diff --git a/include/mysql/service_wsrep.h b/include/mysql/service_wsrep.h
index cf94364c1cf82..4168b133a4853 100644
--- a/include/mysql/service_wsrep.h
+++ b/include/mysql/service_wsrep.h
@@ -8,6 +8,11 @@ enum Wsrep_service_key_type
     WSREP_SERVICE_KEY_UPDATE,
     WSREP_SERVICE_KEY_EXCLUSIVE
 };
+	
+
+/* the bits in the bitmask for disabling temporarily some asserts */
+#define  WSREP_ASSERT_INNODB_TRX   1
+
 
 #if (defined (MYSQL_DYNAMIC_PLUGIN) && defined(MYSQL_SERVICE_WSREP_DYNAMIC_INCLUDED)) || (!defined(MYSQL_DYNAMIC_PLUGIN) && defined(MYSQL_SERVICE_WSREP_STATIC_INCLUDED))
 
@@ -64,6 +69,7 @@ extern struct wsrep_service_st {
   bool                        (*wsrep_thd_ignore_table_func)(MYSQL_THD thd);
   long long                   (*wsrep_thd_trx_seqno_func)(const MYSQL_THD thd);
   my_bool                     (*wsrep_thd_is_aborting_func)(const MYSQL_THD thd);
+  my_bool                     (*wsrep_thd_in_rollback_func)(const THD *thd);
   void                        (*wsrep_set_data_home_dir_func)(const char *data_dir);
   my_bool                     (*wsrep_thd_is_BF_func)(const MYSQL_THD thd, my_bool sync);
   my_bool                     (*wsrep_thd_is_local_func)(const MYSQL_THD thd);
@@ -123,6 +129,7 @@ extern struct wsrep_service_st {
 #define wsrep_set_data_home_dir(A) wsrep_service->wsrep_set_data_home_dir_func(A)
 #define wsrep_thd_is_BF(T,S) wsrep_service->wsrep_thd_is_BF_func(T,S)
 #define wsrep_thd_is_aborting(T) wsrep_service->wsrep_thd_is_aborting_func(T)
+#define wsrep_thd_in_rollback_func(T) wsrep_service->wsrep_thd_in_rollback_func(T)
 #define wsrep_thd_is_local(T) wsrep_service->wsrep_thd_is_local_func(T)
 #define wsrep_thd_self_abort(T) wsrep_service->wsrep_thd_self_abort_func(T)
 #define wsrep_thd_append_key(T,W,N,K) wsrep_service->wsrep_thd_append_key_func(T,W,N,K)
@@ -225,6 +232,8 @@ extern "C" my_bool wsrep_thd_order_before(const MYSQL_THD left, const MYSQL_THD
 extern "C" my_bool wsrep_thd_skip_locking(const MYSQL_THD thd);
 /* Return true if thd is aborting */
 extern "C" my_bool wsrep_thd_is_aborting(const MYSQL_THD thd);
+/* Return true if thd is a WSREP applier rolling back a transaction locally */
+extern "C" my_bool wsrep_thd_in_rollback(const MYSQL_THD thd);
 
 struct wsrep_key;
 struct wsrep_key_array;
diff --git a/mysql-test/suite/galera/r/mdev-36554.result b/mysql-test/suite/galera/r/mdev-36554.result
new file mode 100644
index 0000000000000..c4271093c1f89
--- /dev/null
+++ b/mysql-test/suite/galera/r/mdev-36554.result
@@ -0,0 +1,25 @@
+connection node_2;
+connection node_1;
+CALL mtr.add_suppression("Event .* Update_rows.* apply failed");
+CALL mtr.add_suppression("mariadbd: Can't find record in 't1'");
+CALL mtr.add_suppression("Failed to apply write set.*");
+CALL mtr.add_suppression("Inconsistency detected");
+connection node_1;
+CREATE TABLE t1 (f1 INTEGER);
+INSERT INTO t1 VALUES (1);
+connection node_2;
+SET SESSION wsrep_on = OFF;
+DELETE FROM t1;
+SET SESSION wsrep_on = ON;
+SET GLOBAL wsrep_applier_retry_count=1;
+connection node_1;
+UPDATE t1 SET f1 = f1 + 1;
+connection node_2;
+Shutting down server ...
+SET wsrep_on=OFF;
+Restarting server ...
+connection node_1;
+SET wsrep_sync_wait=0;
+connection node_1;
+SET GLOBAL wsrep_applier_retry_count = 0;
+DROP TABLE t1;
diff --git a/mysql-test/suite/galera/t/mdev-36554.test b/mysql-test/suite/galera/t/mdev-36554.test
new file mode 100644
index 0000000000000..f2a57c6e242c8
--- /dev/null
+++ b/mysql-test/suite/galera/t/mdev-36554.test
@@ -0,0 +1,45 @@
+#
+# Test for MDEV-36554
+#
+
+--source include/galera_cluster.inc
+
+CALL mtr.add_suppression("Event .* Update_rows.* apply failed");
+CALL mtr.add_suppression("mariadbd: Can't find record in 't1'");
+CALL mtr.add_suppression("Failed to apply write set.*");
+CALL mtr.add_suppression("Inconsistency detected");
+
+--connection node_1
+CREATE TABLE t1 (f1 INTEGER);
+INSERT INTO t1 VALUES (1);
+
+--connection node_2
+SET SESSION wsrep_on = OFF;
+DELETE FROM t1;
+SET SESSION wsrep_on = ON;
+SET GLOBAL wsrep_applier_retry_count=1;
+
+--connection node_1
+UPDATE t1 SET f1 = f1 + 1;
+
+# restart node 2
+--connection node_2
+--echo Shutting down server ...
+SET wsrep_on=OFF;
+--source include/shutdown_mysqld.inc
+--source include/wait_until_disconnected.inc
+--remove_file $MYSQLTEST_VARDIR/mysqld.2/data/grastate.dat
+--echo Restarting server ...
+--source include/start_mysqld.inc
+
+# wait till node 2 is back in the cluster
+--connection node_1
+SET wsrep_sync_wait=0;
+--let $wait_condition = SELECT VARIABLE_VALUE = 2 FROM performance_schema.global_status WHERE VARIABLE_NAME = 'wsrep_cluster_size'
+--source include/wait_condition.inc
+
+# cleanup
+--connection node_1
+SET GLOBAL wsrep_applier_retry_count = 0;
+DROP TABLE t1;
+
diff --git a/sql/service_wsrep.cc b/sql/service_wsrep.cc
index d58a05b3eb54e..d5646fa3cb06f 100644
--- a/sql/service_wsrep.cc
+++ b/sql/service_wsrep.cc
@@ -295,6 +295,22 @@ extern "C" my_bool wsrep_thd_is_aborting(const MYSQL_THD thd)
   return false;
 }
 
+/** Check if a wsrep applier is rolling back a transaction locally.
+
+This function is used for notifying InnoDB routines that this thread
+is rolling back a wsrep transaction locally.
+
+@param thd         thread handle
+
+@return true       if wsrep applier is rolling back a transaction locally
+@return false      otherwise
+
+*/
+extern "C" my_bool wsrep_thd_in_rollback(const THD *thd)
+{
+  return thd->wsrep_applier_is_in_rollback();
+}
+
 static inline enum wsrep::key::type
 map_key_type(enum Wsrep_service_key_type type)
 {
diff --git a/sql/sql_class.cc b/sql/sql_class.cc
index 08354e0fa2db3..685dbd4e9c7ad 100644
--- a/sql/sql_class.cc
+++ b/sql/sql_class.cc
@@ -742,6 +742,7 @@ THD::THD(my_thread_id id, bool is_wsrep_applier)
    ,
    wsrep_applier(is_wsrep_applier),
    wsrep_applier_closing(false),
+   wsrep_applier_in_rollback(false),
    wsrep_client_thread(false),
    wsrep_retry_counter(0),
    wsrep_PA_safe(true),
diff --git a/sql/sql_class.h b/sql/sql_class.h
index c9e6d8d5f2d0e..17fc9fe90cbd3 100644
--- a/sql/sql_class.h
+++ b/sql/sql_class.h
@@ -5641,6 +5641,8 @@ class THD: public THD_count, /* this must be first */
 #ifdef WITH_WSREP
   bool                      wsrep_applier; /* dedicated slave applier thread */
   bool                      wsrep_applier_closing; /* applier marked to close */
+  bool                      wsrep_applier_in_rollback; /* applier is rolling
+                                                          back a transaction */
   bool                      wsrep_client_thread; /* to identify client threads*/
   query_id_t                wsrep_last_query_id;
   XID                       wsrep_xid;
@@ -5720,7 +5722,6 @@ class THD: public THD_count, /* this must be first */
     return m_wsrep_client_state.transaction().id().get();
   }
 
-
   /*
     Set next trx id
    */
@@ -5760,6 +5761,8 @@ class THD: public THD_count, /* this must be first */
   Wsrep_applier_service* wsrep_applier_service;
   /* wait_for_commit struct for binlog group commit */
   wait_for_commit wsrep_wfc;
+  bool wsrep_applier_is_in_rollback() const
+  { return wsrep_applier_in_rollback; }
 #endif /* WITH_WSREP */
 
   /* Handling of timeouts for commands */
diff --git a/sql/sql_plugin_services.inl b/sql/sql_plugin_services.inl
index 2114f3560a7ec..6cf8514216edb 100644
--- a/sql/sql_plugin_services.inl
+++ b/sql/sql_plugin_services.inl
@@ -159,6 +159,7 @@ static struct wsrep_service_st wsrep_handler = {
   wsrep_thd_ignore_table,
   wsrep_thd_trx_seqno,
   wsrep_thd_is_aborting,
+  wsrep_thd_in_rollback,
   wsrep_set_data_home_dir,
   wsrep_thd_is_BF,
   wsrep_thd_is_local,
diff --git a/sql/wsrep_applier.cc b/sql/wsrep_applier.cc
index 31a28ac4d4164..580630a1147dd 100644
--- a/sql/wsrep_applier.cc
+++ b/sql/wsrep_applier.cc
@@ -292,11 +292,14 @@ int wsrep_apply_events(THD*                       thd,
 
     /* rollback to savepoint without telling Wsrep-lib */
     thd->variables.wsrep_on = false;
+    thd->wsrep_applier_in_rollback= true;
     if (FALSE != trans_rollback_to_savepoint(thd, savepoint)) {
       thd->variables.wsrep_on = true;
+      thd->wsrep_applier_in_rollback= false;
       break;
     }
     thd->variables.wsrep_on = true;
+    thd->wsrep_applier_in_rollback= false;
 
     /* reset THD object for retry */
     thd->clear_error();
diff --git a/sql/wsrep_dummy.cc b/sql/wsrep_dummy.cc
index 8762dd9907e19..95949b9adffdf 100644
--- a/sql/wsrep_dummy.cc
+++ b/sql/wsrep_dummy.cc
@@ -94,6 +94,9 @@ long long wsrep_thd_trx_seqno(const THD *)
 my_bool wsrep_thd_is_aborting(const THD *)
 { return 0; }
 
+my_bool wsrep_thd_in_rollback(const THD *)
+{ return 0; }
+
 void wsrep_set_data_home_dir(const char *)
 { }
 
diff --git a/storage/innobase/trx/trx0trx.cc b/storage/innobase/trx/trx0trx.cc
index 55c283859cbfc..f4b9446c633f6 100644
--- a/storage/innobase/trx/trx0trx.cc
+++ b/storage/innobase/trx/trx0trx.cc
@@ -1501,7 +1501,11 @@ TRANSACTIONAL_INLINE inline void trx_t::commit_in_memory(const mtr_t *mtr)
     trx_finalize_for_fts(this, undo_no != 0);
 
 #ifdef WITH_WSREP
-  ut_ad(is_wsrep() == wsrep_on(mysql_thd));
+  /* Assert that any transaction which is started as a wsrep
+     transaction, also commits or rolls back as a wsrep
+     transaction. Wsrep applier may turn wsrep off temporarily for
+     rollback when the applying of wsrep transactions is retried. */
+  ut_ad(is_wsrep() == wsrep_on(mysql_thd) || wsrep_thd_in_rollback(mysql_thd));
 
   /* Serialization history has been written and the transaction is
   committed in memory, which makes this commit ordered. Release commit