diff --git a/src/ng/compile.js b/src/ng/compile.js
index 32c1d1cacd4c..b7eb759b3de2 100644
--- a/src/ng/compile.js
+++ b/src/ng/compile.js
@@ -1037,7 +1037,7 @@ function $CompileProvider($provide) {
             interpolateFn = $interpolate(attr[name], true);
           }
 
-          attr[name] = undefined;
+          attr[name] = interpolateFn(scope);
           ($$observers[name] || ($$observers[name] = [])).$$inter = true;
           (attr.$$observers && attr.$$observers[name].$$scope || scope).
             $watch(interpolateFn, function interpolateFnWatchAction(value) {
diff --git a/test/ng/compileSpec.js b/test/ng/compileSpec.js
index 3b69f60925b9..da8f2f8c1cd9 100644
--- a/test/ng/compileSpec.js
+++ b/test/ng/compileSpec.js
@@ -1381,9 +1381,10 @@ describe('$compile', function() {
     }));
 
 
-    it('should set interpolated attrs to undefined', inject(function($rootScope, $compile) {
+    it('should set interpolated attrs to initial interpolation value', inject(function($rootScope, $compile) {
+      $rootScope.whatever = 'test value';
       $compile('<div some-attr="{{whatever}}" observer></div>')($rootScope);
-      expect(directiveAttrs.someAttr).toBeUndefined();
+      expect(directiveAttrs.someAttr).toBe($rootScope.whatever);
     }));