diff --git a/CHANGELOG.md b/CHANGELOG.md
index d4c531a8b..7788bb51d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,7 @@
 ### Version 8.15
 * Supports PUT without a body parameter
+* Supports substitutions in `@Headers` like in `@Body`. (#326)
+  * **Note:** You might need to URL-encode literal values of `{` or `%` in your existing code.
 
 ### Version 8.14
 * Add support for RxJava Observable and Single return types via the `HystrixFeign` builder.
diff --git a/core/src/main/java/feign/Contract.java b/core/src/main/java/feign/Contract.java
index c38e58bc1..1e6fc6853 100644
--- a/core/src/main/java/feign/Contract.java
+++ b/core/src/main/java/feign/Contract.java
@@ -233,7 +233,7 @@ protected boolean processAnnotationsOnParameter(MethodMetadata data, Annotation[
         if (annotationType == Param.class) {
           String name = ((Param) annotation).value();
           checkState(emptyToNull(name) != null, "Param annotation was empty on param %s.",
-                     paramIndex);
+              paramIndex);
           nameParam(data, name, paramIndex);
           if (annotationType == Param.class) {
             Class<? extends Param.Expander> expander = ((Param) annotation).expander();
@@ -244,8 +244,8 @@ protected boolean processAnnotationsOnParameter(MethodMetadata data, Annotation[
           isHttpAnnotation = true;
           String varName = '{' + name + '}';
           if (data.template().url().indexOf(varName) == -1 &&
-              !searchMapValues(data.template().queries(), varName) &&
-              !searchMapValues(data.template().headers(), varName)) {
+              !searchMapValuesContainsExact(data.template().queries(), varName) &&
+              !searchMapValuesContainsSubstring(data.template().headers(), varName)) {
             data.formParams().add(name);
           }
         }
@@ -253,7 +253,8 @@ protected boolean processAnnotationsOnParameter(MethodMetadata data, Annotation[
       return isHttpAnnotation;
     }
 
-    private static <K, V> boolean searchMapValues(Map<K, Collection<V>> map, V search) {
+    private static <K, V> boolean searchMapValuesContainsExact(Map<K, Collection<V>> map,
+                                                               V search) {
       Collection<Collection<V>> values = map.values();
       if (values == null) {
         return false;
@@ -268,6 +269,24 @@ private static <K, V> boolean searchMapValues(Map<K, Collection<V>> map, V searc
       return false;
     }
 
+    private static <K, V> boolean searchMapValuesContainsSubstring(Map<K, Collection<String>> map,
+                                                                   String search) {
+      Collection<Collection<String>> values = map.values();
+      if (values == null) {
+        return false;
+      }
+
+      for (Collection<String> entry : values) {
+        for (String value : entry) {
+          if (value.indexOf(search) != -1) {
+            return true;
+          }
+        }
+      }
+
+      return false;
+    }
+
     private static Map<String, Collection<String>> toMap(String[] input) {
       Map<String, Collection<String>>
           result =
diff --git a/core/src/main/java/feign/Headers.java b/core/src/main/java/feign/Headers.java
index f7f413708..c00d9a996 100644
--- a/core/src/main/java/feign/Headers.java
+++ b/core/src/main/java/feign/Headers.java
@@ -8,7 +8,7 @@
 import static java.lang.annotation.RetentionPolicy.RUNTIME;
 
 /**
- * Expands headers supplied in the {@code value}.  Variables are permitted as values. <br>
+ * Expands headers supplied in the {@code value}.  Variables to the the right of the colon are expanded. <br>
  * <pre>
  * &#64;Headers("Content-Type: application/xml")
  * interface SoapApi {
@@ -24,9 +24,13 @@
  * }) void post(&#64;Param("token") String token);
  * ...
  * </pre>
- * <br> <strong>Note:</strong> Headers do not overwrite each other. All headers with the same name
- * will be included in the request. <br><br><b>Relationship to JAXRS</b><br> <br> The following two
- * forms are identical. <br> Feign:
+ * <br> <strong>Notes:</strong>
+ * <ul>
+ *   <li>If you'd like curly braces literally in the header, urlencode them first.</li>
+ *   <li>Headers do not overwrite each other. All headers with the same name will be included
+ *   in the request.</li>
+ * </ul>
+ * <br><b>Relationship to JAXRS</b><br> <br> The following two forms are identical. <br><br> Feign:
  * <pre>
  * &#64;RequestLine("POST /")
  * &#64;Headers({
diff --git a/core/src/main/java/feign/RequestTemplate.java b/core/src/main/java/feign/RequestTemplate.java
index 6cf047c39..5ce0d504f 100644
--- a/core/src/main/java/feign/RequestTemplate.java
+++ b/core/src/main/java/feign/RequestTemplate.java
@@ -215,15 +215,8 @@ public RequestTemplate resolve(Map<String, ?> unencoded) {
     for (String field : headers.keySet()) {
       Collection<String> resolvedValues = new ArrayList<String>();
       for (String value : valuesOrEmpty(headers, field)) {
-        String resolved;
-        if (value.indexOf('{') == 0) {
-          resolved = expand(value, unencoded);
-        } else {
-          resolved = value;
-        }
-        if (resolved != null) {
-          resolvedValues.add(resolved);
-        }
+        String resolved = urlDecode(expand(value, encoded));
+        resolvedValues.add(resolved);
       }
       resolvedHeaders.put(field, resolvedValues);
     }
diff --git a/core/src/test/java/feign/DefaultContractTest.java b/core/src/test/java/feign/DefaultContractTest.java
index 4d094c7fe..46f06c378 100644
--- a/core/src/test/java/feign/DefaultContractTest.java
+++ b/core/src/test/java/feign/DefaultContractTest.java
@@ -237,6 +237,19 @@ public void headerParamsParseIntoIndexToName() throws Exception {
 
     assertThat(md.indexToName())
         .containsExactly(entry(0, asList("authToken")));
+    assertThat(md.formParams()).isEmpty();
+  }
+
+  @Test
+  public void headerParamsParseIntoIndexToNameNotAtStart() throws Exception {
+    MethodMetadata md = parseAndValidateMetadata(HeaderParamsNotAtStart.class, "logout", String.class);
+
+    assertThat(md.template())
+        .hasHeaders(entry("Authorization", asList("Bearer {authToken}", "Foo")));
+
+    assertThat(md.indexToName())
+        .containsExactly(entry(0, asList("authToken")));
+    assertThat(md.formParams()).isEmpty();
   }
 
   @Test
@@ -358,6 +371,13 @@ interface HeaderParams {
     void logout(@Param("authToken") String token);
   }
 
+  interface HeaderParamsNotAtStart {
+
+    @RequestLine("POST /")
+    @Headers({"Authorization: Bearer {authToken}", "Authorization: Foo"})
+    void logout(@Param("authToken") String token);
+  }
+
   interface CustomExpander {
 
     @RequestLine("POST /?date={date}")
@@ -528,6 +548,34 @@ public void parameterizedHeaderExpandApi() throws Exception {
         .isEmpty();
   }
 
+  @Test
+  public void parameterizedHeaderNotStartingWithCurlyBraceExpandApi() throws Exception {
+    List<MethodMetadata>
+        md =
+        contract.parseAndValidatateMetadata(
+            ParameterizedHeaderNotStartingWithCurlyBraceExpandApi.class);
+
+    assertThat(md).hasSize(1);
+
+    assertThat(md.get(0).configKey())
+        .isEqualTo("ParameterizedHeaderNotStartingWithCurlyBraceExpandApi#getZone(String,String)");
+    assertThat(md.get(0).returnType())
+        .isEqualTo(String.class);
+    assertThat(md.get(0).template())
+        .hasHeaders(entry("Authorization", asList("Bearer {authHdr}")),
+            entry("Accept", asList("application/json")));
+    // Ensure that the authHdr expansion was properly detected and did not create a formParam
+    assertThat(md.get(0).formParams())
+        .isEmpty();
+  }
+
+  @Headers("Authorization: Bearer {authHdr}")
+  interface ParameterizedHeaderNotStartingWithCurlyBraceExpandApi {
+    @RequestLine("GET /api/{zoneId}")
+    @Headers("Accept: application/json")
+    String getZone(@Param("zoneId") String vhost, @Param("authHdr") String authHdr);
+  }
+
   @Headers("Authorization: {authHdr}")
   interface ParameterizedHeaderBase {
   }
diff --git a/core/src/test/java/feign/RequestTemplateTest.java b/core/src/test/java/feign/RequestTemplateTest.java
index a4a4cbca8..ec606df3a 100644
--- a/core/src/test/java/feign/RequestTemplateTest.java
+++ b/core/src/test/java/feign/RequestTemplateTest.java
@@ -142,6 +142,39 @@ public void resolveTemplateWithHeaderSubstitutions() {
         .hasHeaders(entry("Auth-Token", asList("1234")));
   }
 
+  @Test
+  public void resolveTemplateWithHeaderSubstitutionsNotAtStart() {
+    RequestTemplate template = new RequestTemplate().method("GET")
+        .header("Authorization", "Bearer {token}");
+
+    template.resolve(mapOf("token", "1234"));
+
+    assertThat(template)
+        .hasHeaders(entry("Authorization", asList("Bearer 1234")));
+  }
+
+  @Test
+  public void resolveTemplateWithHeaderWithURLEncodedElements() {
+    RequestTemplate template = new RequestTemplate().method("GET")
+        .header("Encoded", "%7Bvar%7D");
+
+    template.resolve(mapOf("var", "1234"));
+
+    assertThat(template)
+        .hasHeaders(entry("Encoded", asList("{var}")));
+  }
+
+  @Test
+  public void resolveTemplateWithHeaderEmptyResult() {
+    RequestTemplate template = new RequestTemplate().method("GET")
+        .header("Encoded", "{var}");
+
+    template.resolve(mapOf("var", ""));
+
+    assertThat(template)
+        .hasHeaders(entry("Encoded", asList("")));
+  }
+
   @Test
   public void resolveTemplateWithMixedRequestLineParams() throws Exception {
     RequestTemplate template = new RequestTemplate().method("GET")//