diff --git a/modules/angular2/src/compiler/view_compiler/view_binder.ts b/modules/angular2/src/compiler/view_compiler/view_binder.ts
index 806ba523ed..1cd1136727 100644
--- a/modules/angular2/src/compiler/view_compiler/view_binder.ts
+++ b/modules/angular2/src/compiler/view_compiler/view_binder.ts
@@ -103,6 +103,7 @@ class ViewBinderVisitor implements TemplateAstVisitor {
       bindDirectiveDestroyLifecycleCallbacks(directiveAst.directive, directiveInstance,
                                              compileElement);
     });
+    bindView(compileElement.embeddedView, ast.children);
     return null;
   }
 
diff --git a/modules/angular2/src/compiler/view_compiler/view_builder.ts b/modules/angular2/src/compiler/view_compiler/view_builder.ts
index c6abdb06e2..7fc3d3aeee 100644
--- a/modules/angular2/src/compiler/view_compiler/view_builder.ts
+++ b/modules/angular2/src/compiler/view_compiler/view_builder.ts
@@ -50,8 +50,6 @@ import {
   CompileTokenMetadata
 } from '../compile_metadata';
 
-import {bindView} from './view_binder';
-
 const IMPLICIT_TEMPLATE_VAR = '\$implicit';
 const CLASS_ATTR = 'class';
 const STYLE_ATTR = 'style';
@@ -65,28 +63,28 @@ export class ViewCompileDependency {
 }
 
 export function buildView(view: CompileView, template: TemplateAst[],
-                          targetDependencies: ViewCompileDependency[],
-                          targetStatements: o.Statement[]): number {
-  var builderVisitor = new ViewBuilderVisitor(view, targetDependencies, targetStatements);
+                          targetDependencies: ViewCompileDependency[]): number {
+  var builderVisitor = new ViewBuilderVisitor(view, targetDependencies);
   templateVisitAll(builderVisitor, template, view.declarationElement.isNull() ?
                                                  view.declarationElement :
                                                  view.declarationElement.parent);
-  // Need to separate binding from creation to be able to refer to
-  // variables that have been declared after usage.
-  bindView(view, template);
-  view.afterNodes();
-
-  createViewTopLevelStmts(view, targetStatements);
-
   return builderVisitor.nestedViewCount;
 }
 
+export function finishView(view: CompileView, targetStatements: o.Statement[]) {
+  view.afterNodes();
+  createViewTopLevelStmts(view, targetStatements);
+  view.nodes.forEach((node) => {
+    if (node instanceof CompileElement && node.hasEmbeddedView) {
+      finishView(node.embeddedView, targetStatements);
+    }
+  });
+}
 
 class ViewBuilderVisitor implements TemplateAstVisitor {
   nestedViewCount: number = 0;
 
-  constructor(public view: CompileView, public targetDependencies: ViewCompileDependency[],
-              public targetStatements: o.Statement[]) {}
+  constructor(public view: CompileView, public targetDependencies: ViewCompileDependency[]) {}
 
   private _isRootNode(parent: CompileElement): boolean { return parent.view !== this.view; }
 
@@ -284,8 +282,7 @@ class ViewBuilderVisitor implements TemplateAstVisitor {
     var embeddedView = new CompileView(
         this.view.component, this.view.genConfig, this.view.pipeMetas, o.NULL_EXPR,
         this.view.viewIndex + this.nestedViewCount, compileElement, templateVariableBindings);
-    this.nestedViewCount +=
-        buildView(embeddedView, ast.children, this.targetDependencies, this.targetStatements);
+    this.nestedViewCount += buildView(embeddedView, ast.children, this.targetDependencies);
 
     compileElement.beforeChildren();
     this._addRootNodeAndProject(compileElement, ast.ngContentIndex, parent);
diff --git a/modules/angular2/src/compiler/view_compiler/view_compiler.ts b/modules/angular2/src/compiler/view_compiler/view_compiler.ts
index 39cc3e7169..ae64c4a953 100644
--- a/modules/angular2/src/compiler/view_compiler/view_compiler.ts
+++ b/modules/angular2/src/compiler/view_compiler/view_compiler.ts
@@ -3,7 +3,8 @@ import {Injectable} from 'angular2/src/core/di';
 import * as o from '../output/output_ast';
 import {CompileElement} from './compile_element';
 import {CompileView} from './compile_view';
-import {buildView, ViewCompileDependency} from './view_builder';
+import {buildView, finishView, ViewCompileDependency} from './view_builder';
+import {bindView} from './view_binder';
 
 import {CompileDirectiveMetadata, CompilePipeMetadata} from '../compile_metadata';
 
@@ -25,7 +26,12 @@ export class ViewCompiler {
     var dependencies = [];
     var view = new CompileView(component, this._genConfig, pipes, styles, 0,
                                CompileElement.createNull(), []);
-    buildView(view, template, dependencies, statements);
+    buildView(view, template, dependencies);
+    // Need to separate binding from creation to be able to refer to
+    // variables that have been declared after usage.
+    bindView(view, template);
+    finishView(view, statements);
+
     return new ViewCompileResult(statements, view.viewFactory.name, dependencies);
   }
 }
diff --git a/modules/angular2/test/core/linker/integration_spec.ts b/modules/angular2/test/core/linker/integration_spec.ts
index 0635c369d6..560ca2715f 100644
--- a/modules/angular2/test/core/linker/integration_spec.ts
+++ b/modules/angular2/test/core/linker/integration_spec.ts
@@ -587,18 +587,16 @@ function declareTests(isJit: boolean) {
                (tcb: TestComponentBuilder, async) => {
                    tcb.overrideView(
                           MyComp, new ViewMetadata({
-                            template: '<p>{{alice.ctxProp}}<child-cmp var-alice></child-cmp></p>',
-                            directives: [ChildComp]
+                            template:
+                                '<template [ngIf]="true">{{alice.ctxProp}}</template>|{{alice.ctxProp}}|<child-cmp var-alice></child-cmp>',
+                            directives: [ChildComp, NgIf]
                           }))
 
                        .createAsync(MyComp)
                        .then((fixture) => {
                          fixture.detectChanges();
 
-                         expect(fixture.debugElement.nativeElement)
-                             .toHaveText('hellohello');  // this first one is the
-                                                         // component, the second one is
-                                                         // the text binding
+                         expect(fixture.debugElement.nativeElement).toHaveText('hello|hello|hello');
                          async.done();
                        })}));