diff --git a/NEWS b/NEWS
index 8310badb..e13cf957 100644
--- a/NEWS
+++ b/NEWS
@@ -32,6 +32,8 @@ What's new in psycopg 2.5.3
   happens for TCP connections instead (:ticket:`#196`).
 - Fixed overflow opening a lobject with an oid not fitting in a signed int
   (:ticket:`#203`).
+- Fixed handling of explicit default ``cursor_factory=None`` in
+  `connection.cursor()` (:ticket:`#210`).
 - Fixed possible segfault in named cursors creation.
 - Fixed debug build on Windows, thanks to James Emerton.
 
diff --git a/psycopg/connection_type.c b/psycopg/connection_type.c
index cb47b662..99235250 100644
--- a/psycopg/connection_type.c
+++ b/psycopg/connection_type.c
@@ -55,7 +55,7 @@ psyco_conn_cursor(connectionObject *self, PyObject *args, PyObject *kwargs)
     PyObject *obj = NULL;
     PyObject *rv = NULL;
     PyObject *name = Py_None;
-    PyObject *factory = (PyObject *)&cursorType;
+    PyObject *factory = Py_None;
     PyObject *withhold = Py_False;
     PyObject *scrollable = Py_None;
 
@@ -64,16 +64,21 @@ psyco_conn_cursor(connectionObject *self, PyObject *args, PyObject *kwargs)
 
     EXC_IF_CONN_CLOSED(self);
 
-    if (self->cursor_factory && self->cursor_factory != Py_None) {
-        factory = self->cursor_factory;
-    }
-
     if (!PyArg_ParseTupleAndKeywords(
             args, kwargs, "|OOOO", kwlist,
             &name, &factory, &withhold, &scrollable)) {
         goto exit;
     }
 
+    if (factory == Py_None) {
+        if (self->cursor_factory && self->cursor_factory != Py_None) {
+            factory = self->cursor_factory;
+        }
+        else {
+            factory = (PyObject *)&cursorType;
+        }
+    }
+
     if (self->status != CONN_STATUS_READY &&
         self->status != CONN_STATUS_BEGIN &&
         self->status != CONN_STATUS_PREPARED) {
diff --git a/tests/test_connection.py b/tests/test_connection.py
index a58d8eb6..21f7a499 100755
--- a/tests/test_connection.py
+++ b/tests/test_connection.py
@@ -249,6 +249,16 @@ class ConnectionTests(ConnectingTestCase):
         cur.execute("select 1 as a")
         self.assertRaises(TypeError, (lambda r: r['a']), cur.fetchone())
 
+    def test_cursor_factory_none(self):
+        # issue #210
+        conn = self.connect()
+        cur = conn.cursor(cursor_factory=None)
+        self.assertEqual(type(cur), psycopg2.extensions.cursor)
+
+        conn = self.connect(cursor_factory=psycopg2.extras.DictCursor)
+        cur = conn.cursor(cursor_factory=None)
+        self.assertEqual(type(cur), psycopg2.extras.DictCursor)
+
     def test_failed_init_status(self):
         class SubConnection(psycopg2.extensions.connection):
             def __init__(self, dsn):