diff --git a/course/externallib.php b/course/externallib.php
index 8d5997663df..81e21ababe5 100644
--- a/course/externallib.php
+++ b/course/externallib.php
@@ -3823,12 +3823,14 @@ class core_course_external extends external_api {
 
             $warning = [];
 
-            $favouriteexists = $ufservice->favourite_exists('core_course', 'courses', $course['id'], \context_system::instance());
+            $favouriteexists = $ufservice->favourite_exists('core_course', 'courses', $course['id'],
+                    \context_course::instance($course['id']));
 
             if ($course['favourite']) {
                 if (!$favouriteexists) {
                     try {
-                        $ufservice->create_favourite('core_course', 'courses', $course['id'], \context_system::instance());
+                        $ufservice->create_favourite('core_course', 'courses', $course['id'],
+                                \context_course::instance($course['id']));
                     } catch (Exception $e) {
                         $warning['courseid'] = $course['id'];
                         if ($e instanceof moodle_exception) {
@@ -3849,7 +3851,8 @@ class core_course_external extends external_api {
             } else {
                 if ($favouriteexists) {
                     try {
-                        $ufservice->delete_favourite('core_course', 'courses', $course['id'], \context_system::instance());
+                        $ufservice->delete_favourite('core_course', 'courses', $course['id'],
+                                \context_course::instance($course['id']));
                     } catch (Exception $e) {
                         $warning['courseid'] = $course['id'];
                         if ($e instanceof moodle_exception) {
diff --git a/lib/db/upgrade.php b/lib/db/upgrade.php
index 9b9fb47a21e..350bf04a61b 100644
--- a/lib/db/upgrade.php
+++ b/lib/db/upgrade.php
@@ -2771,5 +2771,18 @@ function xmldb_main_upgrade($oldversion) {
         upgrade_main_savepoint(true, 2018110700.01);
     }
 
+    if ($oldversion < 2018111300.01) {
+        // Update favourited courses, so they are saved in the particular course context instead of the system.
+        $favouritedcourses = $DB->get_records('favourite', ['component' => 'core_course', 'itemtype' => 'courses']);
+
+        foreach ($favouritedcourses as $fc) {
+            $coursecontext = \context_course::instance($fc->itemid);
+            $fc->contextid = $coursecontext->id;
+            $DB->update_record('favourite', $fc);
+        }
+
+        upgrade_main_savepoint(true, 2018111300.01);
+    }
+
     return true;
 }
diff --git a/version.php b/version.php
index 6a8ab5b3d7b..d60bf4f7f7b 100644
--- a/version.php
+++ b/version.php
@@ -29,7 +29,7 @@
 
 defined('MOODLE_INTERNAL') || die();
 
-$version  = 2018111300.00;              // YYYYMMDD      = weekly release date of this DEV branch.
+$version  = 2018111300.01;              // YYYYMMDD      = weekly release date of this DEV branch.
                                         //         RR    = release increments - 00 in DEV branches.
                                         //           .XX = incremental changes.