diff --git a/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/actual.js b/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/actual.js
new file mode 100644
index 0000000000..50162d7db8
--- /dev/null
+++ b/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/actual.js
@@ -0,0 +1 @@
+<div children="foo">bar</div>;
diff --git a/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/expected.js b/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/expected.js
new file mode 100644
index 0000000000..e9eb914ecc
--- /dev/null
+++ b/packages/babel-core/test/fixtures/transformation/optimisation.react.inline-elements/children-exists/expected.js
@@ -0,0 +1,11 @@
+({
+  $$typeof: babelHelpers.typeofReactElement,
+  type: "div",
+  key: null,
+  ref: null,
+  props: {
+    children: "foo",
+    children: "bar"
+  },
+  _owner: null
+});
diff --git a/packages/babel-plugin-transform-react-inline-elements/src/index.js b/packages/babel-plugin-transform-react-inline-elements/src/index.js
index 112c47af4f..93fc13c2f3 100644
--- a/packages/babel-plugin-transform-react-inline-elements/src/index.js
+++ b/packages/babel-plugin-transform-react-inline-elements/src/index.js
@@ -42,14 +42,6 @@ export default function ({ types: t }) {
           objProps.push(t.objectProperty(key, value));
         }
 
-        if (node.children.length) {
-          let children = t.react.buildChildren(node);
-          if (children.length) {
-            children = children.length === 1 ? children[0] : t.arrayExpression(children);
-            pushProp(props.properties, t.identifier("children"), children);
-          }
-        }
-
         // props
         for (let attr of (open.attributes: Array<Object>)) {
           if (isJSXAttributeOfName(attr, "key")) {
@@ -61,6 +53,14 @@ export default function ({ types: t }) {
           }
         }
 
+        if (node.children.length) {
+          let children = t.react.buildChildren(node);
+          if (children.length) {
+            children = children.length === 1 ? children[0] : t.arrayExpression(children);
+            pushProp(props.properties, t.identifier("children"), children);
+          }
+        }
+
         if (isComponent) {
           props = t.callExpression(file.addHelper("defaultProps"), [t.memberExpression(type, t.identifier("defaultProps")), props]);
         }