diff --git a/modules/angular2/src/mock/location_mock.js b/modules/angular2/src/mock/location_mock.js
index 3425b42d88..95953b96df 100644
--- a/modules/angular2/src/mock/location_mock.js
+++ b/modules/angular2/src/mock/location_mock.js
@@ -45,7 +45,8 @@ export class SpyLocation extends SpyObject {
   }
 
   go(url:string) {
-    if (this._path === url) {
+    url = this.normalizeAbsolutely(url);
+    if (this._path == url) {
       return;
     }
     this._path = url;
diff --git a/modules/angular2/src/router/router_link.js b/modules/angular2/src/router/router_link.js
index c4ec644abc..412c7725e6 100644
--- a/modules/angular2/src/router/router_link.js
+++ b/modules/angular2/src/router/router_link.js
@@ -43,7 +43,10 @@ export class RouterLink {
   _params:StringMap<string, string>;
   _router:Router;
   _location:Location;
-  _href:string;
+  // the url displayed on the anchor element.
+  _visibleHref: string;
+  // the url passed to the router navigation.
+  _navigationHref: string;
 
   constructor(elementRef:ElementRef, router:Router, location:Location) {
     this._domEl = elementRef.domElement;
@@ -52,7 +55,7 @@ export class RouterLink {
     this._params = StringMapWrapper.create();
     DOM.on(this._domEl, 'click', (evt) => {
       evt.preventDefault();
-      this._router.navigate(this._href);
+      this._router.navigate(this._navigationHref);
     });
   }
 
@@ -66,11 +69,11 @@ export class RouterLink {
 
   onAllChangesDone(): void {
     if (isPresent(this._route) && isPresent(this._params)) {
-      var newHref = this._router.generate(this._route, this._params);
-      this._href = this._location.normalizeAbsolutely(newHref);
+      this._navigationHref = this._router.generate(this._route, this._params);
+      this._visibleHref = this._location.normalizeAbsolutely(this._navigationHref);
       // Keeping the link on the element to support contextual menu `copy link`
       // and other in-browser affordances.
-      DOM.setAttribute(this._domEl, 'href', this._href);
+      DOM.setAttribute(this._domEl, 'href', this._visibleHref);
     }
   }
 }
diff --git a/modules/angular2/test/router/outlet_spec.js b/modules/angular2/test/router/outlet_spec.js
index e03b64c47d..42bdc68d7c 100644
--- a/modules/angular2/test/router/outlet_spec.js
+++ b/modules/angular2/test/router/outlet_spec.js
@@ -135,6 +135,9 @@ export function main() {
         });
     }));
 
+    function getHref(view) {
+      return DOM.getAttribute(view.rootNodes[0].childNodes[0], 'href');
+    }
 
     it('should generate absolute hrefs that include the base href', inject([AsyncTestCompleter], (async) => {
       location.setBaseHref('/my/base');
@@ -143,7 +146,7 @@ export function main() {
         .then((_) => rtr.navigate('/a/b'))
         .then((_) => {
           view.detectChanges();
-          expect(DOM.getAttribute(view.rootNodes[0].childNodes[0], 'href')).toEqual('/my/base/user');
+          expect(getHref(view)).toEqual('/my/base/user');
           async.done();
         });
     }));
@@ -155,13 +158,13 @@ export function main() {
         .then((_) => rtr.navigate('/a/b'))
         .then((_) => {
           view.detectChanges();
-          expect(DOM.getAttribute(view.rootNodes[0].childNodes[0], 'href')).toEqual('/user');
+          expect(getHref(view)).toEqual('/user');
           async.done();
         });
     }));
 
 
-    it('should reuse common parent components', inject([AsyncTestCompleter, Location], (async, location) => {
+    it('should reuse common parent components', inject([AsyncTestCompleter], (async) => {
       compile()
         .then((_) => rtr.config({'path': '/team/:id', 'component': TeamCmp }))
         .then((_) => rtr.navigate('/team/angular/user/rado'))
@@ -193,27 +196,64 @@ export function main() {
         });
     }));
 
+    describe('when clicked', () => {
 
-    it('should generate link hrefs without params', inject([AsyncTestCompleter], (async) => {
-      compile('<a href="hello" router-link="user"></a>')
-        .then((_) => rtr.config({'path': '/user', 'component': UserCmp, 'as': 'user'}))
-        .then((_) => rtr.navigate('/a/b'))
-        .then((_) => {
-          view.detectChanges();
-          var anchorEl = view.rootNodes[0].childNodes[0];
-          expect(DOM.getAttribute(anchorEl, 'href')).toEqual('/user');
+      var clickOnElement = function(view) {
+        var anchorEl = view.rootNodes[0].childNodes[0];
+        var dispatchedEvent = DOM.createMouseEvent('click');
+        DOM.dispatchEvent(anchorEl, dispatchedEvent);
+        return dispatchedEvent;
+      };
 
-          var dispatchedEvent = DOM.createMouseEvent('click');
-          DOM.dispatchEvent(anchorEl, dispatchedEvent);
-          expect(dispatchedEvent.defaultPrevented).toBe(true);
+      it('test', inject([AsyncTestCompleter], (async) => {
+        async.done();
+      }));
 
-          // router navigation is async.
-          rtr.subscribe((_) => {
-            expect(location.urlChanges).toEqual(['/user']);
-            async.done();
+      it('should navigate to link hrefs without params', inject([AsyncTestCompleter], (async) => {
+        compile('<a href="hello" router-link="user"></a>')
+          .then((_) => rtr.config({
+            'path': '/user',
+            'component': UserCmp,
+            'as': 'user'
+          }))
+          .then((_) => rtr.navigate('/a/b'))
+          .then((_) => {
+            view.detectChanges();
+
+            var dispatchedEvent = clickOnElement(view);
+            expect(dispatchedEvent.defaultPrevented).toBe(true);
+
+            // router navigation is async.
+            rtr.subscribe((_) => {
+              expect(location.urlChanges).toEqual(['/user']);
+              async.done();
+            });
           });
-        });
-    }));
+      }));
+
+      it('should navigate to link hrefs in presence of base href', inject([AsyncTestCompleter], (async) => {
+        location.setBaseHref('/base');
+        compile('<a href="hello" router-link="user"></a>')
+          .then((_) => rtr.config({
+            'path': '/user',
+            'component': UserCmp,
+            'as': 'user'
+          }))
+          .then((_) => rtr.navigate('/a/b'))
+          .then((_) => {
+            view.detectChanges();
+
+            var dispatchedEvent = clickOnElement(view);
+            expect(dispatchedEvent.defaultPrevented).toBe(true);
+
+            // router navigation is async.
+            rtr.subscribe((_) => {
+              expect(location.urlChanges).toEqual(['/base/user']);
+              async.done();
+            });
+          });
+      }));
+    });
   });
 }