diff --git a/src/main/java/io/reactivex/Observable.java b/src/main/java/io/reactivex/Observable.java
index e4460639bb..c5d14e81b2 100644
--- a/src/main/java/io/reactivex/Observable.java
+++ b/src/main/java/io/reactivex/Observable.java
@@ -5736,7 +5736,7 @@ public final <R> Observable<R> concatMapEagerDelayError(Function<? super T, ? ex
     @SchedulerSupport(SchedulerSupport.NONE)
     public final <U> Observable<U> concatMapIterable(final Function<? super T, ? extends Iterable<? extends U>> mapper) {
         ObjectHelper.requireNonNull(mapper, "mapper is null");
-        return concatMap(ObservableInternalHelper.flatMapIntoIterable(mapper));
+        return RxJavaPlugins.onAssembly(new ObservableFlattenIterable<T, U>(this, mapper));
     }
 
     /**
@@ -7188,7 +7188,7 @@ public final <U, R> Observable<R> flatMap(Function<? super T, ? extends Observab
     @SchedulerSupport(SchedulerSupport.NONE)
     public final <U> Observable<U> flatMapIterable(final Function<? super T, ? extends Iterable<? extends U>> mapper) {
         ObjectHelper.requireNonNull(mapper, "mapper is null");
-        return flatMap(ObservableInternalHelper.flatMapIntoIterable(mapper));
+        return RxJavaPlugins.onAssembly(new ObservableFlattenIterable<T, U>(this, mapper));
     }
 
     /**
diff --git a/src/main/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java b/src/main/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java
new file mode 100644
index 0000000000..3411bc8f22
--- /dev/null
+++ b/src/main/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java
@@ -0,0 +1,146 @@
+/**
+ * Copyright 2016 Netflix, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in
+ * compliance with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is
+ * distributed on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See
+ * the License for the specific language governing permissions and limitations under the License.
+ */
+
+package io.reactivex.internal.operators.observable;
+
+import java.util.Iterator;
+
+import io.reactivex.*;
+import io.reactivex.disposables.Disposable;
+import io.reactivex.exceptions.Exceptions;
+import io.reactivex.functions.Function;
+import io.reactivex.internal.disposables.DisposableHelper;
+import io.reactivex.internal.functions.ObjectHelper;
+import io.reactivex.plugins.RxJavaPlugins;
+
+/**
+ * Maps a sequence into an Iterable and emits its values.
+ *
+ * @param <T> the input value type to map to Iterable
+ * @param <R> the element type of the Iterable and the output
+ */
+public final class ObservableFlattenIterable<T, R> extends AbstractObservableWithUpstream<T, R> {
+
+    final Function<? super T, ? extends Iterable<? extends R>> mapper;
+
+    public ObservableFlattenIterable(ObservableSource<T> source,
+            Function<? super T, ? extends Iterable<? extends R>> mapper) {
+        super(source);
+        this.mapper = mapper;
+    }
+
+    @Override
+    protected void subscribeActual(Observer<? super R> observer) {
+        source.subscribe(new FlattenIterableObserver<T, R>(observer, mapper));
+    }
+
+    static final class FlattenIterableObserver<T, R> implements Observer<T>, Disposable {
+        final Observer<? super R> actual;
+
+        final Function<? super T, ? extends Iterable<? extends R>> mapper;
+
+        Disposable d;
+
+        FlattenIterableObserver(Observer<? super R> actual, Function<? super T, ? extends Iterable<? extends R>> mapper) {
+            this.actual = actual;
+            this.mapper = mapper;
+        }
+
+        @Override
+        public void onSubscribe(Disposable d) {
+            if (DisposableHelper.validate(this.d, d)) {
+                this.d = d;
+
+                actual.onSubscribe(this);
+            }
+        }
+
+        @Override
+        public void onNext(T value) {
+            if (d == DisposableHelper.DISPOSED) {
+                return;
+            }
+
+            Iterator<? extends R> it;
+
+            try {
+                it = mapper.apply(value).iterator();
+            } catch (Throwable ex) {
+                Exceptions.throwIfFatal(ex);
+                d.dispose();
+                onError(ex);
+                return;
+            }
+
+            Observer<? super R> a = actual;
+
+            for (;;) {
+                boolean b;
+
+                try {
+                    b = it.hasNext();
+                } catch (Throwable ex) {
+                    Exceptions.throwIfFatal(ex);
+                    d.dispose();
+                    onError(ex);
+                    return;
+                }
+
+                if (b) {
+                    R v;
+
+                    try {
+                        v = ObjectHelper.requireNonNull(it.next(), "The iterator returned a null value");
+                    } catch (Throwable ex) {
+                        Exceptions.throwIfFatal(ex);
+                        d.dispose();
+                        onError(ex);
+                        return;
+                    }
+
+                    a.onNext(v);
+                } else {
+                    break;
+                }
+            }
+        }
+
+        @Override
+        public void onError(Throwable e) {
+            if (d == DisposableHelper.DISPOSED) {
+                RxJavaPlugins.onError(e);
+                return;
+            }
+            actual.onError(e);
+        }
+
+        @Override
+        public void onComplete() {
+            if (d == DisposableHelper.DISPOSED) {
+                return;
+            }
+            actual.onComplete();
+        }
+
+        @Override
+        public boolean isDisposed() {
+            return d.isDisposed();
+        }
+
+        @Override
+        public void dispose() {
+            d.dispose();
+            d = DisposableHelper.DISPOSED;
+        }
+    }
+}
diff --git a/src/perf/java/io/reactivex/FlatMapJustPerf.java b/src/perf/java/io/reactivex/FlatMapJustPerf.java
new file mode 100644
index 0000000000..9a67723212
--- /dev/null
+++ b/src/perf/java/io/reactivex/FlatMapJustPerf.java
@@ -0,0 +1,66 @@
+/**
+ * Copyright 2016 Netflix, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in
+ * compliance with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is
+ * distributed on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See
+ * the License for the specific language governing permissions and limitations under the License.
+ */
+
+package io.reactivex;
+
+import java.util.concurrent.TimeUnit;
+
+import org.openjdk.jmh.annotations.*;
+import org.openjdk.jmh.infra.Blackhole;
+import org.reactivestreams.Publisher;
+
+import io.reactivex.functions.Function;
+
+@BenchmarkMode(Mode.Throughput)
+@Warmup(iterations = 5)
+@Measurement(iterations = 5, time = 5, timeUnit = TimeUnit.SECONDS)
+@OutputTimeUnit(TimeUnit.SECONDS)
+@Fork(value = 1)
+@State(Scope.Thread)
+public class FlatMapJustPerf {
+    @Param({ "1", "10", "100", "1000", "10000", "100000", "1000000" })
+    public int times;
+
+    Flowable<Integer> flowable;
+
+    Observable<Integer> observable;
+
+    @Setup
+    public void setup() {
+        Integer[] array = new Integer[times];
+
+        flowable = Flowable.fromArray(array).flatMap(new Function<Integer, Publisher<Integer>>() {
+            @Override
+            public Publisher<Integer> apply(Integer v) throws Exception {
+                return Flowable.just(v);
+            }
+        });
+
+        observable = Observable.fromArray(array).flatMap(new Function<Integer, Observable<Integer>>() {
+            @Override
+            public Observable<Integer> apply(Integer v) throws Exception {
+                return Observable.just(v);
+            }
+        });
+    }
+
+    @Benchmark
+    public void flowable(Blackhole bh) {
+        flowable.subscribe(new PerfConsumer(bh));
+    }
+
+    @Benchmark
+    public void observable(Blackhole bh) {
+        observable.subscribe(new PerfConsumer(bh));
+    }
+}
\ No newline at end of file
diff --git a/src/perf/java/io/reactivex/FlattenCrossMapPerf.java b/src/perf/java/io/reactivex/FlattenCrossMapPerf.java
new file mode 100644
index 0000000000..78ab0b6449
--- /dev/null
+++ b/src/perf/java/io/reactivex/FlattenCrossMapPerf.java
@@ -0,0 +1,72 @@
+/**
+ * Copyright 2016 Netflix, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in
+ * compliance with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is
+ * distributed on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See
+ * the License for the specific language governing permissions and limitations under the License.
+ */
+
+package io.reactivex;
+
+import java.util.*;
+import java.util.concurrent.TimeUnit;
+
+import org.openjdk.jmh.annotations.*;
+import org.openjdk.jmh.infra.Blackhole;
+
+import io.reactivex.functions.Function;
+
+@BenchmarkMode(Mode.Throughput)
+@Warmup(iterations = 5)
+@Measurement(iterations = 5, time = 1, timeUnit = TimeUnit.SECONDS)
+@OutputTimeUnit(TimeUnit.SECONDS)
+@Fork(value = 1)
+@State(Scope.Thread)
+public class FlattenCrossMapPerf {
+    @Param({ "1", "10", "100", "1000", "10000", "100000", "1000000" })
+    public int times;
+
+    Flowable<Integer> flowable;
+
+    Observable<Integer> observable;
+
+    @Setup
+    public void setup() {
+        Integer[] array = new Integer[times];
+        Arrays.fill(array, 777);
+
+        Integer[] arrayInner = new Integer[1000000 / times];
+        Arrays.fill(arrayInner, 888);
+
+        final Iterable<Integer> list = Arrays.asList(arrayInner);
+
+        flowable = Flowable.fromArray(array).flatMapIterable(new Function<Integer, Iterable<Integer>>() {
+            @Override
+            public Iterable<Integer> apply(Integer v) throws Exception {
+                return list;
+            }
+        });
+
+        observable = Observable.fromArray(array).flatMapIterable(new Function<Integer, Iterable<Integer>>() {
+            @Override
+            public Iterable<Integer> apply(Integer v) throws Exception {
+                return list;
+            }
+        });
+    }
+
+    @Benchmark
+    public void flowable(Blackhole bh) {
+        flowable.subscribe(new PerfConsumer(bh));
+    }
+
+    @Benchmark
+    public void observable(Blackhole bh) {
+        observable.subscribe(new PerfConsumer(bh));
+    }
+}
\ No newline at end of file
diff --git a/src/perf/java/io/reactivex/FlattenJustPerf.java b/src/perf/java/io/reactivex/FlattenJustPerf.java
new file mode 100644
index 0000000000..0246c76cd7
--- /dev/null
+++ b/src/perf/java/io/reactivex/FlattenJustPerf.java
@@ -0,0 +1,69 @@
+/**
+ * Copyright 2016 Netflix, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in
+ * compliance with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is
+ * distributed on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See
+ * the License for the specific language governing permissions and limitations under the License.
+ */
+
+package io.reactivex;
+
+import java.util.*;
+import java.util.concurrent.TimeUnit;
+
+import org.openjdk.jmh.annotations.*;
+import org.openjdk.jmh.infra.Blackhole;
+
+import io.reactivex.functions.Function;
+
+@BenchmarkMode(Mode.Throughput)
+@Warmup(iterations = 5)
+@Measurement(iterations = 5, time = 1, timeUnit = TimeUnit.SECONDS)
+@OutputTimeUnit(TimeUnit.SECONDS)
+@Fork(value = 1)
+@State(Scope.Thread)
+public class FlattenJustPerf {
+    @Param({ "1", "10", "100", "1000", "10000", "100000", "1000000" })
+    public int times;
+
+    Flowable<Integer> flowable;
+
+    Observable<Integer> observable;
+
+    @Setup
+    public void setup() {
+        Integer[] array = new Integer[times];
+        Arrays.fill(array, 777);
+
+        final Iterable<Integer> singletonList = Collections.singletonList(1);
+
+        flowable = Flowable.fromArray(array).flatMapIterable(new Function<Integer, Iterable<Integer>>() {
+            @Override
+            public Iterable<Integer> apply(Integer v) throws Exception {
+                return singletonList;
+            }
+        });
+
+        observable = Observable.fromArray(array).flatMapIterable(new Function<Integer, Iterable<Integer>>() {
+            @Override
+            public Iterable<Integer> apply(Integer v) throws Exception {
+                return singletonList;
+            }
+        });
+    }
+
+    @Benchmark
+    public void flowable(Blackhole bh) {
+        flowable.subscribe(new PerfConsumer(bh));
+    }
+
+    @Benchmark
+    public void observable(Blackhole bh) {
+        observable.subscribe(new PerfConsumer(bh));
+    }
+}
\ No newline at end of file
diff --git a/src/perf/java/io/reactivex/PerfConsumer.java b/src/perf/java/io/reactivex/PerfConsumer.java
new file mode 100644
index 0000000000..9feabdfcaf
--- /dev/null
+++ b/src/perf/java/io/reactivex/PerfConsumer.java
@@ -0,0 +1,61 @@
+/**
+ * Copyright 2016 Netflix, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in
+ * compliance with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is
+ * distributed on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See
+ * the License for the specific language governing permissions and limitations under the License.
+ */
+
+package io.reactivex;
+
+import org.openjdk.jmh.infra.Blackhole;
+import org.reactivestreams.*;
+
+import io.reactivex.disposables.Disposable;
+
+/**
+ * A multi-type synchronous consumer.
+ */
+public final class PerfConsumer implements Subscriber<Object>, Observer<Object>,
+SingleObserver<Object>, CompletableObserver, MaybeObserver<Object> {
+
+    final Blackhole bh;
+
+    public PerfConsumer(Blackhole bh) {
+        this.bh = bh;
+    }
+
+    @Override
+    public void onSuccess(Object value) {
+        bh.consume(value);
+    }
+
+    @Override
+    public void onSubscribe(Disposable d) {
+    }
+
+    @Override
+    public void onSubscribe(Subscription s) {
+        s.request(Long.MAX_VALUE);
+    }
+
+    @Override
+    public void onNext(Object t) {
+        bh.consume(t);
+    }
+
+    @Override
+    public void onError(Throwable t) {
+        t.printStackTrace();
+    }
+
+    @Override
+    public void onComplete() {
+        bh.consume(true);
+    }
+}
diff --git a/src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java b/src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterableTest.java
similarity index 96%
rename from src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java
rename to src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterableTest.java
index 3c28d6eef5..f0fcdb2933 100644
--- a/src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterable.java
+++ b/src/test/java/io/reactivex/internal/operators/observable/ObservableFlattenIterableTest.java
@@ -20,7 +20,7 @@
 import io.reactivex.Observable;
 import io.reactivex.functions.Function;
 
-public class ObservableFlattenIterable {
+public class ObservableFlattenIterableTest {
 
     @Test
     public void flatMapIterablePrefetch() {
diff --git a/src/test/java/io/reactivex/internal/operators/observable/ObservableMergeTest.java b/src/test/java/io/reactivex/internal/operators/observable/ObservableMergeTest.java
index 8746222951..2a3d016778 100644
--- a/src/test/java/io/reactivex/internal/operators/observable/ObservableMergeTest.java
+++ b/src/test/java/io/reactivex/internal/operators/observable/ObservableMergeTest.java
@@ -262,7 +262,7 @@ public void onNext(String v) {
         // to make sure after o1.onNextBeingSent and o2.onNextBeingSent are hit that the following
         // onNext is invoked.
 
-        int timeout = 10;
+        int timeout = 20;
 
         while (timeout-- > 0 && concurrentCounter.get() != 1) {
             Thread.sleep(100);