diff --git a/gcloud/datastore/test_transaction.py b/gcloud/datastore/test_transaction.py
index b0841489a158..3a7080a3f1db 100644
--- a/gcloud/datastore/test_transaction.py
+++ b/gcloud/datastore/test_transaction.py
@@ -112,7 +112,6 @@ def test_context_manager_no_raise(self):
         self.assertEqual(xact.id(), None)
 
     def test_context_manager_w_raise(self):
-        # See https://github.com/GoogleCloudPlatform/gcloud-python/issues/136
         class Foo(Exception):
             pass
         _DATASET = 'DATASET'
@@ -127,13 +126,10 @@ class Foo(Exception):
                 self.assertTrue(connection._xact is xact)
                 raise Foo()
         except Foo:
-            pass  # XXX
-            # self.assertEqual(xact.id(), None)
-            # self.assertEqual(connection._rolled_back, _DATASET))
-            # self.assertEqual(connection._xact, None)
-        # XXX should *not* have committed
-        self.assertEqual(connection._committed, (_DATASET, mutation))
-        # self.assertEqual(connection._committed, None)
+            self.assertEqual(xact.id(), None)
+            self.assertEqual(connection._rolled_back, _DATASET)
+            self.assertEqual(connection._xact, None)
+        self.assertEqual(connection._committed, None)
         self.assertTrue(connection._xact is None)
         self.assertEqual(xact.id(), None)
 
diff --git a/gcloud/datastore/transaction.py b/gcloud/datastore/transaction.py
index c8cf88979e05..50e1cf957589 100644
--- a/gcloud/datastore/transaction.py
+++ b/gcloud/datastore/transaction.py
@@ -21,18 +21,15 @@ class Transaction(object):
     ...   entity1.save()
     ...   entity2.save()
 
-  To rollback a transaction if there is an error::
+  By default, the transaction is rolled back is an error::
 
     >>> from gcloud import datastore
     >>> dataset = datastore.get_dataset('dataset-id', email, key_path)
     >>> with dataset.transaction() as t:
-    ...   try:
-    ...     do_some_work()
-    ...     entity1.save()
-    ...   except:
-    ...     t.rollback()
+    ...   do_some_work()
+    ...   raise Exception() # rolls back
 
-  If the transaction isn't rolled back,
+  If the transaction block exists without an exception,
   it will commit by default.
 
   .. warning::
@@ -249,4 +246,7 @@ def __enter__(self):
     return self
 
   def __exit__(self, exc_type, exc_val, exc_tb):
-    self.commit()
+    if exc_type is None:
+      self.commit()
+    else:
+      self.rollback()