diff --git a/index.html b/index.html
index 0e71230b..fa8f7b04 100644
--- a/index.html
+++ b/index.html
@@ -1514,7 +1514,8 @@ <h3>Algorithm</h3>
               for <var>prefix</var>, return the result of concatenating
               the <a>IRI mapping</a> associated with <var>prefix</var> and
               <var>suffix</var>.</li>
-            <li>Return <var>value</var> as it is already an <a>absolute IRI</a>.</li>
+            <li><span class="changed">If <var>value</var> has the form of an <a>absolute IRI</a></span>,
+              return <var>value</var>.</li>
           </ol>
         </li>
         <li>If <var>vocab</var> is <code>true</code>, and
@@ -5510,6 +5511,11 @@ <h2>Changes since JSON-LD Community Group Final Report</h2>
       to ensure that <code>@type</code> members are always represented as an array. This
       also allows a term to be defined for <code>@type</code>, where the value MUST be a <a>dictionary</a>
       with <code>@container</code> set to <code>@set</code>.</li>
+    <li>Updated the <a href="#iri-expansion">IRI Expansion algorithm</a> so that
+      if <var>value</var> contains a colon (<code>:</code>), but
+      <var>prefix</var> is not a <a>term</a>, to only return <var>value</var>
+      if it has the form of an <a>absolute IRI</a>, otherwise fall through to
+      the rest of the algorithm.</li>
   </ul>
 </section>
 
diff --git a/tests/expand-manifest.jsonld b/tests/expand-manifest.jsonld
index 350aa160..c9cd3162 100644
--- a/tests/expand-manifest.jsonld
+++ b/tests/expand-manifest.jsonld
@@ -802,6 +802,13 @@
       "input": "expand/0108-in.jsonld",
       "expect": "expand/0108-out.jsonld",
       "option": {"processingMode": "json-ld-1.1", "specVersion": "json-ld-1.1"}
+    }, {
+      "@id": "#t0109",
+      "@type": ["jld:PositiveEvaluationTest", "jld:ExpandTest"],
+      "name": "IRI expansion of fragments including ':'",
+      "purpose": "Do not treat as absolute IRIs values that look like compact IRIs if they're not absolute",
+      "input": "expand/0109-in.jsonld",
+      "expect": "expand/0109-out.jsonld"
     }, {
       "@id": "#tc001",
       "@type": ["jld:PositiveEvaluationTest", "jld:ExpandTest"],
diff --git a/tests/expand/0109-in.jsonld b/tests/expand/0109-in.jsonld
new file mode 100644
index 00000000..7fa22658
--- /dev/null
+++ b/tests/expand/0109-in.jsonld
@@ -0,0 +1,7 @@
+{
+  "@context": {
+    "@base": "https://ex.org/",
+    "u": {"@id": "urn:u:", "@type": "@id"}
+  },
+  "u": ["#Test", "#Test:2"]
+}
\ No newline at end of file
diff --git a/tests/expand/0109-out.jsonld b/tests/expand/0109-out.jsonld
new file mode 100644
index 00000000..3a632e05
--- /dev/null
+++ b/tests/expand/0109-out.jsonld
@@ -0,0 +1,6 @@
+[{
+  "urn:u:": [
+    {"@id": "https://ex.org/#Test"},
+    {"@id": "https://ex.org/#Test:2"}
+  ]
+}]
\ No newline at end of file