diff --git a/Lib/distutils/tests/test_msvc9compiler.py b/Lib/distutils/tests/test_msvc9compiler.py
index 7cf1a12ec7a..05d34e604c2 100644
--- a/Lib/distutils/tests/test_msvc9compiler.py
+++ b/Lib/distutils/tests/test_msvc9compiler.py
@@ -46,7 +46,7 @@ def test_reg_class(self):
         # windows registeries versions.
         path = r'Control Panel\Desktop'
         v = Reg.get_value(path, 'dragfullwindows')
-        self.assertTrue(v in ('0', '1'))
+        self.assertTrue(v in ('0', '1', '2'))
 
         import winreg
         HKCU = winreg.HKEY_CURRENT_USER
diff --git a/Misc/NEWS b/Misc/NEWS
index ba07336fdd6..fada4904a41 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -46,6 +46,9 @@ Core and Builtins
 Library
 -------
 
+- Issue #7354: distutils.tests.test_msvc9compiler - dragfullwindows can 
+  be 2.
+
 - Issue #3976: pprint for sets, frozensets, and dicts now succeed when
   they contain unorderable types.