diff --git a/modules/@angular/router/src/create_router_state.ts b/modules/@angular/router/src/create_router_state.ts
new file mode 100644
index 0000000000..10b686139a
--- /dev/null
+++ b/modules/@angular/router/src/create_router_state.ts
@@ -0,0 +1,42 @@
+import { RouterStateCandidate, ActivatedRouteCandidate, RouterState, ActivatedRoute } from './router_state';
+import { TreeNode } from './utils/tree';
+import { BehaviorSubject } from 'rxjs/BehaviorSubject';
+
+export function createRouterState(curr: RouterStateCandidate, prev: RouterStateCandidate, prevState: RouterState): RouterState {
+  const root = createNode(curr._root, prev ? prev._root : null, prevState ? prevState._root : null);
+  const queryParams = prevState ? prevState.queryParams : new BehaviorSubject(curr.queryParams);
+  const fragment = prevState ? prevState.fragment : new BehaviorSubject(curr.fragment);
+  return new RouterState(root, queryParams, fragment);
+}
+
+function createNode(curr:TreeNode<ActivatedRouteCandidate>, prev?:TreeNode<ActivatedRouteCandidate>, prevState?:TreeNode<ActivatedRoute>):TreeNode<ActivatedRoute> {
+  if (prev && equalRouteCandidates(prev.value, curr.value)) {
+    const value = prevState.value;
+    const children = createOrReuseChildren(curr, prev, prevState);
+    return new TreeNode<ActivatedRoute>(value, children);
+
+  } else {
+    const value = createActivatedRoute(curr.value);
+    const children = curr.children.map(c => createNode(c));
+    return new TreeNode<ActivatedRoute>(value, children);
+  }
+}
+
+function createOrReuseChildren(curr:TreeNode<ActivatedRouteCandidate>, prev:TreeNode<ActivatedRouteCandidate>, prevState:TreeNode<ActivatedRoute>) {
+  return curr.children.map(child => {
+    const index = prev.children.findIndex(p => equalRouteCandidates(p.value, child.value));
+    if (index >= 0) {
+      return createNode(child, prev.children[index], prevState.children[index]);
+    } else {
+      return createNode(child);
+    }
+  });
+}
+
+function createActivatedRoute(c:ActivatedRouteCandidate) {
+  return new ActivatedRoute(new BehaviorSubject(c.urlSegments), new BehaviorSubject(c.params), c.outlet, c.component);
+}
+
+function equalRouteCandidates(a: ActivatedRouteCandidate, b: ActivatedRouteCandidate): boolean {
+  return a._routeConfig === b._routeConfig;
+}
\ No newline at end of file
diff --git a/modules/@angular/router/test/create_router_state.spec.ts b/modules/@angular/router/test/create_router_state.spec.ts
new file mode 100644
index 0000000000..556b7877e8
--- /dev/null
+++ b/modules/@angular/router/test/create_router_state.spec.ts
@@ -0,0 +1,72 @@
+import {DefaultUrlSerializer} from '../src/url_serializer';
+import {UrlTree} from '../src/url_tree';
+import {Params, PRIMARY_OUTLET} from '../src/shared';
+import {ActivatedRoute, ActivatedRouteCandidate, RouterStateCandidate, createEmptyStateCandidate, createEmptyState} from '../src/router_state';
+import {createRouterState} from '../src/create_router_state';
+import {recognize} from '../src/recognize';
+import {RouterConfig} from '../src/config';
+
+describe('create router state', () => {
+  const emptyCandidate = () => createEmptyStateCandidate(RootComponent);
+  const emptyState = () => createEmptyState(RootComponent);
+
+  it('should work create new state', () => {
+    const state = createRouterState(createState([
+      {path: 'a', component: ComponentA},
+      {path: 'b', component: ComponentB, outlet: 'left'},
+      {path: 'c', component: ComponentC, outlet: 'right'}
+    ], "a(left:b//right:c)"), emptyCandidate(), emptyState());
+
+    checkActivatedRoute(state.root, RootComponent);
+
+    const c = state.children(state.root);
+    checkActivatedRoute(c[0], ComponentA);
+    checkActivatedRoute(c[1], ComponentB, 'left');
+    checkActivatedRoute(c[2], ComponentC, 'right');
+  });
+
+  it('should reuse existing nodes when it can', () => {
+    const config = [
+      {path: 'a', component: ComponentA},
+      {path: 'b', component: ComponentB, outlet: 'left'},
+      {path: 'c', component: ComponentC, outlet: 'left'}
+    ];
+
+    const prevCandidate = createState(config, "a(left:b)");
+    const prevState = createRouterState(prevCandidate, emptyCandidate(), emptyState());
+
+    const state = createRouterState(createState(config, "a(left:c)"), prevCandidate, prevState);
+
+    expect(prevState.root).toBe(state.root);
+    const prevC = prevState.children(prevState.root);
+    const currC = state.children(state.root);
+
+    expect(prevC[0]).toBe(currC[0]);
+    expect(prevC[1]).not.toBe(currC[1]);
+    checkActivatedRoute(currC[1], ComponentC, 'left');
+  });
+});
+
+function createState(config: RouterConfig, url: string): RouterStateCandidate {
+  let res;
+  recognize(RootComponent, config, tree(url)).forEach(s => res = s);
+  return res;
+}
+
+function checkActivatedRoute(actual: ActivatedRoute | null, cmp: Function, outlet: string = PRIMARY_OUTLET):void {
+  if (actual === null) {
+    expect(actual).toBeDefined();
+  } else {
+    expect(actual.component).toBe(cmp);
+    expect(actual.outlet).toEqual(outlet);
+  }
+}
+
+function tree(url: string): UrlTree {
+  return new DefaultUrlSerializer().parse(url);
+}
+
+class RootComponent {}
+class ComponentA {}
+class ComponentB {}
+class ComponentC {}