diff --git a/CHANGES.md b/CHANGES.md
index 18227415a84..f832982b514 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -3,6 +3,10 @@
 
 ## CKEditor 4.11.3
 
+Fixed Issues:
+
+* [#2721](https://github.com/ckeditor/ckeditor-dev/issues/2721): Fixed: Sublist items are reversed when higher level list item is removed.
+
 ## CKEditor 4.11.2
 
 Fixed Issues:
diff --git a/plugins/list/plugin.js b/plugins/list/plugin.js
index f31c633b61d..3ab817f5c88 100755
--- a/plugins/list/plugin.js
+++ b/plugins/list/plugin.js
@@ -533,6 +533,7 @@
 			child.remove();
 
 			refNode ? child[ forward ? 'insertBefore' : 'insertAfter' ]( refNode ) : into.append( child, forward );
+			refNode = child;
 		}
 	}
 
diff --git a/tests/plugins/list/list.js b/tests/plugins/list/list.js
index c3839840f81..bc0e54b7d97 100644
--- a/tests/plugins/list/list.js
+++ b/tests/plugins/list/list.js
@@ -212,5 +212,18 @@ bender.test( {
 		bot.setHtmlWithSelection( '<ul><li><table><tr><td>^foo</td></tr></table></li></ul>' );
 		var bList = ed.getCommand( 'bulletedlist' );
 		assert.areSame( CKEDITOR.TRISTATE_OFF, bList.state, 'check numbered list inactive' );
+	},
+
+	// #2721
+	'test sublist order after removing higher order sublist': function() {
+		var bot = this.editorBots.editor1,
+			editor = bot.editor;
+
+		bot.setHtmlWithSelection( '<ol><li>test<ol><li>^<ol><li>a</li><li>b</li><li>c</li></ol></li></ol></li></ol>' );
+		editor.fire( 'key', {
+			domEvent: new CKEDITOR.dom.event( { keyCode: 8 } )
+		} );
+
+		assert.areSame( '<ol><li>test<ol><li>a</li><li>b</li><li>c</li></ol></li></ol>', bender.tools.compatHtml( editor.getData() ) );
 	}
 } );
diff --git a/tests/plugins/list/manual/sublistreverse.html b/tests/plugins/list/manual/sublistreverse.html
new file mode 100644
index 00000000000..e6be6a9dc73
--- /dev/null
+++ b/tests/plugins/list/manual/sublistreverse.html
@@ -0,0 +1,23 @@
+<textarea id="editor">
+	<ol>
+		<li>test
+		<ol>
+			<li>$
+			<ol>
+				<li>a</li>
+				<li>b</li>
+				<li>c</li>
+			</ol>
+			</li>
+		</ol>
+		</li>
+	</ol>
+</textarea>
+
+<script>
+	// Ignore until #2737 is resolved.
+	if ( CKEDITOR.env.edge ) {
+		bender.ignore();
+	}
+	CKEDITOR.replace( 'editor' );
+</script>
diff --git a/tests/plugins/list/manual/sublistreverse.md b/tests/plugins/list/manual/sublistreverse.md
new file mode 100644
index 00000000000..850f97f83ae
--- /dev/null
+++ b/tests/plugins/list/manual/sublistreverse.md
@@ -0,0 +1,32 @@
+@bender-tags: bug, 2721, 4.11.3
+@bender-ui: collapsed
+@bender-ckeditor-plugins: wysiwygarea, toolbar, list, sourcearea, undo, elementspath
+
+1. Place caret in list after dollar symbol (`$`).
+1. Press <kbd>Backspace</kbd> two times (once in IE).
+
+## Expected
+
+Sublist is ordered alphabetically:
+
+```
+1. Test
+	1. a
+	2. b
+	3. c
+```
+
+## Unexpected
+
+Sublist order is reversed:
+
+```
+1. Test
+	1. c
+	2. b
+	3. a
+```
+
+## Note
+
+There is known upstream issue on IE [#2774](https://github.com/ckeditor/ckeditor-dev/issues/2774) when after pressing <kbd>Backspace</kbd> only `li` element is removed and `ol` is preserved. This results in incorrect markup `ol > li > ol > ol > li`.