diff --git a/CHANGELOG.md b/CHANGELOG.md
index bdbdae1..effb45c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,7 @@
 	* The middleware API changed in [#29](https://github.com/Roblox/rodux/pull/29) in a backwards-incompatible way!
 		* Middleware now run left-to-right instead of right-to-left!
 * Errors thrown in `changed` event now have correct stack traces ([#27](https://github.com/Roblox/rodux/pull/27))
+* Fixed `createReducer` having incorrect behavior with `nil` state values ([#33](https://github.com/Roblox/rodux/pull/33))
 
 ## Public Release (December 13, 2017)
 * Initial release!
\ No newline at end of file
diff --git a/lib/createReducer.lua b/lib/createReducer.lua
index ffb2683..5560b59 100644
--- a/lib/createReducer.lua
+++ b/lib/createReducer.lua
@@ -1,7 +1,7 @@
 return function(initialState, handlers)
 	return function(state, action)
 		if state == nil then
-			return initialState
+			state = initialState
 		end
 
 		local handler = handlers[action.type]
diff --git a/lib/createReducer.spec.lua b/lib/createReducer.spec.lua
index 7d5ff23..a704944 100644
--- a/lib/createReducer.spec.lua
+++ b/lib/createReducer.spec.lua
@@ -49,6 +49,33 @@ return function()
 		expect(newState.b).to.equal(0)
 	end)
 
+	it("should still run action handlers if the state is nil", function()
+		local callCount = 0
+
+		local reducer = createReducer(0, {
+			foo = function(state, action)
+				callCount = callCount + 1
+				return nil
+			end
+		})
+
+		expect(callCount).to.equal(0)
+
+		local newState = reducer(nil, {
+			type = "foo",
+		})
+
+		expect(callCount).to.equal(1)
+		expect(newState).to.equal(nil)
+
+		newState = reducer(newState, {
+			type = "foo",
+		})
+
+		expect(callCount).to.equal(2)
+		expect(newState).to.equal(nil)
+	end)
+
 	it("should return the same state if the action is not handled", function()
 		local initialState = {
 			a = 0,