diff --git a/src/deoptimizer.cc b/src/deoptimizer.cc
index 1b78bae305..1f645e41cc 100644
--- a/src/deoptimizer.cc
+++ b/src/deoptimizer.cc
@@ -1752,7 +1752,11 @@ Handle<Object> Deoptimizer::MaterializeNextHeapObject() {
     Handle<JSObject> arguments = Handle<JSObject>::cast(
         Accessors::FunctionGetArguments(function));
     materialized_objects_->Add(arguments);
-    materialization_value_index_ += length;
+    // To keep consistent object counters, we still materialize the
+    // nested values (but we throw them away).
+    for (int i = 0; i < length; ++i) {
+      MaterializeNextValue();
+    }
   } else if (desc.is_arguments()) {
     // Construct an arguments object and copy the parameters to a newly
     // allocated arguments object backing store.
diff --git a/test/mjsunit/regress/regress-348512.js b/test/mjsunit/regress/regress-348512.js
new file mode 100644
index 0000000000..7d896664c2
--- /dev/null
+++ b/test/mjsunit/regress/regress-348512.js
@@ -0,0 +1,37 @@
+// Copyright 2014 the V8 project authors. All rights reserved.
+// Redistribution and use in source and binary forms, with or without
+// modification, are permitted provided that the following conditions are
+// met:
+//
+//     * Redistributions of source code must retain the above copyright
+//       notice, this list of conditions and the following disclaimer.
+//     * Redistributions in binary form must reproduce the above
+//       copyright notice, this list of conditions and the following
+//       disclaimer in the documentation and/or other materials provided
+//       with the distribution.
+//     * Neither the name of Google Inc. nor the names of its
+//       contributors may be used to endorse or promote products derived
+//       from this software without specific prior written permission.
+//
+// THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS
+// "AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT
+// LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
+// A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT
+// OWNER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+// SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
+// LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE,
+// DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY
+// THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT
+// (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE
+// OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+// Flags: --allow-natives-syntax
+
+function h(y) { assertEquals(42, y.u); }
+function g() { h.apply(0, arguments); }
+function f(x) { g({ u : x }); }
+
+f(42);
+f(42);
+%OptimizeFunctionOnNextCall(f);
+f(42);