diff --git a/grade/edit/tree/category.php b/grade/edit/tree/category.php
index deb397bec3a..f715df7af61 100644
--- a/grade/edit/tree/category.php
+++ b/grade/edit/tree/category.php
@@ -237,7 +237,9 @@ if ($mform->is_cancelled()) {
 
     $grade_item->outcomeid = null;
 
+    // This means we want to rescale overridden grades as well.
     if (!empty($data->grade_item_rescalegrades) && $data->grade_item_rescalegrades == 'yes') {
+        $grade_item->markasoverriddenwhengraded = false;
         $grade_item->rescale_grades_keep_percentage($grade_item_copy->grademin, $grade_item_copy->grademax, $grade_item->grademin,
                 $grade_item->grademax, 'gradebook');
     }
diff --git a/grade/tests/behat/grade_regrade_do_not_override.feature b/grade/tests/behat/grade_regrade_do_not_override.feature
new file mode 100644
index 00000000000..a0f963051cc
--- /dev/null
+++ b/grade/tests/behat/grade_regrade_do_not_override.feature
@@ -0,0 +1,77 @@
+@core @core_grades
+Feature: Regrading grades does not unnecessarily mark some as overriden
+  In order to regrade a grade item
+  As an admin
+  I need to keep the overridden status of all grades
+
+  Background:
+    Given the following "courses" exist:
+      | fullname | shortname | category | format |
+      | Course 1 | C1 | 0 | topics |
+    And the following "users" exist:
+      | username | firstname | lastname | email | idnumber |
+      | student1 | Student | 1 | student1@example.com | s1 |
+      | student2 | Student | 2 | student2@example.com | s2 |
+    And the following "course enrolments" exist:
+      | user | course | role |
+      | student1 | C1 | student |
+      | student2 | C1 | student |
+    And the following "activities" exist:
+      | activity | course | idnumber | name | intro |
+      | assign | C1 | assign1 | Assignment 1 | Assignment 1 intro |
+    And I log in as "admin"
+    And I navigate to "Grades > Grade category settings" in site administration
+    And I set the field "Available aggregation types" to "Weighted mean of grades"
+    And I press "Save changes"
+    And I am on "Course 1" course homepage
+    And I follow "Assignment 1"
+    And I navigate to "View all submissions" in current page administration
+    And I click on "Grade" "link" in the "Student 1" "table_row"
+    And I set the field "Grade out of 100" to "80"
+    And I press "Save and show next"
+    And I press "OK"
+    And I set the field "Grade out of 100" to "60"
+    And I press "Save changes"
+    And I am on "Course 1" course homepage
+    And I navigate to "View > Grader report" in the course gradebook
+    And the following should exist in the "gradereport-grader-table" table:
+      |                      |              |              |
+      | First name / Surname | Assignment 1 | Course total |
+      | Student 1            | 80.00        | 80.00        |
+      | Student 2            | 60.00        | 60.00        |
+    And I turn editing mode on
+    And I give the grade "80.00" to the user "Student 2" for the grade item "Course total"
+    And I press "Save changes"
+    And I navigate to "View > Grader report" in the course gradebook
+    And I navigate to "Setup > Gradebook setup" in the course gradebook
+    And I click on "Edit" "link" in the ".coursecategory" "css_element"
+    And I click on "Edit settings" "link" in the ".coursecategory" "css_element"
+    And I set the field "Aggregation" to "Weighted mean of grades"
+    And I set the field "Rescale overridden grades" to "Yes"
+    And I set the field "Maximum grade" to "200"
+    And I press "Save changes"
+
+  @javascript
+  Scenario: Confirm regrading did not overwrite overridden status
+    Given I navigate to "View > Grader report" in the course gradebook
+    Then "td.overridden" "css_element" should not exist in the "Student 1" "table_row"
+    And "td.overridden" "css_element" should exist in the "Student 2" "table_row"
+
+  @javascript
+  Scenario: Confirm overridden course total does not get regraded when activity grade is changed
+    Given I am on "Course 1" course homepage
+    And I follow "Assignment 1"
+    And I navigate to "View all submissions" in current page administration
+    And I click on "Grade" "link" in the "Student 1" "table_row"
+    And I set the field "Grade out of 100" to "90"
+    And I press "Save and show next"
+    And I press "OK"
+    And I set the field "Grade out of 100" to "70"
+    And I press "Save changes"
+    When I am on "Course 1" course homepage
+    And I navigate to "View > Grader report" in the course gradebook
+    Then the following should exist in the "gradereport-grader-table" table:
+      |                      |              |              |
+      | First name / Surname | Assignment 1 | Course total |
+      | Student 1            | 90.00        | 180.00       |
+      | Student 2            | 70.00        | 160.00       |
diff --git a/lib/grade/grade_item.php b/lib/grade/grade_item.php
index 9400b83a78e..c8bc0d7c6db 100644
--- a/lib/grade/grade_item.php
+++ b/lib/grade/grade_item.php
@@ -257,6 +257,11 @@ class grade_item extends grade_object {
      */
     public $dependson_cache = null;
 
+    /**
+     * @var bool If we regrade this item should we mark it as overridden?
+     */
+    public $markasoverriddenwhengraded = true;
+
     /**
      * Constructor. Optionally (and by default) attempts to fetch corresponding row from the database
      *
@@ -1830,7 +1835,7 @@ class grade_item extends grade_object {
 
         // changed grade?
         if ($finalgrade !== false) {
-            if ($this->is_overridable_item()) {
+            if ($this->is_overridable_item() && $this->markasoverriddenwhengraded) {
                 $grade->overridden = time();
             }