+  apply(?MODULE, app0, [N-1, Size]).