diff --git a/fp/_mapping.js b/fp/_mapping.js
index a5de51640..e31a20313 100644
--- a/fp/_mapping.js
+++ b/fp/_mapping.js
@@ -70,7 +70,7 @@ exports.aryMethod = {
     'getOr', 'inRange', 'intersectionBy', 'intersectionWith', 'isEqualWith',
     'isMatchWith', 'mergeWith', 'orderBy', 'pullAllBy', 'pullAllWith', 'reduce',
     'reduceRight', 'replace', 'set', 'slice', 'sortedIndexBy', 'sortedLastIndexBy',
-    'transform', 'unionBy', 'unionWith', 'xorBy', 'xorWith', 'zipWith'
+    'transform', 'unionBy', 'unionWith', 'update', 'xorBy', 'xorWith', 'zipWith'
   ],
   '4': [
     'fill', 'setWith'
@@ -121,7 +121,8 @@ exports.iterateeAry = {
   'takeRightWhile': 1,
   'takeWhile': 1,
   'times': 1,
-  'transform': 2
+  'transform': 2,
+  'update': 1
 };
 
 /** Used to map method names to iteratee rearg configs. */
@@ -141,6 +142,7 @@ exports.methodRearg = {
   'setWith': [3, 1, 2, 0],
   'sortedIndexBy': [2, 1, 0],
   'sortedLastIndexBy': [2, 1, 0],
+  'update': [2, 1, 0],
   'zipWith': [1, 2, 0]
 };
 
@@ -175,7 +177,8 @@ exports.mutate = {
   'set': {
     'set': true,
     'setWith': true,
-    'unset': true
+    'unset': true,
+    'update': true
   }
 };
 
diff --git a/lodash.js b/lodash.js
index 43f2d5d88..67227155c 100644
--- a/lodash.js
+++ b/lodash.js
@@ -3449,6 +3449,19 @@
       return object;
     }
 
+    /**
+     * The base implementation of `_.update`.
+     *
+     * @private
+     * @param {Object} object The object to query.
+     * @param {Array|string} path The path of the property to update.
+     * @param {Function} updater The function to produce the updated value.
+     * @returns {Object} Returns `object`.
+     */
+    function baseUpdate(object, path, updater) {
+      return baseSet(object, path, updater(baseGet(object, path)));
+    }
+
     /**
      * The base implementation of `setData` without support for hot loop detection.
      *
@@ -11900,6 +11913,37 @@
       return object == null ? object : baseSet(object, path, value);
     }
 
+    /**
+     * Updates the value at `path` of `object` with given `func`. If a portion
+     * of `path` doesn't exist it's created. Arrays are created for missing index
+     * properties while objects are created for all other missing properties.
+     * The `func` is invoked with `value` at `path` of `object`: (value).
+     *
+     * @static
+     * @memberOf _
+     * @category Object
+     * @param {Object} object The object to modify.
+     * @param {Array|string} path The path of the property to set.
+     * @param {Function} updater The function to produce the updated value.
+     * @returns {Object} Returns the updated `object`.
+     * @example
+     *
+     * var object = { 'a': [{ 'b': { 'c': 3, 'd': '11' } }] };
+     *
+     * _.update(object, 'a[0].b.c', function(n) { return n + 10; });
+     * console.log(object.a[0].b.c);
+     * // => 13
+     *
+     * _.update(object, 'x[0].y.z', function(n) { return n ? n + 1 : 0; });
+     * console.log(object.x[0].y.z);
+     * // => 0
+     */
+    function update(object, path, updater) {
+      return object == null
+        ? object
+        : baseUpdate(object, path, baseCastFunction(updater));
+    }
+
     /**
      * This method is like `_.set` except that it accepts `customizer` which is
      * invoked to produce the objects of `path`.  If `customizer` returns `undefined`
@@ -14555,6 +14599,7 @@
     lodash.unset = unset;
     lodash.unzip = unzip;
     lodash.unzipWith = unzipWith;
+    lodash.update = update;
     lodash.values = values;
     lodash.valuesIn = valuesIn;
     lodash.without = without;
diff --git a/test/test-fp.js b/test/test-fp.js
index 6d0f86074..5ee2b11ae 100644
--- a/test/test-fp.js
+++ b/test/test-fp.js
@@ -563,7 +563,7 @@
         deepObject = { 'a': { 'b': 2, 'c': 3 } };
 
     QUnit.test('should not mutate values', function(assert) {
-      assert.expect(38);
+      assert.expect(40);
 
       function Foo() {}
       Foo.prototype = { 'b': 2 };
@@ -695,6 +695,12 @@
 
       assert.deepEqual(value, deepObject, 'fp.unset');
       assert.deepEqual(actual, { 'a': { 'c': 3 } }, 'fp.unset');
+
+      value = _.cloneDeep(deepObject);
+      actual = fp.update(function(x) { return x + 1; })('a.b')(value);
+
+      assert.deepEqual(value, deepObject, 'fp.update');
+      assert.deepEqual(actual, { 'a': { 'b': 3, 'c': 3 } }, 'fp.update');
     });
   }());
 
@@ -742,7 +748,7 @@
         deepObject = { 'a': { 'b': 2, 'c': 3 } };
 
     QUnit.test('should only clone objects in `path`', function(assert) {
-      assert.expect(8);
+      assert.expect(9);
 
       var object = { 'a': { 'b': { 'c': 1 }, 'd': { 'e': 1 } } },
           value = _.cloneDeep(object),
@@ -765,6 +771,10 @@
 
       assert.notOk('b' in actual, 'fp.unset');
       assert.strictEqual(actual.d, value.d, 'fp.unset');
+
+      value = _.cloneDeep(object);
+      actual = fp.update(function(x) { return { 'c2': 2 }; }, 'a.b', value);
+      assert.strictEqual(actual.d, value.d, 'fp.update');
     });
   }());
 
diff --git a/test/test.js b/test/test.js
index 2821b636d..6343a80f5 100644
--- a/test/test.js
+++ b/test/test.js
@@ -18439,6 +18439,25 @@
 
   /*--------------------------------------------------------------------------*/
 
+  QUnit.module('lodash.update');
+
+  (function() {
+    QUnit.test('should call `func` with existing value on `path` of `object` and update it', function(assert) {
+      assert.expect(2);
+
+      var object = { 'a': [{ 'b': { 'c': 10 } }] };
+
+      _.update(object, ['a', 0, 'b', 'c'], function(value) {
+        assert.equal(value, 10);
+        return 20;
+      });
+
+      assert.equal(object.a[0].b.c, 20);
+    });
+  }());
+
+  /*--------------------------------------------------------------------------*/
+
   QUnit.module('set methods');
 
   lodashStable.each(['set', 'setWith'], function(methodName) {
@@ -24389,7 +24408,7 @@
     var acceptFalsey = lodashStable.difference(allMethods, rejectFalsey);
 
     QUnit.test('should accept falsey arguments', function(assert) {
-      assert.expect(298);
+      assert.expect(299);
 
       var emptyArrays = lodashStable.map(falsey, alwaysEmptyArray);