diff --git modules/taxonomy/taxonomy.admin.inc modules/taxonomy/taxonomy.admin.inc
index e81eebb..15dd7a1 100644
--- modules/taxonomy/taxonomy.admin.inc
+++ modules/taxonomy/taxonomy.admin.inc
@@ -161,11 +161,9 @@ function taxonomy_form_vocabulary($form, &$form_state, $edit = array()) {
     '#title' => t('Description'),
     '#default_value' => $vocabulary->description,
   );
-  // Set the hierarchy to "multiple parents" by default. This simplifies the
-  // vocabulary form and standardizes the term form.
   $form['hierarchy'] = array(
     '#type' => 'value',
-    '#value' => '0',
+    '#value' => $vocabulary->hierarchy,
   );
 
   $form['actions'] = array('#type' => 'actions');
diff --git modules/taxonomy/taxonomy.test modules/taxonomy/taxonomy.test
index c622d6a..e289abf 100644
--- modules/taxonomy/taxonomy.test
+++ modules/taxonomy/taxonomy.test
@@ -460,6 +460,14 @@ class TaxonomyTermTestCase extends TaxonomyWebTestCase {
     taxonomy_term_save($term2);
     $parents = taxonomy_get_parents($term2->tid);
     $this->assertTrue(isset($parents[$term1->tid]) && isset($parents[$term3->tid]), t('Both parents found successfully.'));
+    // Regression test for http://drupal.org/node/353775
+    $vocab = end(entity_load('taxonomy_vocabulary', array($this->vocabulary->vid), array(), TRUE));
+    $this->assertEqual($vocab->hierarchy, 1, 'Vocabulary is marked as hierarchical.');
+    // Edit the vocabulary. This should not change the hierarchy value.
+    $edit = array();
+    $this->drupalPost('admin/structure/taxonomy/' . $this->vocabulary->machine_name . '/edit', $edit, t('Save'));
+    $vocab = end(entity_load('taxonomy_vocabulary', array($this->vocabulary->vid), array(), TRUE));
+    $this->assertEqual($vocab->hierarchy, 1, 'Vocabulary is marked as hierarchical.');
   }
 
   /**