diff --git a/src/AngularPublic.js b/src/AngularPublic.js
index d052c35b707b..ac7d4243af10 100644
--- a/src/AngularPublic.js
+++ b/src/AngularPublic.js
@@ -94,7 +94,8 @@ function publishExternalAPI(angular){
             ngStyle: ngStyleDirective,
             ngSwitch: ngSwitchDirective,
             ngOptions: ngOptionsDirective,
-            ngView: ngViewDirective
+            ngView: ngViewDirective,
+            ngTransclude: ngTranscludeDirective
           }).
         directive(ngEventDirectives).
         directive(ngAttributeAliasDirectives);
diff --git a/src/angular-bootstrap.js b/src/angular-bootstrap.js
index 778eee6b18f9..5b6e59373610 100644
--- a/src/angular-bootstrap.js
+++ b/src/angular-bootstrap.js
@@ -101,6 +101,7 @@
     globalVars = {};
 
     bindJQuery();
+    publishExternalAPI(window.angular);
 
     angularInit(document, angular.bootstrap);
   }
diff --git a/src/angular-mocks.js b/src/angular-mocks.js
index c024343ee2e3..0a8b573bf894 100644
--- a/src/angular-mocks.js
+++ b/src/angular-mocks.js
@@ -1458,6 +1458,9 @@ window.jstestdriver && (function(window) {
       args.push(angular.mock.dump(arg));
     });
     jstestdriver.console.log.apply(jstestdriver.console, args);
+    if (window.console) {
+      window.console.log.apply(window.console, args);
+    }
   };
 })(window);
 
diff --git a/src/directives.js b/src/directives.js
index c6cc0b151fef..39308b1a629d 100644
--- a/src/directives.js
+++ b/src/directives.js
@@ -133,17 +133,7 @@ var ngInitDirective = valueFn({
 var ngControllerDirective = ['$controller', '$window', function($controller, $window) {
   return {
     scope: true,
-    compile: function() {
-      return {
-        pre: function(scope, element, attr) {
-          var expression = attr.ngController,
-              Controller = getter(scope, expression, true) || getter($window, expression, true);
-
-          assertArgFn(Controller, expression);
-          $controller(Controller, scope);
-        }
-      };
-    }
+    controller: '@'
   }
 }];
 
@@ -264,6 +254,7 @@ var ngBindHtmlDirective = ['$sanitize', function($sanitize) {
 var ngBindTemplateDirective = ['$interpolate', function($interpolate) {
   return function(scope, element, attr) {
     var interpolateFn = $interpolate(attr.ngBindTemplate);
+    var interpolateFn = $interpolate(element.attr(attr.$attr.ngBindTemplate));
     element.addClass('ng-binding').data('$binding', interpolateFn);
     scope.$watch(interpolateFn, function(value) {
       element.text(value);
@@ -921,3 +912,59 @@ function ngAttributeAliasDirective(propName, attrName) {
 var ngAttributeAliasDirectives = {};
 forEach(BOOLEAN_ATTR, ngAttributeAliasDirective);
 ngAttributeAliasDirective(null, 'src');
+
+/**
+ * @ngdoc directive
+ * @name angular.module.ng.$compileProvider.directive.ng:transclude
+ *
+ * @description
+ * Insert the transcluded DOM here.
+ *
+ * @element ANY
+ *
+ * @example
+   <doc:example module="transclude">
+     <doc:source>
+       <script>
+         function Ctrl($scope) {
+           $scope.title = 'Lorem Ipsum';
+           $scope.text = 'Neque porro quisquam est qui dolorem ipsum quia dolor...';
+         }
+
+         angular.module('transclude', [])
+          .directive('pane', function(){
+             return {
+               transclude: true,
+               scope: 'isolate',
+               locals: { title:'bind' },
+               template: '<div style="border: 1px solid black;">' +
+                           '<div style="background-color: gray">{{title}}</div>' +
+                           '<div ng-transclude></div>' +
+                         '</div>'
+             };
+         });
+       </script>
+       <div ng:controller="Ctrl">
+         <input ng:model="title"><br>
+         <textarea ng:model="text"></textarea> <br/>
+         <pane title="{{title}}">{{text}}</pane>
+       </div>
+     </doc:source>
+     <doc:scenario>
+        it('should have transcluded', function() {
+          input('title').enter('TITLE');
+          input('text').enter('TEXT');
+          expect(binding('title')).toEqual('TITLE');
+          expect(binding('text')).toEqual('TEXT');
+        });
+     </doc:scenario>
+   </doc:example>
+ *
+ */
+var ngTranscludeDirective = valueFn({
+  controller: ['$transclude', '$element', function($transclude, $element) {
+    $transclude(function(clone) {
+      $element.append(clone);
+    });
+  }]
+});
diff --git a/src/service/compiler.js b/src/service/compiler.js
index ed4537491388..ef049b5072ba 100644
--- a/src/service/compiler.js
+++ b/src/service/compiler.js
@@ -72,6 +72,9 @@
  *
  *
  * @param {string|DOMElement} element Element or HTML string to compile into a template function.
+ * @param {function(angular.Scope[, cloneAttachFn]} transclude function available to directives.
+ * @param {number} maxPriority only apply directives lower then given priority (Only effects the
+ *                 root element(s), not their children)
  * @returns {function(scope[, cloneAttachFn])} a link function which is used to bind template
  * (a DOM element/tree) to a scope. Where:
  *
@@ -157,7 +160,8 @@ function $CompileProvider($provide) {
                   directive.compile = valueFn(directive.link);
                 }
                 directive.priority = directive.priority || 0;
-                directive.name = name;
+                directive.name = directive.name || name;
+                directive.require = directive.require || (directive.controller && directive.name);
                 directive.restrict = directive.restrict || 'EACM';
                 directives.push(directive);
               } catch (e) {
@@ -175,10 +179,58 @@ function $CompileProvider($provide) {
   };
 
 
-  this.$get = ['$injector', '$interpolate', '$exceptionHandler', '$http', '$templateCache',
-       function($injector,   $interpolate,   $exceptionHandler,   $http,   $templateCache) {
+  this.$get = [
+            '$injector', '$interpolate', '$exceptionHandler', '$http', '$templateCache', '$parse',
+            '$controller',
+    function($injector,   $interpolate,   $exceptionHandler,   $http,   $templateCache,   $parse,
+             $controller) {
+
+    var LOCAL_MODE = {
+      attribute: function(localName, mode, parentScope, scope, attr) {
+        scope[localName] = attr[localName];
+      },
+
+      evaluate: function(localName, mode, parentScope, scope, attr) {
+        scope[localName] = parentScope.$eval(attr[localName]);
+      },
+
+      bind: function(localName, mode, parentScope, scope, attr) {
+        var getter = $interpolate(attr[localName]);
+        scope.$watch(
+          function() { return getter(parentScope); },
+          function(v) { scope[localName] = v; }
+        );
+      },
+
+      accessor: function(localName, mode, parentScope, scope, attr) {
+        var getter = noop,
+            setter = noop,
+            exp = attr[localName];
+
+        if (exp) {
+          getter = $parse(exp);
+          setter = getter.assign || function() {
+            throw Error("Expression '" + exp + "' not assignable.");
+          };
+        }
+
+        scope[localName] = function(value) {
+          return arguments.length ? setter(parentScope, value) : getter(parentScope);
+        };
+      },
+
+      expression: function(localName, mode, parentScope, scope, attr) {
+        scope[localName] = function(locals) {
+          $parse(attr[localName])(parentScope, locals);
+        };
+      }
+    };
+
+    return compile;
 
-    return function(templateElement) {
+    //================================
+
+    function compile(templateElement, transcludeFn, maxPriority) {
       templateElement = jqLite(templateElement);
       // We can not compile top level text elements since text nodes can be merged and we will
       // not be able to attach scope data to them, so we will wrap them in <span>
@@ -187,7 +239,7 @@ function $CompileProvider($provide) {
           templateElement[index] = jqLite(node).wrap('<span>').parent()[0];
         }
       });
-      var linkingFn = compileNodes(templateElement, templateElement);
+      var linkingFn = compileNodes(templateElement, transcludeFn, templateElement, maxPriority);
       return function(scope, cloneConnectFn){
         assertArg(scope, 'scope');
         // important!!: we must call our jqLite.clone() since the jQuery one is trying to be smart
@@ -200,9 +252,11 @@ function $CompileProvider($provide) {
         if (linkingFn) linkingFn(scope, element, element);
         return element;
       };
-    };
+    }
 
-    //================================
+    function wrongMode(localName, mode) {
+      throw Error("Unsupported '" + mode + "' for '" + localName + "'.");
+    }
 
     /**
      * Compile function matches each node in nodeList against the directives. Once all directives
@@ -211,12 +265,15 @@ function $CompileProvider($provide) {
      * function, which is the a linking function for the node.
      *
      * @param {NodeList} nodeList an array of nodes to compile
+     * @param {function(angular.Scope[, cloneAttachFn]} transcludeFn A linking function, where the
+     *        scope argument is auto-generated to the new child of the transcluded parent scope.
      * @param {DOMElement=} rootElement If the nodeList is the root of the compilation tree then the
      *        rootElement must be set the jqLite collection of the compile root. This is
      *        needed so that the jqLite collection items can be replaced with widgets.
+     * @param {number=} max directive priority
      * @returns {?function} A composite linking function of all of the matched directives or null.
      */
-    function compileNodes(nodeList, rootElement) {
+    function compileNodes(nodeList, transcludeFn, rootElement, maxPriority) {
      var linkingFns = [],
          directiveLinkingFn, childLinkingFn, directives, attrs, linkingFnFound;
 
@@ -227,15 +284,16 @@ function $CompileProvider($provide) {
          $set: attrSetter
        };
        // we must always refer to nodeList[i] since the nodes can be replaced underneath us.
-       directives = collectDirectives(nodeList[i], [], attrs);
+       directives = collectDirectives(nodeList[i], [], attrs, maxPriority);
 
        directiveLinkingFn = (directives.length)
-           ? applyDirectivesToNode(directives, nodeList[i], attrs, rootElement)
+           ? applyDirectivesToNode(directives, nodeList[i], attrs, transcludeFn, rootElement)
            : null;
 
        childLinkingFn = (directiveLinkingFn && directiveLinkingFn.terminal)
            ? null
-           : compileNodes(nodeList[i].childNodes);
+           : compileNodes(nodeList[i].childNodes,
+                directiveLinkingFn ? directiveLinkingFn.transclude : transcludeFn);
 
        linkingFns.push(directiveLinkingFn);
        linkingFns.push(childLinkingFn);
@@ -245,28 +303,42 @@ function $CompileProvider($provide) {
      // return a linking function if we have found anything, null otherwise
      return linkingFnFound ? linkingFn : null;
 
-     function linkingFn(scope, nodeList, rootElement) {
+     /* nodesetLinkingFn */ function linkingFn(scope, nodeList, rootElement, boundTranscludeFn) {
        if (linkingFns.length != nodeList.length * 2) {
          throw Error('Template changed structure!');
        }
 
-       var childLinkingFn, directiveLinkingFn, node, childScope;
+       var childLinkingFn, directiveLinkingFn, node, childScope, childTransclusionFn;
 
        for(var i=0, n=0, ii=linkingFns.length; i<ii; n++) {
          node = nodeList[n];
-         directiveLinkingFn = linkingFns[i++];
-         childLinkingFn = linkingFns[i++];
+         directiveLinkingFn = /* directiveLinkingFn */ linkingFns[i++];
+         childLinkingFn = /* nodesetLinkingFn */ linkingFns[i++];
 
          if (directiveLinkingFn) {
            if (directiveLinkingFn.scope && !rootElement) {
-             childScope = scope.$new();
+             childScope = scope.$new(isObject(directiveLinkingFn.scope));
              jqLite(node).data('$scope', childScope);
            } else {
              childScope = scope;
            }
-           directiveLinkingFn(childLinkingFn, childScope, node, rootElement);
+           childTransclusionFn = directiveLinkingFn.transclude;
+           if (childTransclusionFn || (!boundTranscludeFn && transcludeFn)) {
+             directiveLinkingFn(childLinkingFn, childScope, node, rootElement,
+                 (function(transcludeFn) {
+                   return function(cloneFn) {
+                     var transcludeScope = scope.$new();
+
+                     return transcludeFn(transcludeScope, cloneFn).
+                         bind('$destroy', bind(transcludeScope, transcludeScope.$destroy));
+                    };
+                  })(childTransclusionFn || transcludeFn)
+             );
+           } else {
+             directiveLinkingFn(childLinkingFn, childScope, node, undefined, boundTranscludeFn);
+           }
          } else if (childLinkingFn) {
-           childLinkingFn(scope, node.childNodes);
+           childLinkingFn(scope, node.childNodes, undefined, boundTranscludeFn);
          }
        }
      }
@@ -280,8 +352,9 @@ function $CompileProvider($provide) {
      * @param directives an array to which the directives are added to. This array is sorted before
      *        the function returns.
      * @param attrs the shared attrs object which is used to populate the normalized attributes.
+     * @param {number=} max directive priority
      */
-    function collectDirectives(node, directives, attrs) {
+    function collectDirectives(node, directives, attrs, maxPriority) {
       var nodeType = node.nodeType,
           attrsMap = attrs.$attr,
           match,
@@ -290,7 +363,8 @@ function $CompileProvider($provide) {
       switch(nodeType) {
         case 1: /* Element */
           // use the node name: <directive>
-          addDirective(directives, directiveNormalize(nodeName_(node).toLowerCase()), 'E');
+          addDirective(directives,
+              directiveNormalize(nodeName_(node).toLowerCase()), 'E', maxPriority);
 
           // iterate over the attributes
           for (var attr, name, nName, value, nAttrs = node.attributes,
@@ -305,15 +379,15 @@ function $CompileProvider($provide) {
             if (BOOLEAN_ATTR[nName]) {
               attrs[nName] = true; // presence means true
             }
-            addAttrInterpolateDirective(directives, value, nName);
-            addDirective(directives, nName, 'A');
+            addAttrInterpolateDirective(directives, value, nName)
+            addDirective(directives, nName, 'A', maxPriority);
           }
 
           // use class as directive
           className = node.className;
           while (match = CLASS_DIRECTIVE_REGEXP.exec(className)) {
             nName = directiveNormalize(match[2]);
-            if (addDirective(directives, nName, 'C')) {
+            if (addDirective(directives, nName, 'C', maxPriority)) {
               attrs[nName] = trim(match[3]);
             }
             className = className.substr(match.index + match[0].length);
@@ -326,7 +400,7 @@ function $CompileProvider($provide) {
           match = COMMENT_DIRECTIVE_REGEXP.exec(node.nodeValue);
           if (match) {
             nName = directiveNormalize(match[1]);
-            if (addDirective(directives, nName, 'M')) {
+            if (addDirective(directives, nName, 'M', maxPriority)) {
               attrs[nName] = trim(match[2]);
             }
           }
@@ -347,40 +421,81 @@ function $CompileProvider($provide) {
      *        this needs to be pre-sorted by priority order.
      * @param {Node} templateNode The raw DOM node to apply the compile functions to
      * @param {Object} templateAttrs The shared attribute function
+     * @param {function(angular.Scope[, cloneAttachFn]} transcludeFn A linking function, where the
+     *        scope argument is auto-generated to the new child of the transcluded parent scope.
      * @param {DOMElement} rootElement If we are working on the root of the compile tree then this
      *        argument has the root jqLite array so that we can replace widgets on it.
      * @returns linkingFn
      */
-    function applyDirectivesToNode(directives, templateNode, templateAttrs, rootElement) {
+    function applyDirectivesToNode(directives, templateNode, templateAttrs, transcludeFn, rootElement) {
       var terminalPriority = -Number.MAX_VALUE,
           preLinkingFns = [],
           postLinkingFns = [],
           newScopeDirective = null,
+          newIsolatedScopeDirective = null,
           templateDirective = null,
           delayedLinkingFn = null,
           element = templateAttrs.$element = jqLite(templateNode),
-          directive, linkingFn;
+          directive,
+          directiveName,
+          template,
+          transcludeDirective,
+          childTranscludeFn = transcludeFn,
+          controllerDirectives,
+          linkingFn,
+          directiveValue;
 
       // executes all directives on the current element
       for(var i = 0, ii = directives.length; i < ii; i++) {
         directive = directives[i];
+        template = undefined;
 
         if (terminalPriority > directive.priority) {
           break; // prevent further processing of directives
         }
 
-        if (directive.scope) {
-          assertNoDuplicate('new scope', newScopeDirective, directive, element);
+        if (directiveValue = directive.scope) {
+          assertNoDuplicate('isolated scope', newIsolatedScopeDirective, directive, element);
+          if (isObject(directiveValue)) {
+            element.addClass('ng-isolate-scope');
+            newIsolatedScopeDirective = directive;
+          }
           element.addClass('ng-scope');
-          newScopeDirective = directive;
+          newScopeDirective = newScopeDirective || directive;
         }
 
-        if (directive.template) {
+        directiveName = directive.name;
+
+        if (directiveValue = directive.controller) {
+          controllerDirectives = controllerDirectives || {};
+          assertNoDuplicate("'" + directiveName + "' controller",
+              controllerDirectives[directiveName], directive, element);
+          controllerDirectives[directiveName] = directive;
+        }
+
+        if (directiveValue = directive.transclude) {
+          assertNoDuplicate('transclusion', transcludeDirective, directive, element);
+          transcludeDirective = directive;
+          terminalPriority = directive.priority;
+          if (directiveValue == 'element') {
+            template = jqLite(templateNode);
+            templateNode = (element = templateAttrs.$element = jqLite(
+                '<!-- ' + directiveName + ': ' + templateAttrs[directiveName]  + ' -->'))[0];
+            template.replaceWith(templateNode);
+            childTranscludeFn = compile(template, transcludeFn, terminalPriority);
+          } else {
+            template = jqLite(JQLiteClone(templateNode));
+            element.html(''); // clear contents
+            childTranscludeFn = compile(template.contents(), transcludeFn);
+          }
+        }
+
+        if (directiveValue = directive.template) {
           assertNoDuplicate('template', templateDirective, directive, element);
           templateDirective = directive;
 
           // include the contents of the original element into the template and replace the element
-          var content = directive.template.replace(CONTENT_REGEXP, element.html());
+          var content = directiveValue.replace(CONTENT_REGEXP, element.html());
           templateNode = jqLite(content)[0];
           if (directive.replace) {
             replaceWith(rootElement, element, templateNode);
@@ -411,16 +526,16 @@ function $CompileProvider($provide) {
           assertNoDuplicate('template', templateDirective, directive, element);
           templateDirective = directive;
           delayedLinkingFn = compileTemplateUrl(directives.splice(i, directives.length - i),
-              compositeLinkFn, element, templateAttrs, rootElement, directive.replace);
+              /* directiveLinkingFn */ compositeLinkFn, element, templateAttrs, rootElement,
+              directive.replace, childTranscludeFn);
           ii = directives.length;
         } else if (directive.compile) {
           try {
-            linkingFn = directive.compile(element, templateAttrs);
+            linkingFn = directive.compile(element, templateAttrs, childTranscludeFn);
             if (isFunction(linkingFn)) {
-              postLinkingFns.push(linkingFn);
+              addLinkingFns(null, linkingFn);
             } else if (linkingFn) {
-              if (linkingFn.pre) preLinkingFns.push(linkingFn.pre);
-              if (linkingFn.post) postLinkingFns.push(linkingFn.post);
+              addLinkingFns(linkingFn.pre, linkingFn.post);
             }
           } catch (e) {
             $exceptionHandler(e, startingTag(element));
@@ -433,16 +548,57 @@ function $CompileProvider($provide) {
         }
 
       }
-      compositeLinkFn.scope = !!newScopeDirective;
+
+      linkingFn = delayedLinkingFn || compositeLinkFn;
+      linkingFn.scope = newScopeDirective && newScopeDirective.scope;
+      linkingFn.transclude = transcludeDirective && childTranscludeFn;
 
       // if we have templateUrl, then we have to delay linking
-      return delayedLinkingFn || compositeLinkFn;
+      return linkingFn;
 
       ////////////////////
 
+      function addLinkingFns(pre, post) {
+        if (pre) {
+          pre.require = directive.require;
+          preLinkingFns.push(pre);
+        }
+        if (post) {
+          post.require = directive.require;
+          postLinkingFns.push(post);
+        }
+      }
+
 
-      function compositeLinkFn(childLinkingFn, scope, linkNode) {
-        var attrs, element, i, ii;
+      function getControllers(require, element) {
+        var value, retrievalMethod = 'data', optional = false;
+        if (isString(require)) {
+          while((value = require.charAt(0)) == '^' || value == '?') {
+            require = require.substr(1);
+            if (value == '^') {
+              retrievalMethod = 'inheritedData';
+            }
+            optional = optional || value == '?';
+          }
+          value = element[retrievalMethod]('$' + require + 'Controller');
+          if (!value && !optional) {
+            throw Error("No controller: " + require);
+          }
+          return value;
+        } else if (isArray(require)) {
+          value = [];
+          forEach(require, function(require) {
+            value.push(getControllers(require, element));
+          });
+        }
+        return value;
+      }
+
+
+      /* directiveLinkingFn */
+      function compositeLinkFn(/* nodesetLinkingFn */ childLinkingFn,
+                               scope, linkNode, rootElement, boundTranscludeFn) {
+        var attrs, element, i, ii, linkingFn, controller;
 
         if (templateNode === linkNode) {
           attrs = templateAttrs;
@@ -452,22 +608,59 @@ function $CompileProvider($provide) {
         }
         element = attrs.$element;
 
+        if (newScopeDirective && isObject(newScopeDirective.scope)) {
+          forEach(newScopeDirective.scope, function(mode, name) {
+            (LOCAL_MODE[mode] || wrongMode)(name, mode,
+                scope.$parent || scope, scope, attrs);
+          });
+        }
+
+        if (controllerDirectives) {
+          forEach(controllerDirectives, function(directive) {
+            var locals = {
+              $scope: scope,
+              $element: element,
+              $attrs: attrs,
+              $transclude: boundTranscludeFn
+            };
+
+
+            forEach(directive.inject || {}, function(mode, name) {
+              (LOCAL_MODE[mode] || wrongMode)(name, mode,
+                  newScopeDirective ? scope.$parent || scope : scope, locals, attrs);
+            });
+
+            controller = directive.controller;
+            if (controller == '@') {
+              controller = attrs[directive.name];
+            }
+
+            element.data(
+                '$' + directive.name + 'Controller',
+                $controller(controller, locals));
+          });
+        }
+
         // PRELINKING
         for(i = 0, ii = preLinkingFns.length; i < ii; i++) {
           try {
-            preLinkingFns[i](scope, element, attrs);
+            linkingFn = preLinkingFns[i];
+            linkingFn(scope, element, attrs,
+                linkingFn.require && getControllers(linkingFn.require, element));
           } catch (e) {
             $exceptionHandler(e, startingTag(element));
           }
         }
 
         // RECURSION
-        childLinkingFn && childLinkingFn(scope, linkNode.childNodes);
+        childLinkingFn && childLinkingFn(scope, linkNode.childNodes, undefined, boundTranscludeFn);
 
         // POSTLINKING
         for(i = 0, ii = postLinkingFns.length; i < ii; i++) {
           try {
-            postLinkingFns[i](scope, element, attrs);
+            linkingFn = postLinkingFns[i];
+            linkingFn(scope, element, attrs,
+                linkingFn.require && getControllers(linkingFn.require, element));
           } catch (e) {
             $exceptionHandler(e, startingTag(element));
           }
@@ -490,14 +683,15 @@ function $CompileProvider($provide) {
      *   * `M`: comment
      * @returns true if directive was added.
      */
-    function addDirective(tDirectives, name, location) {
+    function addDirective(tDirectives, name, location, maxPriority) {
       var match = false;
       if (hasDirectives.hasOwnProperty(name)) {
         for(var directive, directives = $injector.get(name + Suffix),
             i=0, ii = directives.length; i<ii; i++) {
           try {
             directive = directives[i];
-            if (directive.restrict.indexOf(location) != -1) {
+            if ( (maxPriority === undefined || maxPriority > directive.priority) &&
+                 directive.restrict.indexOf(location) != -1) {
               tDirectives.push(directive);
               match = true;
             }
@@ -540,15 +734,15 @@ function $CompileProvider($provide) {
     }
 
 
-    function compileTemplateUrl(directives, beforeWidgetLinkFn, tElement, tAttrs, rootElement,
-                                replace) {
+    function compileTemplateUrl(directives, /* directiveLinkingFn */ beforeWidgetLinkFn,
+                                tElement, tAttrs, rootElement, replace, transcludeFn) {
       var linkQueue = [],
           afterWidgetLinkFn,
           afterWidgetChildrenLinkFn,
           originalWidgetNode = tElement[0],
           asyncWidgetDirective = directives.shift(),
           // The fact that we have to copy and patch the directive seems wrong!
-          syncWidgetDirective = extend({}, asyncWidgetDirective, {templateUrl:null}),
+          syncWidgetDirective = extend({}, asyncWidgetDirective, {templateUrl:null, transclude:null}),
           html = tElement.html();
 
       tElement.html('');
@@ -574,12 +768,13 @@ function $CompileProvider($provide) {
           }
 
           directives.unshift(syncWidgetDirective);
-          afterWidgetLinkFn = applyDirectivesToNode(directives, tElement, tAttrs);
-          afterWidgetChildrenLinkFn = compileNodes(tElement.contents());
+          afterWidgetLinkFn = /* directiveLinkingFn */ applyDirectivesToNode(directives, tElement, tAttrs, transcludeFn);
+          afterWidgetChildrenLinkFn = /* nodesetLinkingFn */ compileNodes(tElement.contents(), transcludeFn);
 
 
           while(linkQueue.length) {
-            var linkRootElement = linkQueue.pop(),
+            var controller = linkQueue.pop(),
+                linkRootElement = linkQueue.pop(),
                 cLinkNode = linkQueue.pop(),
                 scope = linkQueue.pop(),
                 node = templateNode;
@@ -590,8 +785,8 @@ function $CompileProvider($provide) {
               replaceWith(linkRootElement, jqLite(cLinkNode), node);
             }
             afterWidgetLinkFn(function() {
-              beforeWidgetLinkFn(afterWidgetChildrenLinkFn, scope, node);
-            }, scope, node);
+              beforeWidgetLinkFn(afterWidgetChildrenLinkFn, scope, node, rootElement, controller);
+            }, scope, node, rootElement, controller);
           }
           linkQueue = null;
         }).
@@ -599,15 +794,17 @@ function $CompileProvider($provide) {
           throw Error('Failed to load template: ' + config.url);
         });
 
-      return function(ignoreChildLinkingFn, scope, node, rootElement) {
+      return /* directiveLinkingFn */ function(ignoreChildLinkingFn, scope, node, rootElement,
+                                               controller) {
         if (linkQueue) {
           linkQueue.push(scope);
           linkQueue.push(node);
           linkQueue.push(rootElement);
+          linkQueue.push(controller);
         } else {
           afterWidgetLinkFn(function() {
-            beforeWidgetLinkFn(afterWidgetChildrenLinkFn, scope, node);
-          }, scope, node);
+            beforeWidgetLinkFn(afterWidgetChildrenLinkFn, scope, node, rootElement, controller);
+          }, scope, node, rootElement, controller);
         }
       };
     }
@@ -759,3 +956,24 @@ var PREFIX_REGEXP = /^(x[\:\-_]|data[\:\-_])/i;
 function directiveNormalize(name) {
   return camelCase(name.replace(PREFIX_REGEXP, ''));
 }
+
+
+
+/**
+ * Closure compiler type information
+ */
+
+function nodesetLinkingFn(
+  /* angular.Scope */ scope,
+  /* NodeList */ nodeList,
+  /* Element */ rootElement,
+  /* function(Function) */ boundTranscludeFn
+){}
+
+function directiveLinkingFn(
+  /* nodesetLinkingFn */ nodesetLinkingFn,
+  /* angular.Scope */ scope,
+  /* Node */ node,
+  /* Element */ rootElement,
+  /* function(Function) */ boundTranscludeFn
+){}
diff --git a/src/service/controller.js b/src/service/controller.js
index 22fb3b025260..229ce14aa480 100644
--- a/src/service/controller.js
+++ b/src/service/controller.js
@@ -1,15 +1,16 @@
 'use strict';
 
 function $ControllerProvider() {
-  this.$get = ['$injector', function($injector) {
+  this.$get = ['$injector', '$window', function($injector, $window) {
 
     /**
      * @ngdoc function
      * @name angular.module.ng.$controller
      * @requires $injector
      *
-     * @param {Function} Class Constructor function of a controller to instantiate.
-     * @param {Object} scope Related scope.
+     * @param {Function|string} Class Constructor function of a controller to instantiate, or
+     *        expression to read from current scope or window.
+     * @param {Object} locals Injection locals for Controller.
      * @return {Object} Instance of given controller.
      *
      * @description
@@ -19,8 +20,14 @@ function $ControllerProvider() {
      * a service, so that one can override this service with {@link https://gist.github.com/1649788
      * BC version}.
      */
-    return function(Class, scope) {
-      return $injector.instantiate(Class, {$scope: scope});
+    return function(Class, locals) {
+      if(isString(Class)) {
+        var expression = Class;
+        Class = getter(locals.$scope, expression, true) || getter($window, expression, true);
+        assertArgFn(Class, expression);
+      }
+
+      return $injector.instantiate(Class, locals);
     };
   }];
 }
diff --git a/src/service/formFactory.js b/src/service/formFactory.js
index 807f41134ba5..b051f7b9c792 100644
--- a/src/service/formFactory.js
+++ b/src/service/formFactory.js
@@ -139,7 +139,7 @@ function $FormFactoryProvider() {
 
     function formFactory(parent) {
       var scope = (parent || formFactory.rootForm).$new();
-      $controller(FormController, scope);
+      $controller(FormController, {$scope: scope});
       return scope;
     }
 
diff --git a/src/service/route.js b/src/service/route.js
index 9b52c4b0b6b0..932e26d54d2e 100644
--- a/src/service/route.js
+++ b/src/service/route.js
@@ -280,7 +280,7 @@ function $RouteProvider(){
             copy(next.params, $routeParams);
             next.scope = parentScope.$new();
             if (next.controller) {
-              $controller(next.controller, next.scope);
+              $controller(next.controller, {$scope: next.scope});
             }
           }
         }
diff --git a/src/service/scope.js b/src/service/scope.js
index 9b9e9215c870..da1062a8bf31 100644
--- a/src/service/scope.js
+++ b/src/service/scope.js
@@ -136,20 +136,36 @@ function $RootScopeProvider(){
        * the scope and its child scopes to be permanently detached from the parent and thus stop
        * participating in model change detection and listener notification by invoking.
        *
+       * @params {boolean} isolate if true then the scoped does not prototypically inherit from the
+       *         parent scope. The scope is isolated, as it can not se parent scope properties.
+       *         When creating widgets it is useful for the widget to not accidently read parent
+       *         state.
+       *
        * @returns {Object} The newly created child scope.
        *
        */
-      $new: function() {
-        var Child = function() {}; // should be anonymous; This is so that when the minifier munges
-          // the name it does not become random set of chars. These will then show up as class
-          // name in the debugger.
-        var child;
-        Child.prototype = this;
-        child = new Child();
+      $new: function(isolate) {
+        var Child,
+            child;
+
+        if (isFunction(isolate)) {
+          // TODO: remove at some point
+          throw Error('API-CHANGE: Use $controller to instantiate controllers.');
+        }
+        if (isolate) {
+          child = new Scope();
+          child.$root = this.$root;
+        } else {
+          Child = function() {}; // should be anonymous; This is so that when the minifier munges
+            // the name it does not become random set of chars. These will then show up as class
+            // name in the debugger.
+          Child.prototype = this;
+          child = new Child();
+          child.$id = nextUid();
+        }
         child['this'] = child;
         child.$$listeners = {};
         child.$parent = this;
-        child.$id = nextUid();
         child.$$asyncQueue = [];
         child.$$watchers = child.$$nextSibling = child.$$childHead = child.$$childTail = null;
         child.$$prevSibling = this.$$childTail;
@@ -277,7 +293,7 @@ function $RootScopeProvider(){
        * `'Maximum iteration limit exceeded.'` if the number of iterations exceeds 100.
        *
        * Usually you don't call `$digest()` directly in
-       * {@link angular.module.ng.$compileProvider.directive.ng:controller controllers} or in 
+       * {@link angular.module.ng.$compileProvider.directive.ng:controller controllers} or in
        * {@link angular.module.ng.$compileProvider.directive directives}.
        * Instead a call to {@link angular.module.ng.$rootScope.Scope#$apply $apply()} (typically from within a
        * {@link angular.module.ng.$compileProvider.directive directives}) will force a `$digest()`.
diff --git a/src/widgets.js b/src/widgets.js
index 18ac27c3628d..a465bc887c89 100644
--- a/src/widgets.js
+++ b/src/widgets.js
@@ -760,7 +760,7 @@ var ngPluralizeDirective = ['$locale', '$interpolate', function($locale, $interp
   var BRACE = /{}/g;
   return function(scope, element, attr) {
     var numberExp = attr.count,
-        whenExp = attr.when,
+        whenExp = element.attr(attr.$attr.when), // this is becaues we have {{}} in attrs
         offset = attr.offset || 0,
         whens = scope.$eval(whenExp),
         whensExpFns = {};
diff --git a/test/service/compilerSpec.js b/test/service/compilerSpec.js
index 4de4641a024f..c998765c371a 100644
--- a/test/service/compilerSpec.js
+++ b/test/service/compilerSpec.js
@@ -207,7 +207,12 @@ describe('$compile', function() {
             forEach(parts, function(value, key){
               if (value.substring(0,3) == 'ng-') {
               } else {
-                list.push(value.replace('=""', ''));
+                value = value.replace('=""', '');
+                var match = value.match(/=(.*)/);
+                if (match && match[1].charAt(0) != '"') {
+                  value = value.replace(/=(.*)/, '="$1"');
+                }
+                list.push(value);
               }
             });
             return '<' + list.join(' ') + '>';
@@ -864,6 +869,7 @@ describe('$compile', function() {
 
 
       describe('scope', function() {
+        var iscope;
 
         beforeEach(module(function($compileProvider) {
           forEach(['', 'a', 'b'], function(name) {
@@ -878,6 +884,31 @@ describe('$compile', function() {
                 }
               };
             });
+            $compileProvider.directive('iscope' + uppercase(name), function(log) {
+              return {
+                scope: {},
+                compile: function() {
+                  return function (scope, element) {
+                    iscope = scope;
+                    log(scope.$id);
+                    expect(element.data('$scope')).toBe(scope);
+                  };
+                }
+              };
+            });
+            $compileProvider.directive('tiscope' + uppercase(name), function(log) {
+              return {
+                scope: {},
+                templateUrl: 'tiscope.html',
+                compile: function() {
+                  return function (scope, element) {
+                    iscope = scope;
+                    log(scope.$id);
+                    expect(element.data('$scope')).toBe(scope);
+                  };
+                }
+              };
+            });
           });
           $compileProvider.directive('log', function(log) {
             return function(scope) {
@@ -894,37 +925,80 @@ describe('$compile', function() {
         }));
 
 
-        it('should correctly create the scope hierachy properly', inject(
-            function($rootScope, $compile, log) {
-          element = $compile(
-              '<div>' + //1
-                '<b class=scope>' + //2
-                  '<b class=scope><b class=log></b></b>' + //3
-                  '<b class=log></b>' +
-                '</b>' +
-                '<b class=scope>' + //4
-                  '<b class=log></b>' +
-                '</b>' +
-              '</div>'
-            )($rootScope);
-          expect(log).toEqual('LOG; log-003-002; 003; LOG; log-002-001; 002; LOG; log-004-001; 004');
+        it('should allow creation of new isolated scopes', inject(function($rootScope, $compile, log) {
+          element = $compile('<div><span iscope><a log></a></span></div>')($rootScope);
+          expect(log).toEqual('LOG; log-002-001; 002');
+          $rootScope.name = 'abc';
+          expect(iscope.$parent).toBe($rootScope);
+          expect(iscope.name).toBeUndefined();
+        }));
+
+
+        it('should allow creation of new isolated scopes', inject(
+            function($rootScope, $compile, log, $httpBackend) {
+          $httpBackend.expect('GET', 'tiscope.html').respond('<a log></a>');
+          element = $compile('<div><span tiscope></span></div>')($rootScope);
+          $httpBackend.flush();
+          expect(log).toEqual('LOG; log-002-001; 002');
+          $rootScope.name = 'abc';
+          expect(iscope.$parent).toBe($rootScope);
+          expect(iscope.name).toBeUndefined();
         }));
 
 
-        it('should not allow more then one scope creation per element', inject(
+        it('should correctly create the scope hierachy properly', inject(
+          function($rootScope, $compile, log) {
+            element = $compile(
+                '<div>' + //1
+                  '<b class=scope>' + //2
+                    '<b class=scope><b class=log></b></b>' + //3
+                    '<b class=log></b>' +
+                  '</b>' +
+                  '<b class=scope>' + //4
+                    '<b class=log></b>' +
+                  '</b>' +
+                '</div>'
+              )($rootScope);
+            expect(log).toEqual('LOG; log-003-002; 003; LOG; log-002-001; 002; LOG; log-004-001; 004');
+          })
+        );
+
+
+        it('should allow more then one scope creation per element', inject(
+          function($rootScope, $compile, log) {
+            $compile('<div class="scope-a; scope-b"></div>')($rootScope);
+            expect(log).toEqual('001; 001');
+          })
+        );
+
+        it('should not allow more then one isolate scope creation per element', inject(
+          function($rootScope, $compile) {
+            expect(function(){
+              $compile('<div class="iscope-a; scope-b"></div>');
+            }).toThrow('Multiple directives [iscopeA, scopeB] asking for isolated scope on: ' +
+                '<' + (msie < 9 ? 'DIV' : 'div') +
+                ' class="iscope-a; scope-b ng-isolate-scope ng-scope">');
+          })
+        );
+
+
+        it('should not allow more then one isolate scope creation per element', inject(
           function($rootScope, $compile) {
             expect(function(){
-              $compile('<div class="scope-a; scope-b"></div>');
-            }).toThrow('Multiple directives [scopeA, scopeB] asking for new scope on: ' +
-                '<' + (msie < 9 ? 'DIV' : 'div') + ' class="scope-a; scope-b ng-scope">');
-          }));
+              $compile('<div class="iscope-a; iscope-b"></div>');
+            }).toThrow('Multiple directives [iscopeA, iscopeB] asking for isolated scope on: ' +
+                '<' + (msie < 9 ? 'DIV' : 'div') +
+                ' class="iscope-a; iscope-b ng-isolate-scope ng-scope">');
+          })
+        );
 
 
         it('should treat new scope on new template as noop', inject(
           function($rootScope, $compile, log) {
             element = $compile('<div scope-a></div>')($rootScope);
             expect(log).toEqual('001');
-          }));
+          })
+        );
       });
     });
   });
@@ -1193,4 +1267,359 @@ describe('$compile', function() {
       })
     });
   });
+
+
+  describe('locals', function() {
+    it('should marshal to locals', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('widget', function(log) {
+          return {
+            scope: {
+              attr: 'attribute',
+              prop: 'evaluate',
+              bind: 'bind',
+              assign: 'accessor',
+              read: 'accessor',
+              exp: 'expression',
+              nonExist: 'accessor',
+              nonExistExpr: 'expression'
+            },
+            link: function(scope, element, attrs) {
+              scope.nonExist(); // noop
+              scope.nonExist(123); // noop
+              scope.nonExistExpr(); // noop
+              scope.nonExistExpr(123); // noop
+              log(scope.attr);
+              log(scope.prop);
+              log(scope.assign());
+              log(scope.read());
+              log(scope.assign('ng'));
+              scope.exp({myState:'OK'});
+              expect(function() { scope.read(undefined); }).
+                  toThrow("Expression ''D'' not assignable.");
+              scope.$watch('bind', log);
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        $rootScope.myProp = 'B';
+        $rootScope.bi = {nd: 'C'};
+        $rootScope.name = 'C';
+        element = $compile(
+            '<div><div widget attr="A" prop="myProp" bind="{{bi.nd}}" assign="name" read="\'D\'" ' +
+                'exp="state=myState">{{bind}}</div></div>')
+            ($rootScope);
+        expect(log).toEqual('A; B; C; D; ng');
+        expect($rootScope.name).toEqual('ng');
+        expect($rootScope.state).toEqual('OK');
+        log.reset();
+        $rootScope.$apply();
+        expect(element.text()).toEqual('C');
+        expect(log).toEqual('C');
+        $rootScope.bi.nd = 'c';
+        $rootScope.$apply();
+        expect(log).toEqual('C; c');
+      });
+    });
+  });
+
+
+  describe('controller', function() {
+    it('should inject locals to controller', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('widget', function(log) {
+          return {
+            controller: function(attr, prop, assign, read, exp){
+              log(attr);
+              log(prop);
+              log(assign());
+              log(read());
+              log(assign('ng'));
+              exp();
+              expect(function() { read(undefined); }).
+                  toThrow("Expression ''D'' not assignable.");
+              this.result = 'OK';
+            },
+            inject: {
+              attr: 'attribute',
+              prop: 'evaluate',
+              assign: 'accessor',
+              read: 'accessor',
+              exp: 'expression'
+            },
+            link: function(scope, element, attrs, controller) {
+              log(controller.result);
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        $rootScope.myProp = 'B';
+        $rootScope.bi = {nd: 'C'};
+        $rootScope.name = 'C';
+        element = $compile(
+            '<div><div widget attr="A" prop="myProp" bind="{{bi.nd}}" assign="name" read="\'D\'" ' +
+                'exp="state=\'OK\'">{{bind}}</div></div>')
+            ($rootScope);
+        expect(log).toEqual('A; B; C; D; ng; OK');
+        expect($rootScope.name).toEqual('ng');
+      });
+    });
+
+
+    it('should get required controller', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('main', function(log) {
+          return {
+            priority: 2,
+            controller: function() {
+              this.name = 'main';
+            },
+            link: function(scope, element, attrs, controller) {
+              log(controller.name);
+            }
+          };
+        });
+        $compileProvider.directive('dep', function(log) {
+          return {
+            priority: 1,
+            require: 'main',
+            link: function(scope, element, attrs, controller) {
+              log('dep:' + controller.name);
+            }
+          };
+        });
+        $compileProvider.directive('other', function(log) {
+          return {
+            link: function(scope, element, attrs, controller) {
+              log(!!controller); // should be false
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        element = $compile('<div main dep other></div>')($rootScope);
+        expect(log).toEqual('main; dep:main; false');
+      });
+    });
+
+
+    it('should require controller on parent element',function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('main', function(log) {
+          return {
+            controller: function() {
+              this.name = 'main';
+            }
+          };
+        });
+        $compileProvider.directive('dep', function(log) {
+          return {
+            require: '^main',
+            link: function(scope, element, attrs, controller) {
+              log('dep:' + controller.name);
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        element = $compile('<div main><div dep></div></div>')($rootScope);
+        expect(log).toEqual('dep:main');
+      });
+    });
+
+
+    it('should have optional controller on current element', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('dep', function(log) {
+          return {
+            require: '?main',
+            link: function(scope, element, attrs, controller) {
+              log('dep:' + !!controller);
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        element = $compile('<div main><div dep></div></div>')($rootScope);
+        expect(log).toEqual('dep:false');
+      });
+    });
+
+
+    it('should support multiple controllers', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('c1', valueFn({
+          controller: function() { this.name = 'c1'; }
+        }));
+        $compileProvider.directive('c2', valueFn({
+          controller: function() { this.name = 'c2'; }
+        }));
+        $compileProvider.directive('dep', function(log) {
+          return {
+            require: ['^c1', '^c2'],
+            link: function(scope, element, attrs, controller) {
+              log('dep:' + controller[0].name + '-' + controller[1].name);
+            }
+          };
+        });
+      });
+      inject(function(log, $compile, $rootScope) {
+        element = $compile('<div c1 c2><div dep></div></div>')($rootScope);
+        expect(log).toEqual('dep:c1-c2');
+      });
+
+    });
+  });
+
+
+  describe('transclude', function() {
+    it('should compile get templateFn', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('trans', function(log) {
+          return {
+            transclude: 'element',
+            priority: 2,
+            controller: function($transclude) { this.$transclude = $transclude; },
+            compile: function(element, attrs, template) {
+              log('compile: ' + angular.mock.dump(element));
+              return function(scope, element, attrs, ctrl) {
+                log('link');
+                var cursor = element;
+                template(scope.$new(), function(clone) {cursor.after(cursor = clone)});
+                ctrl.$transclude(function(clone) {cursor.after(clone)});
+              };
+            }
+          }
+        });
+      });
+      inject(function(log, $rootScope, $compile) {
+        element = $compile('<div><div high-log trans="text" log>{{$parent.$id}}-{{$id}};</div></div>')
+            ($rootScope);
+        $rootScope.$apply();
+        expect(log).toEqual('compile: <!-- trans: text -->; HIGH; link; LOG; LOG');
+        expect(element.text()).toEqual('001-002;001-003;');
+      });
+    });
+
+
+    it('should support transclude directive', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('trans', function() {
+          return {
+            transclude: 'content',
+            replace: true,
+            scope: true,
+            template: '<ul><li>W:{{$parent.$id}}-{{$id}};</li><li ng-transclude></li></ul>'
+          }
+        });
+      });
+      inject(function(log, $rootScope, $compile) {
+        element = $compile('<div><div trans>T:{{$parent.$id}}-{{$id}}<span>;</span></div></div>')
+            ($rootScope);
+        $rootScope.$apply();
+        expect(element.text()).toEqual('W:001-002;T:001-003;');
+        expect(jqLite(element.find('span')[0]).text()).toEqual('T:001-003');
+        expect(jqLite(element.find('span')[1]).text()).toEqual(';');
+      });
+    });
+
+
+    it('should transclude transcluded content', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('book', valueFn({
+          transclude: 'content',
+          template: '<div>book-<div chapter>(<div ng-transclude></div>)</div></div>'
+        }));
+        $compileProvider.directive('chapter', valueFn({
+          transclude: 'content',
+          templateUrl: 'chapter.html'
+        }));
+        $compileProvider.directive('section', valueFn({
+          transclude: 'content',
+          template: '<div>section-!<div ng-transclude></div>!</div></div>'
+        }));
+        return function($httpBackend) {
+          $httpBackend.
+              expect('GET', 'chapter.html').
+              respond('<div>chapter-<div section>[<div ng-transclude></div>]</div></div>');
+        }
+      });
+      inject(function(log, $rootScope, $compile, $httpBackend) {
+        element = $compile('<div><div book>paragraph</div></div>')($rootScope);
+        $rootScope.$apply();
+
+        expect(element.text()).toEqual('book-');
+
+        $httpBackend.flush();
+        $rootScope.$apply();
+        expect(element.text()).toEqual('book-chapter-section-![(paragraph)]!');
+      });
+    });
+
+
+    it('should only allow one transclude per element', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('first', valueFn({
+          scope: {},
+          transclude: 'content'
+        }));
+        $compileProvider.directive('second', valueFn({
+          transclude: 'content'
+        }));
+      });
+      inject(function($compile) {
+        expect(function() {
+          $compile('<div class="first second"></div>');
+        }).toThrow('Multiple directives [first, second] asking for transclusion on: <' +
+            (msie <= 8 ? 'DIV' : 'div') + ' class="first second ng-isolate-scope ng-scope">');
+      });
+    });
+
+
+    it('should remove transclusion scope, when the DOM is destroyed', function() {
+      module(function($compileProvider) {
+        $compileProvider.directive('box', valueFn({
+          transclude: 'content',
+          scope: { name: 'evaluate', show: 'accessor' },
+          template: '<div><h1>Hello: {{name}}!</h1><div ng-transclude></div></div>',
+          link: function(scope, element) {
+            scope.$watch(
+                function() { return scope.show(); },
+                function(show) {
+                  if (!show) {
+                    element.find('div').find('div').remove();
+                  }
+                }
+            );
+          }
+        }));
+      });
+      inject(function($compile, $rootScope) {
+        $rootScope.username = 'Misko';
+        $rootScope.select = true;
+        element = $compile(
+            '<div><div box name="username" show="select">user: {{username}}</div></div>')
+              ($rootScope);
+        $rootScope.$apply();
+        expect(element.text()).toEqual('Hello: Misko!user: Misko');
+
+        var widgetScope = $rootScope.$$childHead;
+        var transcludeScope = widgetScope.$$nextSibling;
+        expect(widgetScope.name).toEqual('Misko');
+        expect(widgetScope.$parent).toEqual($rootScope);
+        expect(transcludeScope.$parent).toEqual($rootScope);
+
+        var removed = 0;
+        $rootScope.$on('$destroy', function() { removed++; });
+        $rootScope.select = false;
+        $rootScope.$apply();
+        expect(element.text()).toEqual('Hello: Misko!');
+        expect(removed).toEqual(1);
+        expect(widgetScope.$$nextSibling).toEqual(null);
+      });
+    });
+
+  });
 });
diff --git a/test/service/controllerSpec.js b/test/service/controllerSpec.js
index 8b12eceb283c..2c0f8c62df7d 100644
--- a/test/service/controllerSpec.js
+++ b/test/service/controllerSpec.js
@@ -31,7 +31,7 @@ describe('$controller', function() {
     };
 
     var scope = {},
-        ctrl = $controller(MyClass, scope);
+        ctrl = $controller(MyClass, {$scope: scope});
 
     expect(ctrl.$scope).toBe(scope);
   });
diff --git a/test/service/scopeSpec.js b/test/service/scopeSpec.js
index c3a09cc87a87..179ff162aeee 100644
--- a/test/service/scopeSpec.js
+++ b/test/service/scopeSpec.js
@@ -53,6 +53,15 @@ describe('Scope', function() {
       $rootScope.a = 123;
       expect(child.a).toEqual(123);
     }));
+
+    it('should create a non prototypically inherited child scope', inject(function($rootScope) {
+      var child = $rootScope.$new(true);
+      $rootScope.a = 123;
+      expect(child.a).toBeUndefined();
+      expect(child.$parent).toEqual($rootScope);
+      expect(child.$new).toBe($rootScope.$new);
+      expect(child.$root).toBe($rootScope);
+    }));
   });