diff --git a/modules/angular2/src/mock/location_mock.js b/modules/angular2/src/mock/location_mock.js
index 9297b8aaa4..3425b42d88 100644
--- a/modules/angular2/src/mock/location_mock.js
+++ b/modules/angular2/src/mock/location_mock.js
@@ -12,18 +12,24 @@ export class SpyLocation extends SpyObject {
   urlChanges:List<string>;
   _path:string;
   _subject:EventEmitter;
+  _baseHref:string;
 
   constructor() {
     super();
     this._path = '/';
     this.urlChanges = ListWrapper.create();
     this._subject = new EventEmitter();
+    this._baseHref = '';
   }
 
   setInitialPath(url:string) {
     this._path = url;
   }
 
+  setBaseHref(url:string) {
+    this._baseHref = url;
+  }
+
   path():string {
     return this._path;
   }
@@ -34,6 +40,10 @@ export class SpyLocation extends SpyObject {
     });
   }
 
+  normalizeAbsolutely(url) {
+    return this._baseHref + url;
+  }
+
   go(url:string) {
     if (this._path === url) {
       return;
diff --git a/modules/angular2/src/router/location.js b/modules/angular2/src/router/location.js
index 2786c182f2..741fad9d98 100644
--- a/modules/angular2/src/router/location.js
+++ b/modules/angular2/src/router/location.js
@@ -27,6 +27,13 @@ export class Location {
     return this._stripBaseHref(stripIndexHtml(url));
   }
 
+  normalizeAbsolutely(url) {
+    if (url[0] != '/') {
+      url = '/' + url;
+    }
+    return this._addBaseHref(url);
+  }
+
   _stripBaseHref(url) {
     if (this._baseHref.length > 0 && StringWrapper.startsWith(url, this._baseHref)) {
       return StringWrapper.substring(url, this._baseHref.length);
@@ -34,8 +41,15 @@ export class Location {
     return url;
   }
 
+  _addBaseHref(url) {
+    if (!StringWrapper.startsWith(url, this._baseHref)) {
+      return this._baseHref + url;
+    }
+    return url;
+  }
+
   go(url:string) {
-    var finalUrl = url[0] == '/' ? url : this._baseHref + '/' + url;
+    var finalUrl = this.normalizeAbsolutely(url);
     this._browserLocation.pushState(null, '', finalUrl);
   }
 
diff --git a/modules/angular2/src/router/router_link.js b/modules/angular2/src/router/router_link.js
index b959133214..e49fcf9a63 100644
--- a/modules/angular2/src/router/router_link.js
+++ b/modules/angular2/src/router/router_link.js
@@ -6,6 +6,7 @@ import {isPresent} from 'angular2/src/facade/lang';
 import {DOM} from 'angular2/src/dom/dom_adapter';
 
 import {Router} from './router';
+import {Location} from './location';
 
 /**
  * The RouterLink directive lets you link to specific parts of your app.
@@ -41,11 +42,13 @@ export class RouterLink {
   _route:string;
   _params:any;
   _router:Router;
+  _location:Location;
   _href:string;
 
-  constructor(elementRef:ElementRef, router:Router) {
+  constructor(elementRef:ElementRef, router:Router, location:Location) {
     this._domEl = elementRef.domElement;
     this._router = router;
+    this._location = location;
     this._params = StringMapWrapper.create();
     DOM.on(this._domEl, 'click', (evt) => {
       evt.preventDefault();
@@ -64,10 +67,10 @@ export class RouterLink {
   onAllChangesDone() {
     if (isPresent(this._route) && isPresent(this._params)) {
       var newHref = this._router.generate(this._route, this._params);
-      this._href = newHref;
+      this._href = this._location.normalizeAbsolutely(newHref);
       // Keeping the link on the element to support contextual menu `copy link`
       // and other in-browser affordances.
-      DOM.setAttribute(this._domEl, 'href', newHref);
+      DOM.setAttribute(this._domEl, 'href', this._href);
     }
   }
 }
diff --git a/modules/angular2/test/router/outlet_spec.js b/modules/angular2/test/router/outlet_spec.js
index 8d21b65b11..4e56c7c87f 100644
--- a/modules/angular2/test/router/outlet_spec.js
+++ b/modules/angular2/test/router/outlet_spec.js
@@ -136,6 +136,19 @@ export function main() {
     }));
 
 
+    it('should generate absolute hrefs that include the base href', inject([AsyncTestCompleter], (async) => {
+      location.setBaseHref('/my/base');
+      compile('<a href="hello" router-link="user"></a>')
+        .then((_) => rtr.config({'path': '/user', 'component': UserCmp, 'as': 'user'}))
+        .then((_) => rtr.navigate('/a/b'))
+        .then((_) => {
+          view.detectChanges();
+          expect(DOM.getAttribute(view.rootNodes[0].childNodes[0], 'href')).toEqual('/my/base/user');
+          async.done();
+        });
+    }));
+
+
     it('should generate link hrefs without params', inject([AsyncTestCompleter], (async) => {
       compile('<a href="hello" router-link="user"></a>')
         .then((_) => rtr.config({'path': '/user', 'component': UserCmp, 'as': 'user'}))