diff --git a/src/htmx.js b/src/htmx.js
index d1cb4989..a7ded6f8 100644
--- a/src/htmx.js
+++ b/src/htmx.js
@@ -702,8 +702,8 @@ return (function () {
             var fragment = makeFragment(responseText);
             if (fragment) {
                 handleOutOfBandSwaps(fragment, settleInfo);
-                handlePreservedElements(fragment);
                 fragment = maybeSelectFromResponse(elt, fragment);
+                handlePreservedElements(fragment);
                 return swap(swapStyle, elt, target, fragment, settleInfo);
             }
         }
diff --git a/test/attributes/hx-preserve.js b/test/attributes/hx-preserve.js
index 08521bc0..1e1c2368 100644
--- a/test/attributes/hx-preserve.js
+++ b/test/attributes/hx-preserve.js
@@ -26,5 +26,14 @@ describe("hx-preserve attribute", function () {
         byId("d2").innerHTML.should.equal("New Content");
     })
 
+    it('preserved element should not be swapped if it lies outside of hx-select', function () {
+        this.server.respondWith("GET", "/test", "<div id='d1' hx-preserve>New Content</div><div id='d2'>New Content</div>");
+        var div = make("<div hx-get='/test' hx-target='#d2' hx-select='#d2' hx-swap='outerHTML'><div id='d1' hx-preserve>Old Content</div><div id='d2'>Old Content</div></div>");
+        div.click();
+        this.server.respond();
+        byId("d1").innerHTML.should.equal("Old Content");
+        byId("d2").innerHTML.should.equal("New Content");
+    })
+
 });