--- gdm-2.16.1/daemon/slave.c
+++ gdm-2.16.1/daemon/slave.c
@@ -3438,6 +3438,12 @@
 	g_setenv ("SHELL", pwent->pw_shell, TRUE);
 	g_unsetenv ("MAIL");	/* Unset $MAIL for broken shells */
 
+	if (d->hostname != NULL && d->hostname [0] != '\0') {
+		ve_setenv ("XAUTHLOCALHOSTNAME", d->hostname, TRUE);
+	} else {
+		ve_setenv ("XAUTHLOCALHOSTNAME", "localhost.localdomain", TRUE);
+	}
+
 	if (d->type == TYPE_STATIC) {
 		g_setenv ("GDM_XSERVER_LOCATION", "local", TRUE);
 	} else if (d->type == TYPE_XDMCP) {