diff --git a/src/ng/compile.js b/src/ng/compile.js
index 77a13ab22a09..95526801bb2f 100644
--- a/src/ng/compile.js
+++ b/src/ng/compile.js
@@ -769,7 +769,7 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
        * @param {function(interpolatedValue)} fn Function that will be called whenever
                 the interpolated value of the attribute changes.
        *        See the {@link guide/directive#Attributes Directives} guide for more info.
-       * @returns {function()} the `fn` parameter.
+       * @returns {function()} Returns a deregistration function for this observer.
        */
       $observe: function(key, fn) {
         var attrs = this,
@@ -783,7 +783,10 @@ function $CompileProvider($provide, $$sanitizeUriProvider) {
             fn(attrs[key]);
           }
         });
-        return fn;
+
+        return function() {
+          arrayRemove(listeners, fn);
+        };
       }
     };
 
diff --git a/test/ng/compileSpec.js b/test/ng/compileSpec.js
index c37461fcc007..44b14e1e6d86 100755
--- a/test/ng/compileSpec.js
+++ b/test/ng/compileSpec.js
@@ -1749,15 +1749,14 @@ describe('$compile', function() {
 
 
   describe('interpolation', function() {
-    var observeSpy, directiveAttrs;
+    var observeSpy, directiveAttrs, deregisterObserver;
 
     beforeEach(module(function() {
       directive('observer', function() {
         return function(scope, elm, attr) {
           directiveAttrs = attr;
           observeSpy = jasmine.createSpy('$observe attr');
-
-          expect(attr.$observe('someAttr', observeSpy)).toBe(observeSpy);
+          deregisterObserver = attr.$observe('someAttr', observeSpy);
         };
       });
       directive('replaceSomeAttr', valueFn({
@@ -1855,6 +1854,18 @@ describe('$compile', function() {
     }));
 
 
+    it('should return a deregistration function while observing an attribute', inject(function($rootScope, $compile) {
+      $compile('<div some-attr="{{value}}" observer></div>')($rootScope);
+      
+      $rootScope.$apply('value = "first-value"');
+      expect(observeSpy).toHaveBeenCalledWith('first-value');
+
+      deregisterObserver();
+      $rootScope.$apply('value = "new-value"');
+      expect(observeSpy).not.toHaveBeenCalledWith('new-value');
+    }));
+
+
     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);