diff --git a/doc/source/release.rst b/doc/source/release.rst
index fa1d1bef333d4..267f373a9e534 100644
--- a/doc/source/release.rst
+++ b/doc/source/release.rst
@@ -222,6 +222,7 @@ Bug Fixes
 - Bug in preserving frequency across Timestamp addition/subtraction (:issue:`4547`)
 - Bug in indexing: empty list lookup caused ``IndexError`` exceptions (:issue:`6536`, :issue:`6551`)
 - Series.quantile raising on an ``object`` dtype (:issue:`6555`)
+- Bug in ``.xs`` with a ``nan`` in level when dropped (:issue:`6574`)
 
 pandas 0.13.1
 -------------
diff --git a/pandas/core/index.py b/pandas/core/index.py
index 30e18d239d950..3bc3783fffcbd 100644
--- a/pandas/core/index.py
+++ b/pandas/core/index.py
@@ -2947,7 +2947,13 @@ def droplevel(self, level=0):
             new_names.pop(i)
 
         if len(new_levels) == 1:
+
+            # set nan if needed
+            mask = new_labels[0] == -1
             result = new_levels[0].take(new_labels[0])
+            if mask.any():
+                np.putmask(result, mask, np.nan)
+
             result.name = new_names[0]
             return result
         else:
diff --git a/pandas/tests/test_multilevel.py b/pandas/tests/test_multilevel.py
index 1e1d91d0db866..96272bab18dc2 100644
--- a/pandas/tests/test_multilevel.py
+++ b/pandas/tests/test_multilevel.py
@@ -391,6 +391,22 @@ def test_xs(self):
         assert_series_equal(xs, xs2)
         assert_almost_equal(xs.values, self.frame.values[4])
 
+        # GH 6574
+        # missing values in returned index should be preserrved
+        acc = [
+            ('a','abcde',1),
+            ('b','bbcde',2),
+            ('y','yzcde',25),
+            ('z','xbcde',24),
+            ('z',None,26),
+            ('z','zbcde',25),
+            ('z','ybcde',26),
+            ]
+        df = DataFrame(acc, columns=['a1','a2','cnt']).set_index(['a1','a2'])
+        expected = DataFrame({ 'cnt' : [24,26,25,26] }, index=Index(['xbcde',np.nan,'zbcde','ybcde'],name='a2'))
+        result = df.xs('z',level='a1')
+        assert_frame_equal(result, expected)
+
     def test_xs_partial(self):
         result = self.frame.xs('foo')
         result2 = self.frame.ix['foo']