diff --git a/hadoop-yarn-project/CHANGES.txt b/hadoop-yarn-project/CHANGES.txt
index 1481e0f87ca..fadc37a82e4 100644
--- a/hadoop-yarn-project/CHANGES.txt
+++ b/hadoop-yarn-project/CHANGES.txt
@@ -94,6 +94,9 @@ Release 2.0.5-beta - UNRELEASED
     YARN-474. Fix CapacityScheduler to trigger application-activation when
     am-resource-percent configuration is refreshed. (Zhijie Shen via vinodkv)
 
+    YARN-209. Fix CapacityScheduler to trigger application-activation when
+    the cluster capacity changes. (Zhijie Shen via vinodkv)
+
 Release 2.0.4-alpha - UNRELEASED
 
   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/capacity/LeafQueue.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/LeafQueue.java
index 1785ec565a6..efc6e3efb25 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/LeafQueue.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/LeafQueue.java
@@ -1481,7 +1481,11 @@ public class LeafQueue implements CSQueue {
     CSQueueUtils.updateQueueStatistics(
         resourceCalculator, this, getParent(), clusterResource, 
         minimumAllocation);
-    
+
+    // queue metrics are updated, more resource may be available
+    // activate the pending applications if possible
+    activateApplications();
+
     // Update application properties
     for (FiCaSchedulerApp application : activeApplications) {
       synchronized (application) {
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRM.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRM.java
index 1a161268474..939443bc5ea 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRM.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRM.java
@@ -26,10 +26,12 @@ import junit.framework.Assert;
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
 import org.apache.hadoop.yarn.api.protocolrecords.GetNewApplicationResponse;
+import org.apache.hadoop.yarn.api.records.ApplicationAttemptId;
 import org.apache.hadoop.yarn.api.records.Container;
 import org.apache.hadoop.yarn.api.records.ContainerId;
 import org.apache.hadoop.yarn.api.records.ContainerState;
 import org.apache.hadoop.yarn.api.records.ResourceRequest;
+import org.apache.hadoop.yarn.conf.YarnConfiguration;
 import org.apache.hadoop.yarn.server.resourcemanager.rmapp.RMApp;
 import org.apache.hadoop.yarn.server.resourcemanager.rmapp.attempt.RMAppAttempt;
 import org.apache.hadoop.yarn.server.resourcemanager.rmapp.attempt.RMAppAttemptState;
@@ -135,6 +137,51 @@ public class TestRM {
     rm.stop();
   }
 
+  @Test (timeout = 30000)
+  public void testActivatingApplicationAfterAddingNM() throws Exception {
+    YarnConfiguration conf = new YarnConfiguration();
+
+    MockRM rm1 = new MockRM(conf);
+
+    // start like normal because state is empty
+    rm1.start();
+
+    // app that gets launched
+    RMApp app1 = rm1.submitApp(200);
+
+    // app that does not get launched
+    RMApp app2 = rm1.submitApp(200);
+
+    // app1 and app2 should be scheduled, but because no resource is available,
+    // they are not activated.
+    RMAppAttempt attempt1 = app1.getCurrentAppAttempt();
+    ApplicationAttemptId attemptId1 = attempt1.getAppAttemptId();
+    rm1.waitForState(attemptId1, RMAppAttemptState.SCHEDULED);
+    RMAppAttempt attempt2 = app2.getCurrentAppAttempt();
+    ApplicationAttemptId attemptId2 = attempt2.getAppAttemptId();
+    rm1.waitForState(attemptId2, RMAppAttemptState.SCHEDULED);
+
+    MockNM nm1 = new MockNM("h1:1234", 15120, rm1.getResourceTrackerService());
+    MockNM nm2 = new MockNM("h2:5678", 15120, rm1.getResourceTrackerService());
+    nm1.registerNode();
+    nm2.registerNode();
+
+    //kick the scheduling
+    nm1.nodeHeartbeat(true);
+
+    // app1 should be allocated now
+    rm1.waitForState(attemptId1, RMAppAttemptState.ALLOCATED);
+    rm1.waitForState(attemptId2, RMAppAttemptState.SCHEDULED);
+
+    nm2.nodeHeartbeat(true);
+
+    // app2 should be allocated now
+    rm1.waitForState(attemptId1, RMAppAttemptState.ALLOCATED);
+    rm1.waitForState(attemptId2, RMAppAttemptState.ALLOCATED);
+
+    rm1.stop();
+  }
+
   public static void main(String[] args) throws Exception {
     TestRM t = new TestRM();
     t.testGetNewAppId();
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/capacity/TestLeafQueue.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/TestLeafQueue.java
index 0460b3f6ad3..828c796d011 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/TestLeafQueue.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/scheduler/capacity/TestLeafQueue.java
@@ -1625,6 +1625,49 @@ public class TestLeafQueue {
     assertEquals(0, e.pendingApplications.size());
   }
 
+  @Test (timeout = 30000)
+  public void testActivateApplicationByUpdatingClusterResource()
+      throws Exception {
+
+    // Manipulate queue 'e'
+    LeafQueue e = stubLeafQueue((LeafQueue)queues.get(E));
+
+    // Users
+    final String user_e = "user_e";
+
+    // Submit applications
+    final ApplicationAttemptId appAttemptId_0 =
+        TestUtils.getMockApplicationAttemptId(0, 0);
+    FiCaSchedulerApp app_0 =
+        new FiCaSchedulerApp(appAttemptId_0, user_e, e,
+            mock(ActiveUsersManager.class), rmContext);
+    e.submitApplication(app_0, user_e, E);
+
+    final ApplicationAttemptId appAttemptId_1 =
+        TestUtils.getMockApplicationAttemptId(1, 0);
+    FiCaSchedulerApp app_1 =
+        new FiCaSchedulerApp(appAttemptId_1, user_e, e,
+            mock(ActiveUsersManager.class), rmContext);
+    e.submitApplication(app_1, user_e, E);  // same user
+
+    final ApplicationAttemptId appAttemptId_2 =
+        TestUtils.getMockApplicationAttemptId(2, 0);
+    FiCaSchedulerApp app_2 =
+        new FiCaSchedulerApp(appAttemptId_2, user_e, e,
+            mock(ActiveUsersManager.class), rmContext);
+    e.submitApplication(app_2, user_e, E);  // same user
+
+    // before updating cluster resource
+    assertEquals(2, e.activeApplications.size());
+    assertEquals(1, e.pendingApplications.size());
+
+    e.updateClusterResource(Resources.createResource(200 * 16 * GB, 100 * 32));
+
+    // after updating cluster resource
+    assertEquals(3, e.activeApplications.size());
+    assertEquals(0, e.pendingApplications.size());
+  }
+
   public boolean hasQueueACL(List<QueueUserACLInfo> aclInfos, QueueACL acl) {
     for (QueueUserACLInfo aclInfo : aclInfos) {
       if (aclInfo.getUserAcls().contains(acl)) {