diff --git a/hadoop-yarn-project/CHANGES.txt b/hadoop-yarn-project/CHANGES.txt
index 316de3953ed..1d373136784 100644
--- a/hadoop-yarn-project/CHANGES.txt
+++ b/hadoop-yarn-project/CHANGES.txt
@@ -287,6 +287,8 @@ Release 2.0.5-beta - UNRELEASED
     YARN-507. Add interface visibility and stability annotations to FS 
     interfaces/classes. (kkambatl via tucu)
 
+    YARN-637. FS: maxAssign is not honored. (kkambatl via tucu)
+
 Release 2.0.4-alpha - 2013-04-25 
 
   INCOMPATIBLE CHANGES
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/FairScheduler.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/FairScheduler.java
index 15f3eba65e8..4593c41e352 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/FairScheduler.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/FairScheduler.java
@@ -832,6 +832,7 @@ public class FairScheduler implements ResourceScheduler {
         if (Resources.greaterThan(RESOURCE_CALCULATOR, clusterCapacity,
               queueMgr.getRootQueue().assignContainer(node),
               Resources.none())) {
+          assignedContainers++;
           assignedContainer = true;
         }
         if (!assignedContainer) { break; }
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/TestFairScheduler.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/TestFairScheduler.java
index b26f4c1162a..d2598be69f2 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/TestFairScheduler.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/fair/TestFairScheduler.java
@@ -1382,6 +1382,37 @@ public class TestFairScheduler {
     assertEquals(1, app2.getLiveContainers().size());
   }
 
+  @Test(timeout = 3000)
+  public void testMaxAssign() throws AllocationConfigurationException {
+    // set required scheduler configs
+    scheduler.assignMultiple = true;
+    scheduler.getQueueManager().getLeafQueue("root.default")
+        .setPolicy(SchedulingPolicy.getDefault());
+
+    RMNode node = MockNodes.newNodeInfo(1, Resources.createResource(16384));
+    NodeAddedSchedulerEvent nodeEvent = new NodeAddedSchedulerEvent(node);
+    NodeUpdateSchedulerEvent updateEvent = new NodeUpdateSchedulerEvent(node);
+    scheduler.handle(nodeEvent);
+
+    ApplicationAttemptId attId =
+        createSchedulingRequest(1024, "root.default", "user", 8);
+    FSSchedulerApp app = scheduler.applications.get(attId);
+
+    // set maxAssign to 2: only 2 containers should be allocated
+    scheduler.maxAssign = 2;
+    scheduler.update();
+    scheduler.handle(updateEvent);
+    assertEquals("Incorrect number of containers allocated", 2, app
+        .getLiveContainers().size());
+
+    // set maxAssign to -1: all remaining containers should be allocated
+    scheduler.maxAssign = -1;
+    scheduler.update();
+    scheduler.handle(updateEvent);
+    assertEquals("Incorrect number of containers allocated", 8, app
+        .getLiveContainers().size());
+  }
+
   /**
    * Test to verify the behavior of
    * {@link FSQueue#assignContainer(FSSchedulerNode)})