diff --git a/src/ng/directive/ngClass.js b/src/ng/directive/ngClass.js
index 79c55d7abdd6..70776ae3f303 100644
--- a/src/ng/directive/ngClass.js
+++ b/src/ng/directive/ngClass.js
@@ -3,12 +3,13 @@
 function classDirective(name, selector) {
   name = 'ngClass' + name;
   return ngDirective(function(scope, element, attr) {
+    var oldVal;
 
     scope.$watch(attr[name], ngClassWatchAction, true);
 
     attr.$observe('class', function(value) {
       var ngClass = scope.$eval(attr[name]);
-      ngClassWatchAction(ngClass, ngClass);
+      ngClassWatchAction(ngClass);
     });
 
 
@@ -26,13 +27,14 @@ function classDirective(name, selector) {
     }
 
 
-    function ngClassWatchAction(newVal, oldVal) {
+    function ngClassWatchAction(newVal) {
       if (selector === true || scope.$index % 2 === selector) {
         if (oldVal && (newVal !== oldVal)) {
           removeClass(oldVal);
         }
         addClass(newVal);
       }
+      oldVal = newVal;
     }
 
 
diff --git a/test/ng/directive/ngClassSpec.js b/test/ng/directive/ngClassSpec.js
index 4a53030bd21f..3dd4d0e27d62 100644
--- a/test/ng/directive/ngClassSpec.js
+++ b/test/ng/directive/ngClassSpec.js
@@ -52,7 +52,7 @@ describe('ngClass', function() {
     expect(element.hasClass('B')).toBeFalsy();
     expect(element.hasClass('AnotB')).toBeTruthy();
 
-    $rootScope.conditionB = function() { return true };
+    $rootScope.conditionB = function() { return true; };
     $rootScope.$digest();
     expect(element.hasClass('existing')).toBeTruthy();
     expect(element.hasClass('A')).toBeTruthy();
@@ -278,4 +278,15 @@ describe('ngClass', function() {
     expect(e2.hasClass('even')).toBeTruthy();
     expect(e2.hasClass('odd')).toBeFalsy();
   }));
+
+  it('should initialize classes correctly when $observe and $watch provide different initial values',
+    inject(function($rootScope, $compile) {
+      $rootScope.x = 'test';
+      element = $compile(
+        '<form name="f">' +
+          '<input name="x" ng-model="x" required ng-class="{error: f.x.$invalid}">' +
+        '</form>')($rootScope);
+      $rootScope.$digest();
+      expect(element.find('input').hasClass('error')).toBeFalsy();
+  }));
 });