diff --git a/components/nif/data.hpp b/components/nif/data.hpp
index 5efd0d6c99..f3b5a27f8f 100644
--- a/components/nif/data.hpp
+++ b/components/nif/data.hpp
@@ -272,7 +272,7 @@ class NiSkinData : public Record
 public:
     struct BoneTrafo
     {
-        Ogre::Matrix3 rotation; // Rotation offset from bone?
+        Ogre::Matrix3 rotationScale; // Rotation offset from bone, non-uniform scale
         Ogre::Vector3 trans;    // Translation
         float scale;            // Probably scale (always 1)
     };
@@ -295,7 +295,7 @@ public:
 
     void read(NIFStream *nif)
     {
-        trafo.rotation = nif->getMatrix3();
+        trafo.rotationScale = nif->getMatrix3();
         trafo.trans = nif->getVector3();
         trafo.scale = nif->getFloat();
 
@@ -307,7 +307,7 @@ public:
         {
             BoneInfo &bi = bones[i];
 
-            bi.trafo.rotation = nif->getMatrix3();
+            bi.trafo.rotationScale = nif->getMatrix3();
             bi.trafo.trans = nif->getVector3();
             bi.trafo.scale = nif->getFloat();
             bi.unknown = nif->getVector4();
diff --git a/components/nif/nifstream.hpp b/components/nif/nifstream.hpp
index e62193a24e..c1b169ac88 100644
--- a/components/nif/nifstream.hpp
+++ b/components/nif/nifstream.hpp
@@ -133,7 +133,7 @@ public:
     {
         Transformation t;
         t.pos = getVector3();
-        t.rotation = getMatrix3();
+        t.rotationScale = getMatrix3();
         t.scale = getFloat();
         return t;
     }
diff --git a/components/nif/niftypes.hpp b/components/nif/niftypes.hpp
index 786c48b65e..f9235ec45d 100644
--- a/components/nif/niftypes.hpp
+++ b/components/nif/niftypes.hpp
@@ -35,7 +35,7 @@ namespace Nif
 struct Transformation
 {
     Ogre::Vector3 pos;
-    Ogre::Matrix3 rotation;
+    Ogre::Matrix3 rotationScale;
     float scale;
 
     static const Transformation& getIdentity()
diff --git a/components/nif/node.cpp b/components/nif/node.cpp
index b7ca981133..7529e602d9 100644
--- a/components/nif/node.cpp
+++ b/components/nif/node.cpp
@@ -42,8 +42,9 @@ void Node::getProperties(const Nif::NiTexturingProperty *&texprop,
 
 Ogre::Matrix4 Node::getLocalTransform() const
 {
-    Ogre::Matrix4 mat4 = Ogre::Matrix4(Ogre::Matrix4::IDENTITY);
-    mat4.makeTransform(trafo.pos, Ogre::Vector3(trafo.scale), Ogre::Quaternion(trafo.rotation));
+    Ogre::Matrix4 mat4 = Ogre::Matrix4(trafo.rotationScale);
+    mat4.setTrans(trafo.pos);
+    mat4.setScale(Ogre::Vector3(trafo.rotationScale[0][0], trafo.rotationScale[1][1], trafo.rotationScale[2][2]) * trafo.scale);
     return mat4;
 }
 
diff --git a/components/nifogre/mesh.cpp b/components/nifogre/mesh.cpp
index af73df637d..c952e664db 100644
--- a/components/nifogre/mesh.cpp
+++ b/components/nifogre/mesh.cpp
@@ -138,9 +138,10 @@ void NIFMeshLoader::createSubMesh(Ogre::Mesh *mesh, const Nif::NiTriShape *shape
         const Nif::NodeList &bones = skin->bones;
         for(size_t b = 0;b < bones.length();b++)
         {
-            Ogre::Matrix4 mat;
-            mat.makeTransform(data->bones[b].trafo.trans, Ogre::Vector3(data->bones[b].trafo.scale),
-                              Ogre::Quaternion(data->bones[b].trafo.rotation));
+            const Ogre::Matrix3& rotationScale = data->bones[b].trafo.rotationScale;
+            Ogre::Matrix4 mat (rotationScale);
+            mat.setTrans(data->bones[b].trafo.trans);
+            mat.setScale(Ogre::Vector3(rotationScale[0][0], rotationScale[1][1], rotationScale[2][2]) * data->bones[b].trafo.scale);
             mat = bones[b]->getWorldTransform() * mat;
 
             const std::vector<Nif::NiSkinData::VertWeight> &weights = data->bones[b].weights;
diff --git a/components/nifogre/skeleton.cpp b/components/nifogre/skeleton.cpp
index 9e12eec905..4f6921d89d 100644
--- a/components/nifogre/skeleton.cpp
+++ b/components/nifogre/skeleton.cpp
@@ -36,9 +36,17 @@ void NIFSkeletonLoader::buildBones(Ogre::Skeleton *skel, const Nif::Node *node,
     if(parent) parent->addChild(bone);
     mNifToOgreHandleMap[node->recIndex] = bone->getHandle();
 
-    bone->setOrientation(node->trafo.rotation);
-    bone->setPosition(node->trafo.pos);
-    bone->setScale(Ogre::Vector3(node->trafo.scale));
+    // decompose the local transform into position, scale and orientation.
+    // this is required for cases where the rotationScale matrix includes scaling, which the NIF format allows :(
+    // the code would look a bit nicer if Ogre allowed setting the transform matrix of a Bone directly, but we can't do that.
+    Ogre::Matrix4 mat(node->getLocalTransform());
+    Ogre::Vector3 position, scale;
+    Ogre::Quaternion orientation;
+    mat.decomposition(position, scale, orientation);
+    bone->setOrientation(orientation);
+    bone->setPosition(position);
+    bone->setScale(scale);
+
     bone->setBindingPose();
 
     if(!(node->recType == Nif::RC_NiNode || /* Nothing special; children traversed below */