diff --git a/lib/bundler/cli/update.rb b/lib/bundler/cli/update.rb
index 5de11e84e40..3890ea307aa 100644
--- a/lib/bundler/cli/update.rb
+++ b/lib/bundler/cli/update.rb
@@ -68,7 +68,9 @@ def run
 
       if locked_gems = Bundler.definition.locked_gems
         gems.each do |name|
-          locked_version = locked_gems.specs.find {|s| s.name == name }.version
+          locked_version = locked_gems.specs.find {|s| s.name == name }
+          locked_version &&= locked_version.version
+          next unless locked_version
           new_version = Bundler.definition.specs[name].first
           new_version &&= new_version.version
           if !new_version
diff --git a/spec/commands/update_spec.rb b/spec/commands/update_spec.rb
index a8283cf5935..a2842f09980 100644
--- a/spec/commands/update_spec.rb
+++ b/spec/commands/update_spec.rb
@@ -195,6 +195,23 @@
         expect(the_bundle).not_to include_gems "foo 2.0"
       end
     end
+
+    context "when bundler itself is a transitive dependency" do
+      it "executes without error" do
+        install_gemfile <<-G
+          source "file://#{gem_repo1}"
+          gem "activesupport", :group => :development
+          gem "rack"
+        G
+        update_repo2 do
+          build_gem "activesupport", "3.0"
+        end
+        bundle "update --group development"
+        expect(the_bundle).to include_gems "activesupport 2.3.5"
+        expect(the_bundle).to include_gems "bundler #{Bundler::VERSION}"
+        expect(the_bundle).not_to include_gems "rack 1.2"
+      end
+    end
   end
 
   describe "in a frozen bundle" do