diff --git oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/segment/SegmentWriter.java oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/segment/SegmentWriter.java
index abab3d4..ab762f7 100644
--- oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/segment/SegmentWriter.java
+++ oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/segment/SegmentWriter.java
@@ -595,7 +595,12 @@ public class SegmentWriter {
         byte[] data = reference.getBytes(Charsets.UTF_8);
         int length = data.length;
 
-        checkArgument(length < 8192);
+        // When writing a binary ID, the four most significant bits of the
+        // length field should be "1110", leaving 12 other bits to store the
+        // length itself. This means that the values of the length field can
+        // only range between 0 and 2^12 - 1.
+
+        checkArgument(length < 4096);
 
         RecordId id = prepare(RecordType.VALUE, 2 + length);
         int len = length | 0xE000;
diff --git oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/segment/file/ExternalBlobReferenceTest.java oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/segment/file/ExternalBlobReferenceTest.java
new file mode 100644
index 0000000..afb5a0f
--- /dev/null
+++ oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/segment/file/ExternalBlobReferenceTest.java
@@ -0,0 +1,127 @@
+/*
+ * Licensed to the Apache Software Foundation (ASF) under one or more
+ * contributor license agreements.  See the NOTICE file distributed with
+ * this work for additional information regarding copyright ownership.
+ * The ASF licenses this file to You under the Apache License, Version 2.0
+ * (the "License"); you may not use this file except in compliance with
+ * the License.  You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.apache.jackrabbit.oak.plugins.segment.file;
+
+import com.google.common.base.Strings;
+import org.apache.jackrabbit.oak.plugins.segment.Segment;
+import org.apache.jackrabbit.oak.plugins.segment.SegmentBlob;
+import org.apache.jackrabbit.oak.spi.blob.BlobStore;
+import org.junit.After;
+import org.junit.Before;
+import org.junit.Rule;
+import org.junit.Test;
+import org.junit.rules.TemporaryFolder;
+
+import java.io.InputStream;
+import java.util.Random;
+
+import static org.junit.Assert.assertEquals;
+import static org.mockito.Matchers.any;
+import static org.mockito.Mockito.doReturn;
+import static org.mockito.Mockito.mock;
+
+public class ExternalBlobReferenceTest {
+
+    @Rule
+    public TemporaryFolder segmentFolder = new TemporaryFolder();
+
+    private FileStore fileStore;
+
+    private BlobStore blobStore;
+
+    @Before
+    public void createFileStore() throws Exception {
+        blobStore = mock(BlobStore.class);
+        fileStore = FileStore.newFileStore(segmentFolder.getRoot()).withBlobStore(blobStore).create();
+    }
+
+    @After
+    public void destroyFileStore() throws Exception {
+        fileStore.close();
+    }
+
+    /**
+     * The {@code SegmentWriter} should be able to write blob IDs whose length
+     * is between 0 and 4095 bytes. It should be possible to correctly read the
+     * blob ID back and pass it to the {@code BlobStore} to obtain information
+     * about the blob.
+     * <p/>
+     * This code path executes only if the written stream is {@code
+     * Segment.MEDIUM_LIMIT} bytes long (or more). If the length of the stream
+     * is smaller, the binary value is inlined in the segment and the {@code
+     * BlobStore} is never called.
+     * <p/>
+     * See OAK-3105.
+     */
+    @Test
+    public void testBlobIdLengthUpperLimit() throws Exception {
+        String blobId = Strings.repeat("x", 4095);
+        long blobLength = Segment.MEDIUM_LIMIT;
+
+        doReturn(blobId).when(blobStore).writeBlob(any(InputStream.class));
+        doReturn(blobLength).when(blobStore).getBlobLength(blobId);
+
+        SegmentBlob blob = fileStore.getTracker().getWriter().writeStream(newRandomInputStream(blobLength));
+
+        assertEquals(blobLength, blob.length());
+    }
+
+    /**
+     * If the {@code BlobStore} returns a blob ID whose length is 4096 byes long
+     * (or more), writing the stream should throw an {@code
+     * IllegalArgumentException}.
+     * <p/>
+     * This code path executes only if the written stream is {@code
+     * Segment.MEDIUM_LIMIT} bytes long (or more). If the length of the stream
+     * is smaller, the binary value is inlined in the segment and the {@code
+     * BlobStore} is never called.
+     * <p/>
+     * See OAK-3105.
+     */
+    @Test(expected = IllegalArgumentException.class)
+    public void testBlobIdLengthLongerThanUpperLimit() throws Exception {
+        String blobId = Strings.repeat("x", 4096);
+        long blobLength = Segment.MEDIUM_LIMIT;
+
+        doReturn(blobId).when(blobStore).writeBlob(any(InputStream.class));
+
+        fileStore.getTracker().getWriter().writeStream(newRandomInputStream(blobLength));
+    }
+
+    private InputStream newRandomInputStream(final long size) {
+        return new InputStream() {
+
+            private Random random = new Random();
+
+            private int read = 0;
+
+            @Override
+            public int read() {
+                if (read >= size) {
+                    return -1;
+                }
+
+                read += 1;
+
+                return random.nextInt() & 0xFF;
+            }
+
+        };
+    }
+
+}