diff --git a/lib/sinatra/base.rb b/lib/sinatra/base.rb
index 27135dbc..3b17cf76 100644
--- a/lib/sinatra/base.rb
+++ b/lib/sinatra/base.rb
@@ -944,14 +944,15 @@ module Sinatra
 
       # Sets an option to the given value.  If the value is a proc,
       # the proc will be called every time the option is accessed.
-      def set(option, value=self, &block)
-        raise ArgumentError if block && value != self
+      def set(option, value = (not_set = true), &block)
+        raise ArgumentError if block and !not_set
         value = block if block
         if value.kind_of?(Proc)
           metadef(option, &value)
           metadef("#{option}?") { !!__send__(option) }
           metadef("#{option}=") { |val| metadef(option, &Proc.new{val}) }
-        elsif value == self && option.respond_to?(:each)
+        elsif not_set
+          raise ArgumentError unless option.respond_to?(:each)
           option.each { |k,v| set(k, v) }
         elsif respond_to?("#{option}=")
           __send__ "#{option}=", value
diff --git a/test/settings_test.rb b/test/settings_test.rb
index b8c9788c..71ceb849 100644
--- a/test/settings_test.rb
+++ b/test/settings_test.rb
@@ -34,6 +34,24 @@ class SettingsTest < Test::Unit::TestCase
     assert !@base.respond_to?(:fiz)
   end
 
+  it 'raises an error without value and block' do
+    assert_raise(ArgumentError) { @base.set(:fiz) }
+    assert !@base.respond_to?(:fiz)
+  end
+
+  it 'allows setting a value to the app class' do
+    @base.set :base, @base
+    assert @base.respond_to?(:base)
+    assert_equal @base, @base.base
+  end
+
+  it 'raises an error with the app class as value and a block' do
+    assert_raise ArgumentError do
+      @base.set(:fiz, @base) { 'baz' }
+    end
+    assert !@base.respond_to?(:fiz)
+  end
+
   it "sets multiple settings with a Hash" do
     @base.set :foo => 1234,
         :bar => 'Hello World',