diff --git a/synapse/events/snapshot.py b/synapse/events/snapshot.py
index 189212b0f..368b5f6ae 100644
--- a/synapse/events/snapshot.py
+++ b/synapse/events/snapshot.py
@@ -249,7 +249,7 @@ class EventContext(object):
 
     @defer.inlineCallbacks
     def update_state(self, state_group, prev_state_ids, current_state_ids,
-                     delta_ids):
+                     prev_group, delta_ids):
         """Replace the state in the context
         """
 
@@ -260,6 +260,7 @@ class EventContext(object):
 
         self.state_group = state_group
         self._prev_state_ids = prev_state_ids
+        self.prev_group = prev_group
         self._current_state_ids = current_state_ids
         self.delta_ids = delta_ids
 
diff --git a/synapse/handlers/federation.py b/synapse/handlers/federation.py
index 14654d59f..145c1a21d 100644
--- a/synapse/handlers/federation.py
+++ b/synapse/handlers/federation.py
@@ -1980,10 +1980,6 @@ class FederationHandler(BaseHandler):
 
         current_state_ids.update(state_updates)
 
-        if context.delta_ids is not None:
-            delta_ids = dict(context.delta_ids)
-            delta_ids.update(state_updates)
-
         prev_state_ids = yield context.get_prev_state_ids(self.store)
         prev_state_ids = dict(prev_state_ids)
 
@@ -1991,11 +1987,13 @@ class FederationHandler(BaseHandler):
             k: a.event_id for k, a in iteritems(auth_events)
         })
 
+        # create a new state group as a delta from the existing one.
+        prev_group = context.state_group
         state_group = yield self.store.store_state_group(
             event.event_id,
             event.room_id,
-            prev_group=context.prev_group,
-            delta_ids=delta_ids,
+            prev_group=prev_group,
+            delta_ids=state_updates,
             current_state_ids=current_state_ids,
         )
 
@@ -2003,7 +2001,8 @@ class FederationHandler(BaseHandler):
             state_group=state_group,
             current_state_ids=current_state_ids,
             prev_state_ids=prev_state_ids,
-            delta_ids=delta_ids,
+            prev_group=prev_group,
+            delta_ids=state_updates,
         )
 
     @defer.inlineCallbacks