diff --git a/mysql-test/r/subselect.result b/mysql-test/r/subselect.result
index 81f087fe8fa..d5a1c0b2451 100644
--- a/mysql-test/r/subselect.result
+++ b/mysql-test/r/subselect.result
@@ -3924,3 +3924,26 @@ c	a	(SELECT GROUP_CONCAT(COUNT(a)+1) FROM t2 WHERE m = a)
 3	3	4
 1	4	2,2
 DROP table t1,t2;
+CREATE TABLE t1 (a int, b int);
+INSERT INTO t1 VALUES (2,22),(1,11),(2,22);
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 0 GROUP BY a;
+a
+1
+2
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 1 GROUP BY a;
+a
+SELECT a FROM t1 t0
+WHERE (SELECT COUNT(t0.b) FROM t1 t WHERE t.b>20) GROUP BY a;
+a
+1
+2
+SET @@sql_mode='ansi';
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 0 GROUP BY a;
+ERROR HY000: Invalid use of group function
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 1 GROUP BY a;
+ERROR HY000: Invalid use of group function
+SELECT a FROM t1 t0
+WHERE (SELECT COUNT(t0.b) FROM t1 t WHERE t.b>20) GROUP BY a;
+ERROR HY000: Invalid use of group function
+SET @@sql_mode=default;
+DROP TABLE t1;
diff --git a/mysql-test/t/subselect.test b/mysql-test/t/subselect.test
index efd54ca95d1..182b9b27ef7 100644
--- a/mysql-test/t/subselect.test
+++ b/mysql-test/t/subselect.test
@@ -2782,3 +2782,30 @@ SELECT COUNT(*) c, a,
   FROM t1 GROUP BY a;
 
 DROP table t1,t2;
+
+#
+# Bug #27348: SET FUNCTION used in  a subquery from WHERE condition 
+#  
+
+CREATE TABLE t1 (a int, b int);
+INSERT INTO t1 VALUES (2,22),(1,11),(2,22);
+
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 0 GROUP BY a;
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 1 GROUP BY a;
+
+SELECT a FROM t1 t0
+  WHERE (SELECT COUNT(t0.b) FROM t1 t WHERE t.b>20) GROUP BY a;
+
+SET @@sql_mode='ansi';
+--error 1111
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 0 GROUP BY a;
+--error 1111
+SELECT a FROM t1 WHERE (SELECT COUNT(b) FROM DUAL) > 1 GROUP BY a;
+
+--error 1111
+SELECT a FROM t1 t0
+  WHERE (SELECT COUNT(t0.b) FROM t1 t WHERE t.b>20) GROUP BY a;
+
+SET @@sql_mode=default;
+
+DROP TABLE t1;
diff --git a/sql/item_sum.cc b/sql/item_sum.cc
index 368dc9a7d38..e10357dc0e0 100644
--- a/sql/item_sum.cc
+++ b/sql/item_sum.cc
@@ -149,6 +149,8 @@ bool Item_sum::check_sum_func(THD *thd, Item **ref)
     if (register_sum_func(thd, ref))
       return TRUE;
     invalid= aggr_level < 0 && !(allow_sum_func & (1 << nest_level));
+    if (!invalid && thd->variables.sql_mode & MODE_ANSI)
+      invalid= aggr_level < 0 && max_arg_level < nest_level;
   }
   if (!invalid && aggr_level < 0)
   {
@@ -164,8 +166,9 @@ bool Item_sum::check_sum_func(THD *thd, Item **ref)
     Additionally we have to check whether possible nested set functions
     are acceptable here: they are not, if the level of aggregation of
     some of them is less than aggr_level.
-  */ 
-  invalid= aggr_level <= max_sum_func_level;
+  */
+  if (!invalid) 
+    invalid= aggr_level <= max_sum_func_level;
   if (invalid)  
   {
     my_message(ER_INVALID_GROUP_FUNC_USE, ER(ER_INVALID_GROUP_FUNC_USE),