diff --git a/changelog.d/6578.bugfix b/changelog.d/6578.bugfix
new file mode 100644
index 000000000000..fae55a445645
--- /dev/null
+++ b/changelog.d/6578.bugfix
@@ -0,0 +1 @@
+Fix a bug introduced in Synapse 1.7.0 which caused an error on startup when upgrading from versions before 1.3.0.
diff --git a/synapse/storage/engines/sqlite.py b/synapse/storage/engines/sqlite.py
index df039a072dcc..cbc74cd30284 100644
--- a/synapse/storage/engines/sqlite.py
+++ b/synapse/storage/engines/sqlite.py
@@ -16,6 +16,8 @@
 import struct
 import threading
 
+from synapse.storage.prepare_database import prepare_database
+
 
 class Sqlite3Engine(object):
     single_threaded = True
@@ -60,10 +62,6 @@ def convert_param_style(self, sql):
         return sql
 
     def on_new_connection(self, db_conn):
-
-        # We need to import here to avoid an import loop.
-        from synapse.storage.prepare_database import prepare_database
-
         if self._is_in_memory:
             # In memory databases need to be rebuilt each time. Ideally we'd
             # reuse the same connection as we do when starting up, but that