diff --git a/block/qcow2-refcount.c b/block/qcow2-refcount.c
index 2fdc26b..66a7912 100644
--- a/block/qcow2-refcount.c
+++ b/block/qcow2-refcount.c
@@ -27,7 +27,7 @@
 #include "block/qcow2.h"
 
 static int64_t alloc_clusters_noref(BlockDriverState *bs, int64_t size);
-static int update_refcount(BlockDriverState *bs,
+static int QEMU_WARN_UNUSED_RESULT update_refcount(BlockDriverState *bs,
                             int64_t offset, int64_t length,
                             int addend);
 
@@ -123,124 +123,265 @@ static int get_refcount(BlockDriverState *bs, int64_t cluster_index)
     return be16_to_cpu(s->refcount_block_cache[block_index]);
 }
 
-static int grow_refcount_table(BlockDriverState *bs, int min_size)
+/*
+ * Rounds the refcount table size up to avoid growing the table for each single
+ * refcount block that is allocated.
+ */
+static unsigned int next_refcount_table_size(BDRVQcowState *s,
+    unsigned int min_size)
 {
-    BDRVQcowState *s = bs->opaque;
-    int new_table_size, new_table_size2, refcount_table_clusters, i, ret;
-    uint64_t *new_table;
-    int64_t table_offset;
-    uint8_t data[12];
-    int old_table_size;
-    int64_t old_table_offset;
+    unsigned int refcount_table_clusters = 0;
+    unsigned int new_table_size = 1;
 
-    if (min_size <= s->refcount_table_size)
-        return 0;
-    /* compute new table size */
-    refcount_table_clusters = s->refcount_table_size >> (s->cluster_bits - 3);
-    for(;;) {
+    while (min_size > new_table_size) {
         if (refcount_table_clusters == 0) {
             refcount_table_clusters = 1;
         } else {
             refcount_table_clusters = (refcount_table_clusters * 3 + 1) / 2;
         }
         new_table_size = refcount_table_clusters << (s->cluster_bits - 3);
-        if (min_size <= new_table_size)
-            break;
     }
-#ifdef DEBUG_ALLOC2
-    printf("grow_refcount_table from %d to %d\n",
-           s->refcount_table_size,
-           new_table_size);
-#endif
-    new_table_size2 = new_table_size * sizeof(uint64_t);
-    new_table = qemu_mallocz(new_table_size2);
-    memcpy(new_table, s->refcount_table,
-           s->refcount_table_size * sizeof(uint64_t));
-    for(i = 0; i < s->refcount_table_size; i++)
-        cpu_to_be64s(&new_table[i]);
-    /* Note: we cannot update the refcount now to avoid recursion */
-    table_offset = alloc_clusters_noref(bs, new_table_size2);
-    ret = bdrv_pwrite(s->hd, table_offset, new_table, new_table_size2);
-    if (ret != new_table_size2)
-        goto fail;
-    for(i = 0; i < s->refcount_table_size; i++)
-        be64_to_cpus(&new_table[i]);
 
-    cpu_to_be64w((uint64_t*)data, table_offset);
-    cpu_to_be32w((uint32_t*)(data + 8), refcount_table_clusters);
-    ret = bdrv_pwrite(s->hd, offsetof(QCowHeader, refcount_table_offset),
-                    data, sizeof(data));
-    if (ret != sizeof(data)) {
-        goto fail;
-    }
+    return new_table_size;
+}
 
-    qemu_free(s->refcount_table);
-    old_table_offset = s->refcount_table_offset;
-    old_table_size = s->refcount_table_size;
-    s->refcount_table = new_table;
-    s->refcount_table_size = new_table_size;
-    s->refcount_table_offset = table_offset;
+/* Checks if two offsets are described by the same refcount block */
+static int in_same_refcount_block(BDRVQcowState *s, uint64_t offset_a,
+    uint64_t offset_b)
+{
+    uint64_t block_a = offset_a >> (2 * s->cluster_bits - REFCOUNT_SHIFT);
+    uint64_t block_b = offset_b >> (2 * s->cluster_bits - REFCOUNT_SHIFT);
 
-    update_refcount(bs, table_offset, new_table_size2, 1);
-    qcow2_free_clusters(bs, old_table_offset, old_table_size * sizeof(uint64_t));
-    return 0;
- fail:
-    qemu_free(new_table);
-    return ret < 0 ? ret : -EIO;
+    return (block_a == block_b);
 }
 
-
+/*
+ * Loads a refcount block. If it doesn't exist yet, it is allocated first
+ * (including growing the refcount table if needed).
+ *
+ * Returns the offset of the refcount block on success or -errno in error case
+ */
 static int64_t alloc_refcount_block(BlockDriverState *bs, int64_t cluster_index)
 {
     BDRVQcowState *s = bs->opaque;
-    int64_t offset, refcount_block_offset;
     unsigned int refcount_table_index;
+    uint64_t refcount_block_offset;
     int ret;
-    uint64_t data64;
-    int cache = cache_refcount_updates;
 
-    /* Find L1 index and grow refcount table if needed */
+    /* Find the refcount block for the given cluster */
     refcount_table_index = cluster_index >> (s->cluster_bits - REFCOUNT_SHIFT);
     if (refcount_table_index >= s->refcount_table_size) {
-        ret = grow_refcount_table(bs, refcount_table_index + 1);
-        if (ret < 0)
-            return ret;
+        refcount_block_offset = 0;
+    } else {
+        refcount_block_offset = s->refcount_table[refcount_table_index];
     }
 
-    /* Load or allocate the refcount block */
-    refcount_block_offset = s->refcount_table[refcount_table_index];
-    if (!refcount_block_offset) {
-        if (cache_refcount_updates) {
-            write_refcount_block(s);
-            cache_refcount_updates = 0;
+    /* If it's already there, we're done */
+    if (refcount_block_offset) {
+        if (refcount_block_offset != s->refcount_block_cache_offset) {
+            ret = load_refcount_block(bs, refcount_block_offset);
+            if (ret < 0) {
+                return ret;
+            }
         }
-        /* create a new refcount block */
-        /* Note: we cannot update the refcount now to avoid recursion */
-        offset = alloc_clusters_noref(bs, s->cluster_size);
-        memset(s->refcount_block_cache, 0, s->cluster_size);
-        ret = bdrv_pwrite(s->hd, offset, s->refcount_block_cache, s->cluster_size);
-        if (ret != s->cluster_size)
-            return -EINVAL;
-        s->refcount_table[refcount_table_index] = offset;
-        data64 = cpu_to_be64(offset);
-        ret = bdrv_pwrite(s->hd, s->refcount_table_offset +
-                          refcount_table_index * sizeof(uint64_t),
-                          &data64, sizeof(data64));
-        if (ret != sizeof(data64))
-            return -EINVAL;
-
-        refcount_block_offset = offset;
-        s->refcount_block_cache_offset = offset;
-        update_refcount(bs, offset, s->cluster_size, 1);
-        cache_refcount_updates = cache;
+        return refcount_block_offset;
+    }
+
+    /*
+     * If we came here, we need to allocate something. Something is at least
+     * a cluster for the new refcount block. It may also include a new refcount
+     * table if the old refcount table is too small.
+     *
+     * Note that allocating clusters here needs some special care:
+     *
+     * - We can't use the normal qcow2_alloc_clusters(), it would try to
+     *   increase the refcount and very likely we would end up with an endless
+     *   recursion. Instead we must place the refcount blocks in a way that
+     *   they can describe them themselves.
+     *
+     * - We need to consider that at this point we are inside update_refcounts
+     *   and doing the initial refcount increase. This means that some clusters
+     *   have already been allocated by the caller, but their refcount isn't
+     *   accurate yet. free_cluster_index tells us where this allocation ends
+     *   as long as we don't overwrite it by freeing clusters.
+     *
+     * - alloc_clusters_noref and qcow2_free_clusters may load a different
+     *   refcount block into the cache
+     */
+
+    if (cache_refcount_updates) {
+        write_refcount_block(s);
+    }
+
+    /* Allocate the refcount block itself and mark it as used */
+    uint64_t new_block = alloc_clusters_noref(bs, s->cluster_size);
+    memset(s->refcount_block_cache, 0, s->cluster_size);
+    s->refcount_block_cache_offset = new_block;
+
+#ifdef DEBUG_ALLOC2
+    fprintf(stderr, "qcow2: Allocate refcount block %d for %" PRIx64
+        " at %" PRIx64 "\n",
+        refcount_table_index, cluster_index << s->cluster_bits, new_block);
+#endif
+
+    if (in_same_refcount_block(s, new_block, cluster_index << s->cluster_bits)) {
+        /* The block describes itself, need to update the cache */
+        int block_index = (new_block >> s->cluster_bits) &
+            ((1 << (s->cluster_bits - REFCOUNT_SHIFT)) - 1);
+        s->refcount_block_cache[block_index] = cpu_to_be16(1);
     } else {
-        if (refcount_block_offset != s->refcount_block_cache_offset) {
-            if (load_refcount_block(bs, refcount_block_offset) < 0)
-                return -EIO;
+        /* Described somewhere else. This can recurse at most twice before we
+         * arrive at a block that describes itself. */
+        ret = update_refcount(bs, new_block, s->cluster_size, 1);
+        if (ret < 0) {
+            goto fail_block;
+        }
+    }
+
+    /* Now the new refcount block needs to be written to disk */
+    ret = bdrv_pwrite(s->hd, new_block, s->refcount_block_cache,
+        s->cluster_size);
+    if (ret < 0) {
+        goto fail_block;
+    }
+
+    /* If the refcount table is big enough, just hook the block up there */
+    if (refcount_table_index < s->refcount_table_size) {
+        uint64_t data64 = cpu_to_be64(new_block);
+        ret = bdrv_pwrite(s->hd,
+            s->refcount_table_offset + refcount_table_index * sizeof(uint64_t),
+            &data64, sizeof(data64));
+        if (ret < 0) {
+            goto fail_block;
         }
+
+        s->refcount_table[refcount_table_index] = new_block;
+        return new_block;
     }
 
-    return refcount_block_offset;
+    /*
+     * If we come here, we need to grow the refcount table. Again, a new
+     * refcount table needs some space and we can't simply allocate to avoid
+     * endless recursion.
+     *
+     * Therefore let's grab new refcount blocks at the end of the image, which
+     * will describe themselves and the new refcount table. This way we can
+     * reference them only in the new table and do the switch to the new
+     * refcount table at once without producing an inconsistent state in
+     * between.
+     */
+    /* Calculate the number of refcount blocks needed so far */
+    uint64_t refcount_block_clusters = 1 << (s->cluster_bits - REFCOUNT_SHIFT);
+    uint64_t blocks_used = (s->free_cluster_index +
+        refcount_block_clusters - 1) / refcount_block_clusters;
+
+    /* And now we need at least one block more for the new metadata */
+    uint64_t table_size = next_refcount_table_size(s, blocks_used + 1);
+    uint64_t last_table_size = table_size;
+    uint64_t blocks_clusters;
+    do {
+        uint64_t table_clusters = size_to_clusters(s, table_size);
+        blocks_clusters = 1 +
+            ((table_clusters + refcount_block_clusters - 1)
+            / refcount_block_clusters);
+        uint64_t meta_clusters = table_clusters + blocks_clusters;
+
+        table_size = next_refcount_table_size(s, blocks_used +
+            ((meta_clusters + refcount_block_clusters - 1)
+            / refcount_block_clusters));
+
+    } while (last_table_size != table_size);
+
+#ifdef DEBUG_ALLOC2
+    fprintf(stderr, "qcow2: Grow refcount table %" PRId32 " => %" PRId64 "\n",
+        s->refcount_table_size, table_size);
+#endif
+
+    /* Create the new refcount table and blocks */
+    uint64_t meta_offset = (blocks_used * refcount_block_clusters) *
+        s->cluster_size;
+    uint64_t table_offset = meta_offset + blocks_clusters * s->cluster_size;
+    uint16_t *new_blocks = qemu_mallocz(blocks_clusters * s->cluster_size);
+    uint64_t *new_table = qemu_mallocz(table_size * sizeof(uint64_t));
+
+    assert(meta_offset >= (s->free_cluster_index * s->cluster_size));
+
+    /* Fill the new refcount table */
+    memcpy(new_table, s->refcount_table,
+        s->refcount_table_size * sizeof(uint64_t));
+    new_table[refcount_table_index] = new_block;
+
+    int i;
+    for (i = 0; i < blocks_clusters; i++) {
+        new_table[blocks_used + i] = meta_offset + (i * s->cluster_size);
+    }
+
+    /* Fill the refcount blocks */
+    uint64_t table_clusters = size_to_clusters(s, table_size * sizeof(uint64_t));
+    int block = 0;
+    for (i = 0; i < table_clusters + blocks_clusters; i++) {
+        new_blocks[block++] = cpu_to_be16(1);
+    }
+
+    /* Write refcount blocks to disk */
+    ret = bdrv_pwrite(s->hd, meta_offset, new_blocks,
+        blocks_clusters * s->cluster_size);
+    qemu_free(new_blocks);
+    if (ret < 0) {
+        goto fail_table;
+    }
+
+    /* Write refcount table to disk */
+    for(i = 0; i < table_size; i++) {
+        cpu_to_be64s(&new_table[i]);
+    }
+
+    ret = bdrv_pwrite(s->hd, table_offset, new_table,
+        table_size * sizeof(uint64_t));
+    if (ret < 0) {
+        goto fail_table;
+    }
+
+    for(i = 0; i < table_size; i++) {
+        cpu_to_be64s(&new_table[i]);
+    }
+
+    /* Hook up the new refcount table in the qcow2 header */
+    uint8_t data[12];
+    cpu_to_be64w((uint64_t*)data, table_offset);
+    cpu_to_be32w((uint32_t*)(data + 8), table_clusters);
+    ret = bdrv_pwrite(s->hd, offsetof(QCowHeader, refcount_table_offset),
+        data, sizeof(data));
+    if (ret < 0) {
+        goto fail_table;
+    }
+
+    /* And switch it in memory */
+    uint64_t old_table_offset = s->refcount_table_offset;
+    uint64_t old_table_size = s->refcount_table_size;
+
+    qemu_free(s->refcount_table);
+    s->refcount_table = new_table;
+    s->refcount_table_size = table_size;
+    s->refcount_table_offset = table_offset;
+
+    /* Free old table. Remember, we must not change free_cluster_index */
+    uint64_t old_free_cluster_index = s->free_cluster_index;
+    qcow2_free_clusters(bs, old_table_offset, old_table_size * sizeof(uint64_t));
+    s->free_cluster_index = old_free_cluster_index;
+
+    ret = load_refcount_block(bs, new_block);
+    if (ret < 0) {
+        goto fail_block;
+    }
+
+    return new_block;
+
+fail_table:
+    qemu_free(new_table);
+fail_block:
+    s->refcount_block_cache_offset = 0;
+    return ret;
 }
 
 #define REFCOUNTS_PER_SECTOR (512 >> REFCOUNT_SHIFT)
@@ -923,9 +1064,21 @@ int qcow2_check_refcounts(BlockDriverState *bs)
     for(i = 0; i < s->refcount_table_size; i++) {
         int64_t offset;
         offset = s->refcount_table[i];
+
+        /* Refcount blocks are cluster aligned */
+        if (offset & (s->cluster_size - 1)) {
+            fprintf(stderr, "ERROR refcount block %d is not "
+                "cluster aligned; refcount table entry corrupted\n", i);
+            errors++;
+        }
+
         if (offset != 0) {
             errors += inc_refcounts(bs, refcount_table, nb_clusters,
                           offset, s->cluster_size);
+            if (refcount_table[offset / s->cluster_size] != 1) {
+                fprintf(stderr, "ERROR refcount block %d refcount=%d\n",
+                    i, refcount_table[offset / s->cluster_size]);
+            }
         }
     }
 
