diff --git a/src/diagonal.jl b/src/diagonal.jl
index b6e26249..7a304738 100644
--- a/src/diagonal.jl
+++ b/src/diagonal.jl
@@ -806,6 +806,11 @@ end
 
 kron(A::Diagonal, B::Diagonal) = Diagonal(kron(A.diag, B.diag))
 
+function kron!(C::Diagonal, A::Diagonal, B::Diagonal)
+    kron!(C.diag, A.diag, B.diag)
+    return C
+end
+
 function kron(A::Diagonal, B::SymTridiagonal)
     kdv = kron(A.diag, B.dv)
     # We don't need to drop the last element
diff --git a/test/diagonal.jl b/test/diagonal.jl
index 55d493e5..712f426c 100644
--- a/test/diagonal.jl
+++ b/test/diagonal.jl
@@ -1396,14 +1396,26 @@ end
 end
 
 @testset "kron! for Diagonal" begin
-    a = Diagonal([2,2])
-    b = Diagonal([1,1])
-    c = Diagonal([0,0,0,0])
-    kron!(c,b,a)
-    @test c == Diagonal([2,2,2,2])
-    c=Diagonal(Vector{Float64}(undef, 4))
-    kron!(c,a,b)
-    @test c == Diagonal([2,2,2,2])
+    a = Diagonal([1, 2])
+    b = Diagonal([3, 4])
+    # Diagonal out
+    c = Diagonal([0, 0, 0, 0])
+    kron!(c, b, a)
+    @test c == Diagonal([3, 6, 4, 8])
+    @test c == kron!(fill(0, 4, 4), Matrix(b), Matrix(a)) # against dense kron!
+    c = Diagonal(Vector{Float64}(undef, 4))
+    kron!(c, a, b)
+    @test c == Diagonal([3.0, 4.0, 6.0, 8.0])
+
+    # AbstractArray out
+    c = fill(0, 4, 4)
+    kron!(c, b, a) 
+    @test c == diagm([3, 6, 4, 8])
+    @test c == kron!(fill(0, 4, 4), Matrix(b), Matrix(a)) # against dense kron!
+    c = Matrix{Float64}(undef, 4, 4)
+    kron!(c, a, b)
+    @test c == diagm([3.0, 4.0, 6.0, 8.0])
+    @test_throws DimensionMismatch kron!(Diagonal(zeros(5)), Diagonal(zeros(2)), Diagonal(zeros(2)))
 end
 
 @testset "uppertriangular/lowertriangular" begin