diff --git a/src/tooltip/test/tooltip2.spec.js b/src/tooltip/test/tooltip2.spec.js
index bb7e6ebba5..afdccef7c3 100644
--- a/src/tooltip/test/tooltip2.spec.js
+++ b/src/tooltip/test/tooltip2.spec.js
@@ -1,14 +1,15 @@
 describe('tooltip directive', function () {
 
-  var $rootScope, $compile, $document, $timeout;
+  var $rootScope, $compile, $document, $timeout, $position;
 
   beforeEach(module('ui.bootstrap.tooltip'));
   beforeEach(module('template/tooltip/tooltip-popup.html'));
-  beforeEach(inject(function (_$rootScope_, _$compile_, _$document_, _$timeout_) {
+  beforeEach(inject(function (_$rootScope_, _$compile_, _$document_, _$timeout_, _$position_) {
     $rootScope = _$rootScope_;
     $compile = _$compile_;
     $document = _$document_;
     $timeout = _$timeout_;
+    $position = _$position_;
   }));
 
   beforeEach(function(){
@@ -102,4 +103,38 @@ describe('tooltip directive', function () {
     });
 
   });
+  
+  describe('position', function() {
+    
+    beforeEach(function() {
+      spyOn($position, 'position').andCallThrough();
+    });
+    
+    it('is called once on mouse enter and leave', function () {
+      var fragment = compileTooltip('<span tooltip="tooltip text">Trigger here</span>');
+
+      expect($position.position).not.toHaveBeenCalled();
+    
+      fragment.find('span').trigger( 'mouseenter' );
+      expect($position.position.calls.length).toEqual(1);
+
+      closeTooltip(fragment.find('span'));
+      expect($position.position.calls.length).toEqual(1);
+    });
+    
+    it('is called once for content updates when is open', function () {
+      $rootScope.content = 'some text';
+      var fragment = compileTooltip('<span tooltip="{{ content }}">Trigger here</span>');
+
+      expect($position.position).not.toHaveBeenCalled();
+    
+      fragment.find('span').trigger( 'mouseenter' );
+      expect($position.position.calls.length).toEqual(1);
+      
+      $rootScope.content = 'some new text';
+      $rootScope.$digest();
+      $timeout.flush();
+      expect($position.position.calls.length).toEqual(1);
+    });
+  });
 });
\ No newline at end of file
diff --git a/src/tooltip/tooltip.js b/src/tooltip/tooltip.js
index 3176f96902..46e17f2f6f 100644
--- a/src/tooltip/tooltip.js
+++ b/src/tooltip/tooltip.js
@@ -109,13 +109,15 @@ angular.module( 'ui.bootstrap.tooltip', [ 'ui.bootstrap.position', 'ui.bootstrap
         restrict: 'EA',
         scope: true,
         link: function link ( scope, element, attrs ) {
-          var tooltip = $compile( template )( scope );
-          var transitionTimeout;
-          var popupTimeout;
-          var appendToBody = angular.isDefined( options.appendToBody ) ? options.appendToBody : false;
-          var triggers = getTriggers( undefined );
-          var hasRegisteredTriggers = false;
-          var hasEnableExp = angular.isDefined(attrs[prefix+'Enable']);
+          var tooltip = $compile( template )( scope ),
+              transitionTimeout,
+              popupTimeout,
+              appendToBody = angular.isDefined( options.appendToBody ) ? options.appendToBody : false,
+              triggers = getTriggers( undefined ),
+              hasRegisteredTriggers = false,
+              hasEnableExp = angular.isDefined(attrs[prefix+'Enable']),
+              position,
+              positionUpdateTimeout;
 
           // By default, the tooltip is not open.
           // TODO add ability to start tooltip opened
@@ -147,77 +149,74 @@ angular.module( 'ui.bootstrap.tooltip', [ 'ui.bootstrap.position', 'ui.bootstrap
             });
           }
           
-          // Show the tooltip popup element.
-          function show() {
-            var position,
-                ttWidth,
-                ttHeight,
+          // Calculate tootip's position
+          function updatePosition() {
+            var ttWidth = tooltip.prop( 'offsetWidth' ),
+                ttHeight = tooltip.prop( 'offsetHeight' ),
                 ttPosition;
-
-            // Don't show empty tooltips.
-            if ( ! scope.tt_content ) {
-              return;
-            }
-
-            // If there is a pending remove transition, we must cancel it, lest the
-            // tooltip be mysteriously removed.
-            if ( transitionTimeout ) {
-              $timeout.cancel( transitionTimeout );
-            }
-            
-            // Set the initial positioning.
-            tooltip.css({ top: 0, left: 0, display: 'block' });
-            
-            // Now we add it to the DOM because need some info about it. But it's not 
-            // visible yet anyway.
-            if ( appendToBody ) {
-                $document.find( 'body' ).append( tooltip );
-            } else {
-              element.after( tooltip );
-            }
-
-            // Get the position of the directive element.
-            position = appendToBody ? $position.offset( element ) : $position.position( element );
-
-            // Get the height and width of the tooltip so we can center it.
-            ttWidth = tooltip.prop( 'offsetWidth' );
-            ttHeight = tooltip.prop( 'offsetHeight' );
             
             // Calculate the tooltip's top and left coordinates to center it with
             // this directive.
             switch ( scope.tt_placement ) {
               case 'right':
                 ttPosition = {
-                  top: position.top + position.height / 2 - ttHeight / 2,
-                  left: position.left + position.width
+                  top: position.top + position.height / 2 - ttHeight / 2 + 'px',
+                  left: position.left + position.width + 'px'
                 };
                 break;
               case 'bottom':
                 ttPosition = {
-                  top: position.top + position.height,
-                  left: position.left + position.width / 2 - ttWidth / 2
+                  top: position.top + position.height + 'px',
+                  left: position.left + position.width / 2 - ttWidth / 2 + 'px'
                 };
                 break;
               case 'left':
                 ttPosition = {
-                  top: position.top + position.height / 2 - ttHeight / 2,
-                  left: position.left - ttWidth
+                  top: position.top + position.height / 2 - ttHeight / 2 + 'px',
+                  left: position.left - ttWidth + 'px'
                 };
                 break;
               default:
                 ttPosition = {
-                  top: position.top - ttHeight,
-                  left: position.left + position.width / 2 - ttWidth / 2
+                  top: position.top - ttHeight + 'px',
+                  left: position.left + position.width / 2 - ttWidth / 2 + 'px'
                 };
                 break;
             }
 
-            ttPosition.top += 'px';
-            ttPosition.left += 'px';
-
             // Now set the calculated positioning.
             tooltip.css( ttPosition );
-              
+          }
+          
+          // Show the tooltip popup element.
+          function show() {
+            // Don't show empty tooltips.
+            if ( ! scope.tt_content ) {
+              return;
+            }
+
+            // If there is a pending remove transition, we must cancel it, lest the
+            // tooltip be mysteriously removed.
+            if ( transitionTimeout ) {
+              $timeout.cancel( transitionTimeout );
+            }
+
+            tooltip.css({ display: 'block' });
+
+            // Now we add it to the DOM because need some info about it. But it's not 
+            // visible yet anyway.
+            if ( appendToBody ) {
+                $document.find( 'body' ).append( tooltip );
+            } else {
+              element.after( tooltip );
+            }
+
+            // Get the position of the directive element.
+            position = appendToBody ? $position.offset( element ) : $position.position( element );
+
+            // Place tooltip
+            updatePosition();
+
             // And show the tooltip.
             scope.tt_isOpen = true;
           }
@@ -248,8 +247,14 @@ angular.module( 'ui.bootstrap.tooltip', [ 'ui.bootstrap.position', 'ui.bootstrap
           attrs.$observe( type, function ( val ) {
             scope.tt_content = val;
 
-            if (!val && scope.tt_isOpen ) {
-              hide();
+            if (scope.tt_isOpen) {
+              if (!val) {
+                hide();
+              } else {
+                // Wait for content to be set on the tooltip element and adjust position
+                // based on the new width/height and last known position of the directive element.
+                positionUpdateTimeout = $timeout(updatePosition, 0, false);
+              }
             }
           });
 
@@ -311,6 +316,7 @@ angular.module( 'ui.bootstrap.tooltip', [ 'ui.bootstrap.position', 'ui.bootstrap
           scope.$on('$destroy', function onDestroyTooltip() {
             $timeout.cancel( transitionTimeout );
             $timeout.cancel( popupTimeout );
+            $timeout.cancel( positionUpdateTimeout );
             unregisterTriggers();
             tooltip.remove();
             tooltip.unbind();