diff --git a/Control/Monad/Logic.hs b/Control/Monad/Logic.hs
--- a/Control/Monad/Logic.hs
+++ b/Control/Monad/Logic.hs
@@ -195,7 +195,9 @@
 -- Needs undecidable instances
 instance MonadReader r m => MonadReader r (LogicT m) where
     ask = lift ask
-    local f m = LogicT (\sk fk -> local f (unLogicT m sk fk))
+    local f (LogicT m) = LogicT $ \sk fk -> do
+        env <- ask
+        local f $ m ((local (const env) .) . sk) (local (const env) fk)
 
 -- Needs undecidable instances
 instance MonadState s m => MonadState s (LogicT m) where
diff --git a/changelog.md b/changelog.md
--- a/changelog.md
+++ b/changelog.md
@@ -1,3 +1,7 @@
+# 0.7.0.1
+
+* Fix `MonadReader r (LogicT m)` instance again.
+
 # 0.7.0.0
 
 * Remove unlawful `MonadLogic (Writer T w m)` instances.
diff --git a/logict.cabal b/logict.cabal
--- a/logict.cabal
+++ b/logict.cabal
@@ -1,38 +1,53 @@
-name:                   logict
-version:                0.7.0.0
-description:            A continuation-based, backtracking, logic programming monad.
-                        An adaptation of the two-continuation implementation found
-                        in the paper "Backtracking, Interleaving, and Terminating
-                        Monad Transformers" available here:
-                        <http://okmij.org/ftp/papers/LogicT.pdf>
-synopsis:               A backtracking logic-programming monad.
-category:               Control
-license:                BSD3
-license-file:           LICENSE
-copyright:              Copyright (c) 2007-2014, Dan Doel,
-                        Copyright (c) 2011-2013, Edward Kmett,
-                        Copyright (c) 2014, Roman Cheplyaka
-author:                 Dan Doel
-maintainer:             Andrew Lelechenko <andrew.lelechenko@gmail.com>
-homepage:               https://github.com/Bodigrim/logict#readme
-cabal-version:          >= 1.9.2
-tested-with:            GHC
-build-type:             Simple
-extra-source-files:     changelog.md
+name: logict
+version: 0.7.0.1
+license: BSD3
+license-file: LICENSE
+copyright:
+  Copyright (c) 2007-2014, Dan Doel,
+  Copyright (c) 2011-2013, Edward Kmett,
+  Copyright (c) 2014, Roman Cheplyaka
+maintainer: Andrew Lelechenko <andrew.lelechenko@gmail.com>
+author: Dan Doel
+tested-with: ghc -any
+homepage: https://github.com/Bodigrim/logict#readme
+synopsis: A backtracking logic-programming monad.
+description:
+  A continuation-based, backtracking, logic programming monad.
+  An adaptation of the two-continuation implementation found
+  in the paper "Backtracking, Interleaving, and Terminating
+  Monad Transformers" available here:
+  <http://okmij.org/ftp/papers/LogicT.pdf>
+category: Control
+build-type: Simple
+extra-source-files:
+  changelog.md
+cabal-version: >=1.9.2
 
 source-repository head
   type: git
   location: https://github.com/Bodigrim/logict
 
 library
-  build-depends:          base >=2 && < 5, mtl>=2 && <2.3
-  if impl(ghc < 8.0)
-    build-depends:        fail
+  exposed-modules:
+    Control.Monad.Logic
+    Control.Monad.Logic.Class
+  ghc-options: -O2 -Wall
+  build-depends:
+    base >=2 && <5,
+    mtl >=2 && <2.3
 
-  exposed-modules:        Control.Monad.Logic,
-                          Control.Monad.Logic.Class
-  extensions:             MultiParamTypeClasses,
-                          UndecidableInstances,
-                          Rank2Types,
-                          FlexibleInstances
-  ghc-options:            -O2 -Wall
+  if impl(ghc <8.0)
+    build-depends:
+      fail -any
+
+test-suite logict-tests
+  type: exitcode-stdio-1.0
+  main-is: Test.hs
+  ghc-options: -Wall
+  build-depends:
+    base >=2 && <5,
+    logict -any,
+    mtl >=2 && <2.3,
+    tasty,
+    tasty-hunit
+  hs-source-dirs: test
diff --git a/test/Test.hs b/test/Test.hs
new file mode 100644
--- /dev/null
+++ b/test/Test.hs
@@ -0,0 +1,29 @@
+{-# LANGUAGE FlexibleContexts #-}
+
+module Main where
+
+import Test.Tasty
+import Test.Tasty.HUnit
+
+import Control.Monad.Logic
+import Control.Monad.Reader
+
+monadReader1 :: Assertion
+monadReader1 = assertEqual "should be equal" [5 :: Int] $
+  runReader (observeAllT (local (+ 5) ask)) 0
+
+monadReader2 :: Assertion
+monadReader2 = assertEqual "should be equal" [(5, 0)] $
+  runReader (observeAllT foo) 0
+  where
+    foo :: MonadReader Int m => m (Int,Int)
+    foo = do
+      x <- local (5+) ask
+      y <- ask
+      return (x,y)
+
+main :: IO ()
+main = defaultMain $ testGroup "All"
+    [ testCase "Monad Reader 1" monadReader1
+    , testCase "Monad Reader 2" monadReader2
+    ]