diff --git a/src/ng/compile.js b/src/ng/compile.js
index 485d5079b254..862d7d385818 100644
--- a/src/ng/compile.js
+++ b/src/ng/compile.js
@@ -3213,14 +3213,13 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
 
             parentGet = $parse(attrs[attrName]);
 
-            destination[scopeName] = parentGet(scope);
+            var initialValue = destination[scopeName] = parentGet(scope);
             initialChanges[scopeName] = new SimpleChange(_UNINITIALIZED_VALUE, destination[scopeName]);
 
             removeWatch = scope.$watch(parentGet, function parentValueWatchAction(newValue, oldValue) {
-              if (newValue === oldValue) {
-                // If the new and old values are identical then this is the first time the watch has been triggered
-                // So instead we use the current value on the destination as the old value
-                oldValue = destination[scopeName];
+              if (oldValue === newValue) {
+                if (oldValue === initialValue) return;
+                oldValue = initialValue;
               }
               recordChanges(scopeName, newValue, oldValue);
               destination[scopeName] = newValue;
diff --git a/test/ng/compileSpec.js b/test/ng/compileSpec.js
index d424fb42f580..e4da3d81b035 100755
--- a/test/ng/compileSpec.js
+++ b/test/ng/compileSpec.js
@@ -3823,6 +3823,7 @@ describe('$compile', function() {
 
           $rootScope.$apply('a = 7');
           element = $compile('<c1 prop="a" attr="{{a}}"></c1>')($rootScope);
+
           expect(log).toEqual([
             {
               prop: jasmine.objectContaining({currentValue: 7}),
@@ -3862,6 +3863,7 @@ describe('$compile', function() {
         inject(function($compile, $rootScope) {
           $rootScope.$apply('a = 7');
           element = $compile('<c1 prop="a" attr="{{a}}"></c1>')($rootScope);
+
           expect(log).toEqual([
             {
               prop: jasmine.objectContaining({currentValue: 7}),
@@ -4744,6 +4746,7 @@ describe('$compile', function() {
     describe('one-way binding', function() {
       it('should update isolate when the identity of origin changes', inject(function() {
         compile('<div><span my-component ow-ref="obj">');
+
         expect(componentScope.owRef).toBeUndefined();
         expect(componentScope.owRefAlias).toBe(componentScope.owRef);
 
@@ -4780,6 +4783,7 @@ describe('$compile', function() {
 
       it('should update isolate when both change', inject(function() {
         compile('<div><span my-component ow-ref="name">');
+
         $rootScope.name = {mark:123};
         componentScope.owRef = 'misko';
 
@@ -4796,6 +4800,101 @@ describe('$compile', function() {
         expect(componentScope.owRefAlias).toBe($rootScope.name);
       }));
 
+      describe('initialization', function() {
+        var component, log;
+
+        beforeEach(function() {
+          log = [];
+          angular.module('owComponentTest', [])
+            .component('owComponent', {
+              bindings: { input: '<' },
+              controller: function() {
+                component = this;
+                this.input = 'constructor';
+                log.push('constructor');
+
+                this.$onInit = function() {
+                  this.input = '$onInit';
+                  log.push('$onInit');
+                };
+
+                this.$onChanges = function(changes) {
+                  if (changes.input) {
+                    log.push(['$onChanges', changes.input]);
+                  }
+                };
+              }
+            });
+        });
+
+        it('should not update isolate again after $onInit if outer has not changed', function() {
+          module('owComponentTest');
+          inject(function() {
+            $rootScope.name = 'outer';
+            compile('<ow-component input="name"></ow-component>');
+
+            expect($rootScope.name).toEqual('outer');
+            expect(component.input).toEqual('$onInit');
+
+            $rootScope.$apply();
+
+            expect($rootScope.name).toEqual('outer');
+            expect(component.input).toEqual('$onInit');
+
+            expect(log).toEqual([
+              'constructor',
+              ['$onChanges', jasmine.objectContaining({ currentValue: 'outer' })],
+              '$onInit'
+            ]);
+          });
+        });
+
+        it('should update isolate again after $onInit if outer has changed (before initial watchAction call)', function() {
+          module('owComponentTest');
+          inject(function() {
+            $rootScope.name = 'outer1';
+            compile('<ow-component input="name"></ow-component>');
+
+            expect(component.input).toEqual('$onInit');
+            $rootScope.$apply('name = "outer2"');
+
+            expect($rootScope.name).toEqual('outer2');
+            expect(component.input).toEqual('outer2');
+            expect(log).toEqual([
+              'constructor',
+              ['$onChanges', jasmine.objectContaining({ currentValue: 'outer1' })],
+              '$onInit',
+              ['$onChanges', jasmine.objectContaining({ currentValue: 'outer2', previousValue: 'outer1' })]
+            ]);
+          });
+        });
+
+        it('should update isolate again after $onInit if outer has changed (before initial watchAction call)', function() {
+          angular.module('owComponentTest')
+            .directive('changeInput', function() {
+              return function(scope, elem, attrs) {
+                scope.name = 'outer2';
+              };
+            });
+          module('owComponentTest');
+          inject(function() {
+            $rootScope.name = 'outer1';
+            compile('<ow-component input="name" change-input></ow-component>');
+
+            expect(component.input).toEqual('$onInit');
+            $rootScope.$digest();
+
+            expect($rootScope.name).toEqual('outer2');
+            expect(component.input).toEqual('outer2');
+            expect(log).toEqual([
+              'constructor',
+              ['$onChanges', jasmine.objectContaining({ currentValue: 'outer1' })],
+              '$onInit',
+              ['$onChanges', jasmine.objectContaining({ currentValue: 'outer2', previousValue: 'outer1' })]
+            ]);
+          });
+        });
+      });
 
       it('should not break when isolate and origin both change to the same value', inject(function() {
         $rootScope.name = 'aaa';
@@ -4819,7 +4918,6 @@ describe('$compile', function() {
         $rootScope.name = {mark:123};
         compile('<div><span my-component ow-ref="name">');
 
-        $rootScope.$apply();
         expect($rootScope.name).toEqual({mark:123});
         expect(componentScope.owRef).toBe($rootScope.name);
         expect(componentScope.owRefAlias).toBe($rootScope.name);
@@ -4836,7 +4934,6 @@ describe('$compile', function() {
         $rootScope.obj = {mark:123};
         compile('<div><span my-component ow-ref="obj">');
 
-        $rootScope.$apply();
         expect($rootScope.obj).toEqual({mark:123});
         expect(componentScope.owRef).toBe($rootScope.obj);
 
@@ -4849,6 +4946,7 @@ describe('$compile', function() {
 
       it('should not throw on non assignable expressions in the parent', inject(function() {
         compile('<div><span my-component ow-ref="\'hello \' + name">');
+
         $rootScope.name = 'world';
         $rootScope.$apply();
         expect(componentScope.owRef).toBe('hello world');
@@ -4865,7 +4963,7 @@ describe('$compile', function() {
 
       it('should not throw when assigning to undefined', inject(function() {
         compile('<div><span my-component>');
-        $rootScope.$apply();
+
         expect(componentScope.owRef).toBeUndefined();
 
         componentScope.owRef = 'ignore me';
@@ -4879,6 +4977,7 @@ describe('$compile', function() {
       it('should update isolate scope when "<"-bound NaN changes', inject(function() {
         $rootScope.num = NaN;
         compile('<div my-component ow-ref="num"></div>');
+
         var isolateScope = element.isolateScope();
         expect(isolateScope.owRef).toBeNaN();
 
@@ -4917,7 +5016,7 @@ describe('$compile', function() {
           $rootScope.name = 'georgios';
           $rootScope.obj = {name: 'pete'};
           compile('<div><span my-component ow-ref="[{name: name}, obj]">');
-          $rootScope.$apply();
+
           expect(componentScope.owRef).toEqual([{name: 'georgios'}, {name: 'pete'}]);
 
           $rootScope.name = 'lucas';
@@ -4931,7 +5030,7 @@ describe('$compile', function() {
           $rootScope.name = 'georgios';
           $rootScope.obj = {name: 'pete'};
           compile('<div><span my-component ow-ref="{name: name, item: obj}">');
-          $rootScope.$apply();
+
           expect(componentScope.owRef).toEqual({name: 'georgios', item: {name: 'pete'}});
 
           $rootScope.name = 'lucas';
@@ -4967,7 +5066,6 @@ describe('$compile', function() {
           function test(literalString, literalValue) {
             compile('<div><span my-component ow-ref="' + literalString + '">');
 
-            $rootScope.$apply();
             expect(componentScope.owRef).toBe(literalValue);
             dealoc(element);
           }
@@ -4976,6 +5074,7 @@ describe('$compile', function() {
         describe('optional one-way binding', function() {
           it('should update local when origin changes', inject(function() {
             compile('<div><span my-component ow-optref="name">');
+
             expect(componentScope.owOptref).toBeUndefined();
             expect(componentScope.owOptrefAlias).toBe(componentScope.owOptref);