diff --git a/release-notes/CREDITS-2.x b/release-notes/CREDITS-2.x
index 6a3a95861..96e8ad722 100644
--- a/release-notes/CREDITS-2.x
+++ b/release-notes/CREDITS-2.x
@@ -252,6 +252,12 @@ Arthur Chan (@arthurscchan)
 
 Alex H (@ahcodedthat)
 
-* Contribtued #643: XML serialization of floating-point infinity is incompatible
+* Contributed #643: XML serialization of floating-point infinity is incompatible
   with JAXB and XML Schema
  (2.17.0)
+
+Bas Passon (@bpasson)
+
+* Reported, contributed fix for #646: Deserializing fails when using builder classes
+  with `Iterable` Collection setters
+ (2.17.1)
diff --git a/release-notes/VERSION-2.x b/release-notes/VERSION-2.x
index 6cb43bddf..bacd95994 100644
--- a/release-notes/VERSION-2.x
+++ b/release-notes/VERSION-2.x
@@ -8,6 +8,11 @@ Project: jackson-dataformat-xml
 
 No changes since 2.17
 
+2.17.1 (not yet released)
+
+#646: Deserializing fails when using builder classes with `Iterable` Collection setters
+ (fix contributed by Bas P)
+
 2.17.0 (12-Mar-2024)
 
 #324: Support use of `xsi:type` for polymorphic serialization
diff --git a/src/main/java/com/fasterxml/jackson/dataformat/xml/util/TypeUtil.java b/src/main/java/com/fasterxml/jackson/dataformat/xml/util/TypeUtil.java
index fdfc8d242..722c4709a 100644
--- a/src/main/java/com/fasterxml/jackson/dataformat/xml/util/TypeUtil.java
+++ b/src/main/java/com/fasterxml/jackson/dataformat/xml/util/TypeUtil.java
@@ -11,7 +11,8 @@ public class TypeUtil
     public static boolean isIndexedType(JavaType type)
     {
         Class<?> cls = type.getRawClass();
-        if (type.isContainerType() || type.isIterationType()) {
+        // 25-Mar-2024, tatu [dataformat-xml#646]: Need to support Iterable too
+        if (type.isContainerType() || type.isIterationType() || cls == Iterable.class) {
             // One special case; byte[] will be serialized as base64-encoded String, not real array, so:
             // (actually, ditto for char[]; thought to be a String)
             if (cls == byte[].class || cls == char[].class) {
diff --git a/src/test/java/com/fasterxml/jackson/dataformat/xml/lists/IterableCollectionBuilder646Test.java b/src/test/java/com/fasterxml/jackson/dataformat/xml/lists/IterableCollectionBuilder646Test.java
new file mode 100644
index 000000000..55ba423a9
--- /dev/null
+++ b/src/test/java/com/fasterxml/jackson/dataformat/xml/lists/IterableCollectionBuilder646Test.java
@@ -0,0 +1,88 @@
+package com.fasterxml.jackson.dataformat.xml.lists;
+
+import java.util.ArrayList;
+import java.util.List;
+
+import com.fasterxml.jackson.annotation.JsonProperty;
+import com.fasterxml.jackson.databind.annotation.JsonDeserialize;
+import com.fasterxml.jackson.dataformat.xml.XmlMapper;
+import com.fasterxml.jackson.dataformat.xml.XmlTestBase;
+import com.fasterxml.jackson.dataformat.xml.annotation.JacksonXmlElementWrapper;
+import com.fasterxml.jackson.dataformat.xml.annotation.JacksonXmlRootElement;
+
+// [dataformat-xml#646]
+public class IterableCollectionBuilder646Test extends XmlTestBase
+{
+	@JsonDeserialize(builder = Parent.Builder.class)
+	@JacksonXmlRootElement(localName = "parent")
+	static class Parent {
+		private final List<Child> children;
+
+		Parent(List<Child> children) {
+			this.children = children;
+		}
+
+		@JsonProperty("child")
+		@JacksonXmlElementWrapper(useWrapping = false)
+		public List<Child> getChildren() {
+			return children;
+		}
+
+		static class Builder {
+			private final List<Child> children = new ArrayList<>();
+
+			@JsonProperty("child")
+			@JacksonXmlElementWrapper(useWrapping = false)
+			public Builder children(Iterable<Child> children) {
+				for (Child c : children) {
+					this.children.add(c);
+				}
+				return this;
+			}
+
+			public Parent build() {
+				return new Parent(children);
+			}
+		}
+	}
+
+	@JsonDeserialize(builder = Child.Builder.class)
+	@JacksonXmlRootElement(localName = "child")
+	static class Child {
+		private final String id;
+
+		public Child(String id) {
+			this.id = id;
+		}
+
+		@JsonProperty("id")
+		public String getId() {
+			return id;
+		}
+
+		static class Builder {
+			private String id;
+
+			@JsonProperty("id")
+			public Builder id(String id) {
+				this.id = id;
+				return this;
+			}
+
+			public Child build() {
+				return new Child(id);
+			}
+		}
+	}
+
+	// -- Test Methods --//
+	private final XmlMapper MAPPER = newMapper();
+
+	public void testIssue646() throws Exception {
+		final String XML = "<parent><child><id>1</id></child></parent>";
+		Parent parent = MAPPER.readValue(XML, Parent.class);
+		assertNotNull(parent);
+		assertNotNull(parent.getChildren());
+		assertEquals(1, parent.getChildren().size());
+	}
+}