diff --git a/mysql-test/r/view.result b/mysql-test/r/view.result
index 30043e066db..05aeda80c85 100644
--- a/mysql-test/r/view.result
+++ b/mysql-test/r/view.result
@@ -3283,3 +3283,38 @@ DROP TABLE `t-2`;
 DROP VIEW  `v-2`;
 DROP DATABASE `d-1`;
 USE test;
+DROP VIEW IF EXISTS v1;
+DROP TABLE IF EXISTS t1;
+CREATE TABLE t1 (i INT);
+CREATE VIEW v1 AS SELECT * FROM t1;
+ALTER VIEW v1 AS SELECT * FROM t1;
+SHOW CREATE VIEW v1;
+View	Create View
+v1	CREATE ALGORITHM=UNDEFINED DEFINER=`root`@`localhost` SQL SECURITY DEFINER VIEW `v1` AS select `t1`.`i` AS `i` from `t1`
+ALTER DEFINER=no_such@user_1 VIEW v1 AS SELECT * FROM t1;
+Warnings:
+Note	1449	There is no 'no_such'@'user_1' registered
+SHOW CREATE VIEW v1;
+View	Create View
+v1	CREATE ALGORITHM=UNDEFINED DEFINER=`no_such`@`user_1` SQL SECURITY DEFINER VIEW `v1` AS select `t1`.`i` AS `i` from `t1`
+Warnings:
+Note	1449	There is no 'no_such'@'user_1' registered
+ALTER ALGORITHM=MERGE VIEW v1 AS SELECT * FROM t1;
+Warnings:
+Note	1449	There is no 'no_such'@'user_1' registered
+SHOW CREATE VIEW v1;
+View	Create View
+v1	CREATE ALGORITHM=MERGE DEFINER=`no_such`@`user_1` SQL SECURITY DEFINER VIEW `v1` AS select `t1`.`i` AS `i` from `t1`
+Warnings:
+Note	1449	There is no 'no_such'@'user_1' registered
+ALTER ALGORITHM=TEMPTABLE DEFINER=no_such@user_2 VIEW v1 AS SELECT * FROM t1;
+Warnings:
+Note	1449	There is no 'no_such'@'user_2' registered
+SHOW CREATE VIEW v1;
+View	Create View
+v1	CREATE ALGORITHM=TEMPTABLE DEFINER=`no_such`@`user_2` SQL SECURITY DEFINER VIEW `v1` AS select `t1`.`i` AS `i` from `t1`
+Warnings:
+Note	1449	There is no 'no_such'@'user_2' registered
+DROP VIEW v1;
+DROP TABLE t1;
+End of 5.1 tests.
diff --git a/mysql-test/t/view.test b/mysql-test/t/view.test
index 520babafb7e..0915fb01e6f 100644
--- a/mysql-test/t/view.test
+++ b/mysql-test/t/view.test
@@ -3175,3 +3175,30 @@ DROP TABLE `t-2`;
 DROP VIEW  `v-2`;
 DROP DATABASE `d-1`;
 USE test;
+
+
+#
+# Test that ALTER VIEW accepts DEFINER and ALGORITHM, see bug#16425.
+#
+--disable_warnings
+DROP VIEW IF EXISTS v1;
+DROP TABLE IF EXISTS t1;
+--enable_warnings
+
+CREATE TABLE t1 (i INT);
+CREATE VIEW v1 AS SELECT * FROM t1;
+
+ALTER VIEW v1 AS SELECT * FROM t1;
+SHOW CREATE VIEW v1;
+ALTER DEFINER=no_such@user_1 VIEW v1 AS SELECT * FROM t1;
+SHOW CREATE VIEW v1;
+ALTER ALGORITHM=MERGE VIEW v1 AS SELECT * FROM t1;
+SHOW CREATE VIEW v1;
+ALTER ALGORITHM=TEMPTABLE DEFINER=no_such@user_2 VIEW v1 AS SELECT * FROM t1;
+SHOW CREATE VIEW v1;
+
+DROP VIEW v1;
+DROP TABLE t1;
+
+
+--echo End of 5.1 tests.
diff --git a/sql/sql_yacc.yy b/sql/sql_yacc.yy
index 5d24fb4fa65..1e666e475a0 100644
--- a/sql/sql_yacc.yy
+++ b/sql/sql_yacc.yy
@@ -492,7 +492,7 @@ bool my_yyoverflow(short **a, YYSTYPE **b, ulong *yystacksize);
   Currently there is 287 shift/reduce conflict. We should not introduce
   new conflicts any more.
 */
-%expect 287
+%expect 286
 
 /*
    Comments for TOKENS.
@@ -1246,7 +1246,7 @@ bool my_yyoverflow(short **a, YYSTYPE **b, ulong *yystacksize);
 	statement sp_suid
 	sp_c_chistics sp_a_chistics sp_chistic sp_c_chistic xa
         load_data opt_field_or_var_spec fields_or_vars opt_load_data_set_spec
-        definer view_replace_or_algorithm view_replace view_algorithm_opt
+        definer view_replace_or_algorithm view_replace
         view_algorithm view_or_trigger_or_sp_or_event
         view_or_trigger_or_sp_or_event_tail
         view_suid view_tail view_list_opt view_list view_select
@@ -5154,18 +5154,25 @@ alter:
 	    lex->sql_command= SQLCOM_ALTER_FUNCTION;
 	    lex->spname= $3;
 	  }
-        | ALTER view_algorithm_opt definer view_suid
-          VIEW_SYM table_ident
-	  {
-	    THD *thd= YYTHD;
-	    LEX *lex= thd->lex;
-	    lex->sql_command= SQLCOM_CREATE_VIEW;
-	    lex->create_view_mode= VIEW_ALTER;
-	    /* first table in list is target VIEW name */
-	    lex->select_lex.add_table_to_list(thd, $6, NULL, TL_OPTION_UPDATING);
-	  }
-	  view_list_opt AS view_select view_check_option
-	  {}
+        | ALTER view_algorithm definer
+          {
+            Lex->create_view_mode= VIEW_ALTER;
+          }
+          view_tail
+          {}
+        | ALTER definer
+          /*
+            We have two separate rules for ALTER VIEW rather that
+            optional view_algorithm above, to resolve the ambiguity
+            with the ALTER EVENT below.
+          */
+          {
+            LEX *lex= Lex;
+            lex->create_view_algorithm= VIEW_ALGORITHM_UNDEFINED;
+            lex->create_view_mode= VIEW_ALTER;
+          }
+          view_tail
+          {}
 	| ALTER definer EVENT_SYM sp_name
           /*
             BE CAREFUL when you add a new rule to update the block where
@@ -11298,13 +11305,6 @@ view_algorithm:
 	{ Lex->create_view_algorithm= VIEW_ALGORITHM_TMPTABLE; }
 	;
 
-view_algorithm_opt:
-	/* empty */
-	{ Lex->create_view_algorithm= VIEW_ALGORITHM_UNDEFINED; }
-	| view_algorithm
-	{}
-	;
-
 view_suid:
 	/* empty */
 	{ Lex->create_view_suid= VIEW_SUID_DEFAULT; }