diff --git a/modules/change_detection/src/parser/ast.js b/modules/change_detection/src/parser/ast.js
index e98b4141b6..fe39d133f6 100644
--- a/modules/change_detection/src/parser/ast.js
+++ b/modules/change_detection/src/parser/ast.js
@@ -111,7 +111,7 @@ export class KeyedAccess extends AST {
     this.obj = obj;
     this.key = key;
   }
-  
+
   eval(context) {
     var obj = this.obj.eval(context);
     var key = this.key.eval(context);
@@ -169,11 +169,11 @@ export class LiteralPrimitive extends AST {
   constructor(value) {
     this.value = value;
   }
-  
+
   eval(context) {
     return this.value;
   }
-  
+
   visit(visitor, args) {
     visitor.visitLiteralPrimitive(this, args);
   }
@@ -184,11 +184,11 @@ export class LiteralArray extends AST {
   constructor(expressions:List) {
     this.expressions = expressions;
   }
-  
+
   eval(context) {
     return ListWrapper.map(this.expressions, (e) => e.eval(context));
   }
-  
+
   visit(visitor, args) {
     visitor.visitLiteralArray(this, args);
   }
@@ -287,7 +287,7 @@ export class Assignment extends AST {
   eval(context) {
     return this.target.assign(context, this.value.eval(context));
   }
-  
+
   visit(visitor, args) {
     visitor.visitAssignment(this, args);
   }
@@ -336,6 +336,22 @@ export class FunctionCall extends AST {
   }
 }
 
+export class ASTWithSource {
+  constructor(ast:AST, source:string) {
+    this.source = source;
+    this.ast = ast;
+  }
+}
+
+export class TemplateBinding {
+  constructor(key:string, name:string, expression:ASTWithSource) {
+    this.key = key;
+    // only either name or expression will be filled.
+    this.name = name;
+    this.expression = expression;
+  }
+}
+
 //INTERFACE
 export class AstVisitor {
   visitChain(ast:Chain, args){}
diff --git a/modules/change_detection/src/parser/lexer.js b/modules/change_detection/src/parser/lexer.js
index c76310b083..a4763627b9 100644
--- a/modules/change_detection/src/parser/lexer.js
+++ b/modules/change_detection/src/parser/lexer.js
@@ -130,6 +130,7 @@ export const $CR        = 13;
 export const $SPACE     = 32;
 export const $BANG      = 33;
 export const $DQ        = 34;
+export const $HASH      = 35;
 export const $$         = 36;
 export const $PERCENT   = 37;
 export const $AMPERSAND = 38;
@@ -246,6 +247,8 @@ class _Scanner {
       case $SQ:
       case $DQ:
         return this.scanString();
+      case $HASH:
+        return this.scanOperator(start, StringWrapper.fromCharCode(peek));
       case $PLUS:
       case $MINUS:
       case $STAR:
@@ -459,7 +462,8 @@ var OPERATORS = SetWrapper.createFromList([
   '&',
   '|',
   '!',
-  '?'
+  '?',
+  '#'
 ]);
 
 
diff --git a/modules/change_detection/src/parser/parser.js b/modules/change_detection/src/parser/parser.js
index 776b87c8ed..6e4c1634cd 100644
--- a/modules/change_detection/src/parser/parser.js
+++ b/modules/change_detection/src/parser/parser.js
@@ -19,7 +19,10 @@ import {
   LiteralArray,
   LiteralMap,
   MethodCall,
-  FunctionCall
+  FunctionCall,
+  TemplateBindings,
+  TemplateBinding,
+  ASTWithSource
   } from './ast';
 
 var _implicitReceiver = new ImplicitReceiver();
@@ -32,14 +35,21 @@ export class Parser {
     this._closureMap = closureMap;
   }
 
-  parseAction(input:string):AST {
+  parseAction(input:string):ASTWithSource {
     var tokens = this._lexer.tokenize(input);
-    return new _ParseAST(input, tokens, this._closureMap, true).parseChain();
+    var ast = new _ParseAST(input, tokens, this._closureMap, true).parseChain();
+    return new ASTWithSource(ast, input);
   }
 
-  parseBinding(input:string):AST {
+  parseBinding(input:string):ASTWithSource {
     var tokens = this._lexer.tokenize(input);
-    return new _ParseAST(input, tokens, this._closureMap, false).parseChain();
+    var ast = new _ParseAST(input, tokens, this._closureMap, false).parseChain();
+    return new ASTWithSource(ast, input);
+  }
+
+  parseTemplateBindings(input:string):List<TemplateBinding> {
+    var tokens = this._lexer.tokenize(input);
+    return new _ParseAST(input, tokens, this._closureMap, false).parseTemplateBindings();
   }
 }
 
@@ -407,6 +417,29 @@ class _ParseAST {
     return positionals;
   }
 
+  parseTemplateBindings() {
+    var bindings = [];
+    while (this.index < this.tokens.length) {
+      var key = this.expectIdentifierOrKeywordOrString();
+      this.optionalCharacter($COLON);
+      var name = null;
+      var expression = null;
+      if (this.optionalOperator("#")) {
+        name = this.expectIdentifierOrKeyword();
+      } else {
+        var start = this.inputIndex;
+        var ast = this.parseExpression();
+        var source = this.input.substring(start, this.inputIndex);
+        expression = new ASTWithSource(ast, source);
+      }
+      ListWrapper.push(bindings, new TemplateBinding(key, name, expression));
+      if (!this.optionalCharacter($SEMICOLON)) {
+        this.optionalCharacter($COMMA);
+      };
+    }
+    return bindings;
+  }
+
   error(message:string, index:int = null) {
     if (isBlank(index)) index = this.index;
 
diff --git a/modules/change_detection/src/watch_group.js b/modules/change_detection/src/watch_group.js
index bf8c5f696e..b8832da19e 100644
--- a/modules/change_detection/src/watch_group.js
+++ b/modules/change_detection/src/watch_group.js
@@ -310,6 +310,8 @@ class ProtoRecordCreator {
 
   visitAssignment(ast:Assignment, dest) {this.unsupported();}
 
+  visitTemplateBindings(ast, dest) {this.unsupported();}
+
   createRecordsFromAST(ast:AST, memento){
     ast.visit(this, memento);
   }
diff --git a/modules/change_detection/test/change_detector_spec.js b/modules/change_detection/test/change_detector_spec.js
index 656406df0b..8cadb72257 100644
--- a/modules/change_detection/test/change_detector_spec.js
+++ b/modules/change_detection/test/change_detector_spec.js
@@ -18,7 +18,7 @@ import {Record} from 'change_detection/record';
 export function main() {
   function ast(exp:string) {
     var parser = new Parser(new Lexer(), new ClosureMap());
-    return parser.parseBinding(exp);
+    return parser.parseBinding(exp).ast;
   }
 
   function createChangeDetector(memo:string, exp:string, context = null, formatters = null) {
diff --git a/modules/change_detection/test/parser/lexer_spec.js b/modules/change_detection/test/parser/lexer_spec.js
index e4b5c9ef5d..025977df24 100644
--- a/modules/change_detection/test/parser/lexer_spec.js
+++ b/modules/change_detection/test/parser/lexer_spec.js
@@ -237,6 +237,11 @@ export function main() {
         }).toThrowError("Lexer Error: Invalid unicode escape [\\u1''b] at column 2 in expression ['\\u1''bla']");
       });
 
+      it('should tokenize hash as operator', function() {
+        var tokens:List<Token> = lex("#");
+        expectOperatorToken(tokens[0], 0, '#');
+      });
+
     });
   });
 }
diff --git a/modules/change_detection/test/parser/parser_spec.js b/modules/change_detection/test/parser/parser_spec.js
index b1e7102371..d5b9f6a2e2 100644
--- a/modules/change_detection/test/parser/parser_spec.js
+++ b/modules/change_detection/test/parser/parser_spec.js
@@ -1,6 +1,6 @@
 import {ddescribe, describe, it, xit, iit, expect, beforeEach} from 'test_lib/test_lib';
-import {BaseException, isBlank} from 'facade/lang';
-import {MapWrapper} from 'facade/collection';
+import {BaseException, isBlank, isPresent} from 'facade/lang';
+import {MapWrapper, ListWrapper} from 'facade/collection';
 import {Parser} from 'change_detection/parser/parser';
 import {Lexer} from 'change_detection/parser/lexer';
 import {Formatter, LiteralPrimitive} from 'change_detection/parser/ast';
@@ -32,11 +32,15 @@ export function main() {
   }
 
   function parseAction(text) {
-    return createParser().parseAction(text);
+    return createParser().parseAction(text).ast;
   }
 
   function parseBinding(text) {
-    return createParser().parseBinding(text);
+    return createParser().parseBinding(text).ast;
+  }
+
+  function parseTemplateBindings(text) {
+    return createParser().parseTemplateBindings(text);
   }
 
   function expectEval(text, passedInContext = null) {
@@ -48,6 +52,15 @@ export function main() {
     return expect(() => parseAction(text).eval(td()));
   }
 
+  function evalAsts(asts, passedInContext = null) {
+    var c = isBlank(passedInContext) ? td() : passedInContext;
+    var res = [];
+    for (var i=0; i<asts.length; i++) {
+      ListWrapper.push(res, asts[i].eval(c));
+    }
+    return res;
+  }
+
   describe("parser", () => {
     describe("parseAction", () => {
       describe("basic expressions", () => {
@@ -248,7 +261,7 @@ export function main() {
           expectEval('a["key"] = 200', context).toEqual(200);
           expect(MapWrapper.get(context.a, "key")).toEqual(200);
         });
-        
+
         it("should support array/map updates", () => {
           var context = td([MapWrapper.createFromPairs([["key", 100]])]);
           expectEval('a[0]["key"] = 200', context).toEqual(200);
@@ -287,7 +300,7 @@ export function main() {
 
       it('should pass exceptions', () => {
         expect(() => {
-          createParser().parseAction('a()').eval(td(() => {throw new BaseException("boo to you")}));
+          createParser().parseAction('a()').ast.eval(td(() => {throw new BaseException("boo to you")}));
         }).toThrowError('boo to you');
       });
 
@@ -297,6 +310,10 @@ export function main() {
           expectEval("1;;").toEqual(1);
         });
       });
+
+      it('should store the source in the result', () => {
+        expect(createParser().parseAction('someExpr').source).toBe('someExpr');
+      });
     });
 
     describe("parseBinding", () => {
@@ -319,6 +336,11 @@ export function main() {
           expect(() => parseBinding('"Foo"|1234')).toThrowError(new RegExp('identifier or keyword'));
           expect(() => parseBinding('"Foo"|"uppercase"')).toThrowError(new RegExp('identifier or keyword'));
         });
+
+      });
+
+      it('should store the source in the result', () => {
+        expect(createParser().parseBinding('someExpr').source).toBe('someExpr');
       });
 
       it('should throw on chain expressions', () => {
@@ -329,6 +351,90 @@ export function main() {
         expect(() => parseBinding("1;2")).toThrowError(new RegExp("contain chained expression"));
       });
     });
+
+    describe('parseTemplateBindings', () => {
+
+      function keys(templateBindings) {
+        return ListWrapper.map(templateBindings, (binding) => binding.key );
+      }
+
+      function names(templateBindings) {
+        return ListWrapper.map(templateBindings, (binding) => binding.name );
+      }
+
+      function exprSources(templateBindings) {
+        return ListWrapper.map(templateBindings,
+          (binding) => isPresent(binding.expression) ? binding.expression.source : null );
+      }
+
+      function exprAsts(templateBindings) {
+        return ListWrapper.map(templateBindings,
+          (binding) => isPresent(binding.expression) ? binding.expression.ast : null );
+      }
+
+      it('should parse an empty string', () => {
+        var bindings = parseTemplateBindings("");
+        expect(bindings).toEqual([]);
+      });
+
+      it('should only allow identifier, string, or keyword as keys', () => {
+        var bindings = parseTemplateBindings("a:'b'");
+        expect(keys(bindings)).toEqual(['a']);
+
+        bindings = parseTemplateBindings("'a':'b'");
+        expect(keys(bindings)).toEqual(['a']);
+
+        bindings = parseTemplateBindings("\"a\":'b'");
+        expect(keys(bindings)).toEqual(['a']);
+
+        expect( () => {
+          parseTemplateBindings('(:0');
+        }).toThrowError(new RegExp('expected identifier, keyword, or string'));
+
+        expect( () => {
+          parseTemplateBindings('1234:0');
+        }).toThrowError(new RegExp('expected identifier, keyword, or string'));
+      });
+
+      it('should detect expressions as value', () => {
+        var bindings = parseTemplateBindings("a:b");
+        expect(exprSources(bindings)).toEqual(['b']);
+        expect(evalAsts(exprAsts(bindings), td(0, 23))).toEqual([23]);
+
+        bindings = parseTemplateBindings("a:1+1");
+        expect(exprSources(bindings)).toEqual(['1+1']);
+        expect(evalAsts(exprAsts(bindings))).toEqual([2]);
+      });
+
+      it('should detect names as value', () => {
+        var bindings = parseTemplateBindings("a:#b");
+        expect(names(bindings)).toEqual(['b']);
+        expect(exprSources(bindings)).toEqual([null]);
+        expect(exprAsts(bindings)).toEqual([null]);
+      });
+
+      it('should allow space and colon as separators', () => {
+        var bindings = parseTemplateBindings("a:b");
+        expect(keys(bindings)).toEqual(['a']);
+        expect(exprSources(bindings)).toEqual(['b']);
+
+        bindings = parseTemplateBindings("a b");
+        expect(keys(bindings)).toEqual(['a']);
+        expect(exprSources(bindings)).toEqual(['b']);
+      });
+
+      it('should allow multiple pairs', () => {
+        var bindings = parseTemplateBindings("a 1 b 2");
+        expect(keys(bindings)).toEqual(['a', 'b']);
+        expect(exprSources(bindings)).toEqual(['1 ', '2']);
+      });
+
+      it('should store the sources in the result', () => {
+        var bindings = parseTemplateBindings("a 1,b 2");
+        expect(bindings[0].expression.source).toEqual('1');
+        expect(bindings[1].expression.source).toEqual('2');
+      });
+    });
   });
 }
 
diff --git a/modules/core/src/compiler/pipeline/compile_element.js b/modules/core/src/compiler/pipeline/compile_element.js
index 4602624f6e..30fa4d971f 100644
--- a/modules/core/src/compiler/pipeline/compile_element.js
+++ b/modules/core/src/compiler/pipeline/compile_element.js
@@ -6,6 +6,8 @@ import {Decorator} from '../../annotations/decorator';
 import {Component} from '../../annotations/component';
 import {Template} from '../../annotations/template';
 
+import {ASTWithSource} from 'change_detection/parser/ast';
+
 /**
  * Collects all data that is needed to process an element
  * in the compile process. Fields are filled
@@ -18,6 +20,7 @@ export class CompileElement {
     this._classList = null;
     this.textNodeBindings = null;
     this.propertyBindings = null;
+    this.variableBindings = null;
     this.decoratorDirectives = null;
     this.templateDirective = null;
     this.componentDirective = null;
@@ -60,20 +63,27 @@ export class CompileElement {
     return this._classList;
   }
 
-  addTextNodeBinding(indexInParent:int, expression:string) {
+  addTextNodeBinding(indexInParent:int, expression:ASTWithSource) {
     if (isBlank(this.textNodeBindings)) {
       this.textNodeBindings = MapWrapper.create();
     }
     MapWrapper.set(this.textNodeBindings, indexInParent, expression);
   }
 
-  addPropertyBinding(property:string, expression:string) {
+  addPropertyBinding(property:string, expression:ASTWithSource) {
     if (isBlank(this.propertyBindings)) {
       this.propertyBindings = MapWrapper.create();
     }
     MapWrapper.set(this.propertyBindings, property, expression);
   }
 
+  addVariableBinding(contextName:string, templateName:string) {
+    if (isBlank(this.variableBindings)) {
+      this.variableBindings = MapWrapper.create();
+    }
+    MapWrapper.set(this.variableBindings, contextName, templateName);
+  }
+
   addDirective(directive:AnnotatedType) {
     var annotation = directive.annotation;
     if (annotation instanceof Decorator) {
diff --git a/modules/core/src/compiler/pipeline/default_steps.js b/modules/core/src/compiler/pipeline/default_steps.js
index 2b41949ec3..66f9f216bb 100644
--- a/modules/core/src/compiler/pipeline/default_steps.js
+++ b/modules/core/src/compiler/pipeline/default_steps.js
@@ -21,13 +21,13 @@ export function createDefaultSteps(
     directives: List<AnnotatedType>
   ) {
   return [
-    new PropertyBindingParser(),
-    new TextInterpolationParser(),
+    new ViewSplitter(parser),
+    new TextInterpolationParser(parser),
+    new PropertyBindingParser(parser),
     new DirectiveParser(directives),
-    new ViewSplitter(),
     new ElementBindingMarker(),
     new ProtoViewBuilder(),
     new ProtoElementInjectorBuilder(),
-    new ElementBinderBuilder(parser, closureMap)
+    new ElementBinderBuilder(closureMap)
   ];
 }
\ No newline at end of file
diff --git a/modules/core/src/compiler/pipeline/directive_parser.js b/modules/core/src/compiler/pipeline/directive_parser.js
index 75cb2efd3d..713b7a80eb 100644
--- a/modules/core/src/compiler/pipeline/directive_parser.js
+++ b/modules/core/src/compiler/pipeline/directive_parser.js
@@ -1,5 +1,6 @@
 import {isPresent, BaseException} from 'facade/lang';
 import {List, MapWrapper} from 'facade/collection';
+import {TemplateElement} from 'facade/dom';
 import {SelectorMatcher} from '../selector';
 import {CssSelector} from '../selector';
 
@@ -12,7 +13,8 @@ import {CompileControl} from './compile_control';
 import {Reflector} from '../reflector';
 
 /**
- * Parses the directives on a single element.
+ * Parses the directives on a single element. Assumes ViewSplitter has already created
+ * <template> elements for template directives.
  *
  * Fills:
  * - CompileElement#decoratorDirectives
@@ -22,6 +24,8 @@ import {Reflector} from '../reflector';
  * Reads:
  * - CompileElement#propertyBindings (to find directives contained
  *   in the property bindings)
+ * - CompileElement#variableBindings (to find directives contained
+ *   in the property bindings)
  */
 export class DirectiveParser extends CompileStep {
   constructor(directives:List<AnnotatedType>) {
@@ -47,17 +51,29 @@ export class DirectiveParser extends CompileStep {
     MapWrapper.forEach(attrs, (attrValue, attrName) => {
       cssSelector.addAttribute(attrName, attrValue);
     });
-    // Allow to find directives even though the attribute is bound
     if (isPresent(current.propertyBindings)) {
-      MapWrapper.forEach(current.propertyBindings, (expression, boundProp) => {
-        cssSelector.addAttribute(boundProp, expression);
+      MapWrapper.forEach(current.propertyBindings, (expression, prop) => {
+        cssSelector.addAttribute(prop, expression.source);
       });
     }
+    if (isPresent(current.variableBindings)) {
+      MapWrapper.forEach(current.variableBindings, (value, name) => {
+        cssSelector.addAttribute(name, value);
+      });
+    }
+    // Note: We assume that the ViewSplitter already did its work, i.e. template directive should
+    // only be present on <template> elements any more!
+    var isTemplateElement = current.element instanceof TemplateElement;
     this._selectorMatcher.match(cssSelector, (directive) => {
-      if (isPresent(current.templateDirective) && (directive.annotation instanceof Template)) {
-        throw new BaseException('Only one template directive per element is allowed!');
-      }
-      if (isPresent(current.componentDirective) && (directive.annotation instanceof Component)) {
+      if (directive.annotation instanceof Template) {
+        if (!isTemplateElement) {
+          throw new BaseException('Template directives need to be placed on <template> elements or elements with template attribute!');
+        } else if (isPresent(current.templateDirective)) {
+          throw new BaseException('Only one template directive per element is allowed!');
+        }
+      } else if (isTemplateElement) {
+        throw new BaseException('Only template directives are allowed on <template> elements!');
+      } else if ((directive.annotation instanceof Component) && isPresent(current.componentDirective)) {
         throw new BaseException('Only one component directive per element is allowed!');
       }
       current.addDirective(directive);
diff --git a/modules/core/src/compiler/pipeline/element_binder_builder.js b/modules/core/src/compiler/pipeline/element_binder_builder.js
index 3d1d4f391a..10d8b1786c 100644
--- a/modules/core/src/compiler/pipeline/element_binder_builder.js
+++ b/modules/core/src/compiler/pipeline/element_binder_builder.js
@@ -43,8 +43,7 @@ import {CompileControl} from './compile_control';
  * with the flag `isViewRoot`.
  */
 export class ElementBinderBuilder extends CompileStep {
-  constructor(parser:Parser, closureMap:ClosureMap) {
-    this._parser = parser;
+  constructor(closureMap:ClosureMap) {
     this._closureMap = closureMap;
   }
 
@@ -56,10 +55,10 @@ export class ElementBinderBuilder extends CompileStep {
         current.componentDirective, current.templateDirective);
 
       if (isPresent(current.textNodeBindings)) {
-        this._bindTextNodes(protoView, current.textNodeBindings);
+        this._bindTextNodes(protoView, current);
       }
       if (isPresent(current.propertyBindings)) {
-        this._bindElementProperties(protoView, current.propertyBindings);
+        this._bindElementProperties(protoView, current);
       }
       this._bindDirectiveProperties(this._collectDirectives(current), current);
     } else if (isPresent(parent)) {
@@ -68,36 +67,36 @@ export class ElementBinderBuilder extends CompileStep {
     current.inheritedElementBinder = elementBinder;
   }
 
-  _bindTextNodes(protoView, textNodeBindings) {
-    MapWrapper.forEach(textNodeBindings, (expression, indexInParent) => {
-      protoView.bindTextNode(indexInParent, this._parser.parseBinding(expression));
+  _bindTextNodes(protoView, compileElement) {
+    MapWrapper.forEach(compileElement.textNodeBindings, (expression, indexInParent) => {
+      protoView.bindTextNode(indexInParent, expression.ast);
     });
   }
 
-  _bindElementProperties(protoView, propertyBindings) {
-    MapWrapper.forEach(propertyBindings, (expression, property) => {
-      protoView.bindElementProperty(property, this._parser.parseBinding(expression));
+  _bindElementProperties(protoView, compileElement) {
+    MapWrapper.forEach(compileElement.propertyBindings, (expression, property) => {
+      protoView.bindElementProperty(property,  expression.ast);
     });
   }
 
-  _collectDirectives(pipelineElement) {
+  _collectDirectives(compileElement) {
     var directives;
-    if (isPresent(pipelineElement.decoratorDirectives)) {
-      directives = ListWrapper.clone(pipelineElement.decoratorDirectives);
+    if (isPresent(compileElement.decoratorDirectives)) {
+      directives = ListWrapper.clone(compileElement.decoratorDirectives);
     } else {
       directives = [];
     }
-    if (isPresent(pipelineElement.templateDirective)) {
-      ListWrapper.push(directives, pipelineElement.templateDirective);
+    if (isPresent(compileElement.templateDirective)) {
+      ListWrapper.push(directives, compileElement.templateDirective);
     }
-    if (isPresent(pipelineElement.componentDirective)) {
-      ListWrapper.push(directives, pipelineElement.componentDirective);
+    if (isPresent(compileElement.componentDirective)) {
+      ListWrapper.push(directives, compileElement.componentDirective);
     }
     return directives;
   }
 
-  _bindDirectiveProperties(typesWithAnnotations, pipelineElement) {
-    var protoView = pipelineElement.inheritedProtoView;
+  _bindDirectiveProperties(typesWithAnnotations, compileElement) {
+    var protoView = compileElement.inheritedProtoView;
     var directiveIndex = 0;
     ListWrapper.forEach(typesWithAnnotations, (typeWithAnnotation) => {
       var annotation = typeWithAnnotation.annotation;
@@ -105,8 +104,8 @@ export class ElementBinderBuilder extends CompileStep {
         return;
       }
       StringMapWrapper.forEach(annotation.bind, (dirProp, elProp) => {
-        var expression = isPresent(pipelineElement.propertyBindings) ?
-          MapWrapper.get(pipelineElement.propertyBindings, elProp) :
+        var expression = isPresent(compileElement.propertyBindings) ?
+          MapWrapper.get(compileElement.propertyBindings, elProp) :
             null;
         if (isBlank(expression)) {
           throw new BaseException('No element binding found for property '+elProp
@@ -114,7 +113,7 @@ export class ElementBinderBuilder extends CompileStep {
         }
         protoView.bindDirectiveProperty(
           directiveIndex++,
-          this._parser.parseBinding(expression),
+          expression.ast,
           dirProp,
           this._closureMap.setter(dirProp)
         );
diff --git a/modules/core/src/compiler/pipeline/element_binding_marker.js b/modules/core/src/compiler/pipeline/element_binding_marker.js
index fab83141b7..5adf802bd8 100644
--- a/modules/core/src/compiler/pipeline/element_binding_marker.js
+++ b/modules/core/src/compiler/pipeline/element_binding_marker.js
@@ -18,6 +18,7 @@ const NG_BINDING_CLASS = 'ng-binding';
  * Reads:
  * - CompileElement#textNodeBindings
  * - CompileElement#propertyBindings
+ * - CompileElement#variableBindings
  * - CompileElement#decoratorDirectives
  * - CompileElement#componentDirective
  * - CompileElement#templateDirective
@@ -27,6 +28,7 @@ export class ElementBindingMarker extends CompileStep {
     var hasBindings =
       (isPresent(current.textNodeBindings) && MapWrapper.size(current.textNodeBindings)>0) ||
       (isPresent(current.propertyBindings) && MapWrapper.size(current.propertyBindings)>0) ||
+      (isPresent(current.variableBindings) && MapWrapper.size(current.variableBindings)>0) ||
       (isPresent(current.decoratorDirectives) && current.decoratorDirectives.length > 0) ||
       isPresent(current.templateDirective) ||
       isPresent(current.componentDirective);
diff --git a/modules/core/src/compiler/pipeline/property_binding_parser.js b/modules/core/src/compiler/pipeline/property_binding_parser.js
index 75a44400d5..79cc94dc86 100644
--- a/modules/core/src/compiler/pipeline/property_binding_parser.js
+++ b/modules/core/src/compiler/pipeline/property_binding_parser.js
@@ -1,13 +1,18 @@
-import {isPresent, isBlank, RegExpWrapper} from 'facade/lang';
+import {isPresent, isBlank, RegExpWrapper, BaseException} from 'facade/lang';
 import {MapWrapper} from 'facade/collection';
+import {TemplateElement} from 'facade/dom';
+
+import {Parser} from 'change_detection/parser/parser';
+import {ExpressionWithSource} from 'change_detection/parser/ast';
 
 import {CompileStep} from './compile_step';
 import {CompileElement} from './compile_element';
 import {CompileControl} from './compile_control';
 
+import {interpolationToExpression} from './text_interpolation_parser';
+
 // TODO(tbosch): Cannot make this const/final right now because of the transpiler...
-var BIND_DASH_REGEXP = RegExpWrapper.create('bind-((?:[^-]|-(?!-))+)(?:--(.+))?');
-var PROP_BIND_REGEXP = RegExpWrapper.create('\\[([^|]+)(?:\\|(.+))?\\]');
+var BIND_NAME_REGEXP = RegExpWrapper.create('^(?:(?:(bind)|(let))-(.+))|\\[([^\\]]+)\\]');
 
 /**
  * Parses the property bindings on a single element.
@@ -16,15 +21,35 @@ var PROP_BIND_REGEXP = RegExpWrapper.create('\\[([^|]+)(?:\\|(.+))?\\]');
  * - CompileElement#propertyBindings
  */
 export class PropertyBindingParser extends CompileStep {
+  constructor(parser:Parser) {
+    this._parser = parser;
+  }
+
   process(parent:CompileElement, current:CompileElement, control:CompileControl) {
     var attrs = current.attrs();
     MapWrapper.forEach(attrs, (attrValue, attrName) => {
-      var parts = RegExpWrapper.firstMatch(BIND_DASH_REGEXP, attrName);
-      if (isBlank(parts)) {
-        parts = RegExpWrapper.firstMatch(PROP_BIND_REGEXP, attrName);
-      }
-      if (isPresent(parts)) {
-        current.addPropertyBinding(parts[1], attrValue);
+      var bindParts = RegExpWrapper.firstMatch(BIND_NAME_REGEXP, attrName);
+      if (isPresent(bindParts)) {
+        if (isPresent(bindParts[1])) {
+          // match: bind-prop
+          current.addPropertyBinding(bindParts[3], this._parser.parseBinding(attrValue));
+        } else if (isPresent(bindParts[2])) {
+          // match: let-prop
+          // Note: We assume that the ViewSplitter already did its work, i.e. template directive should
+          // only be present on <template> elements any more!
+          if (!(current.element instanceof TemplateElement)) {
+            throw new BaseException('let-* is only allowed on <template> elements!');
+          }
+          current.addVariableBinding(bindParts[3], attrValue);
+        } else if (isPresent(bindParts[4])) {
+          // match: [prop]
+          current.addPropertyBinding(bindParts[4], this._parser.parseBinding(attrValue));
+        }
+      } else {
+        var expression = interpolationToExpression(attrValue);
+        if (isPresent(expression)) {
+          current.addPropertyBinding(attrName, this._parser.parseBinding(expression));
+        }
       }
     });
   }
diff --git a/modules/core/src/compiler/pipeline/proto_view_builder.js b/modules/core/src/compiler/pipeline/proto_view_builder.js
index 6a28e4b3d1..d5013fcea6 100644
--- a/modules/core/src/compiler/pipeline/proto_view_builder.js
+++ b/modules/core/src/compiler/pipeline/proto_view_builder.js
@@ -1,5 +1,5 @@
 import {isPresent, BaseException} from 'facade/lang';
-import {ListWrapper} from 'facade/collection';
+import {ListWrapper, MapWrapper} from 'facade/collection';
 
 import {ProtoView} from '../view';
 import {ProtoWatchGroup} from 'change_detection/watch_group';
@@ -27,6 +27,11 @@ export class ProtoViewBuilder extends CompileStep {
           throw new BaseException('Only one nested view per element is allowed');
         }
         parent.inheritedElementBinder.nestedProtoView = inheritedProtoView;
+        if (isPresent(parent.variableBindings)) {
+          MapWrapper.forEach(parent.variableBindings, (mappedName, varName) => {
+            inheritedProtoView.bindVariable(varName, mappedName);
+          });
+        }
       }
     } else if (isPresent(parent)) {
       inheritedProtoView = parent.inheritedProtoView;
diff --git a/modules/core/src/compiler/pipeline/text_interpolation_parser.js b/modules/core/src/compiler/pipeline/text_interpolation_parser.js
index cf1588ccdc..2ced238d59 100644
--- a/modules/core/src/compiler/pipeline/text_interpolation_parser.js
+++ b/modules/core/src/compiler/pipeline/text_interpolation_parser.js
@@ -1,6 +1,8 @@
 import {RegExpWrapper, StringWrapper, isPresent} from 'facade/lang';
 import {Node, DOM} from 'facade/dom';
 
+import {Parser} from 'change_detection/parser/parser';
+
 import {CompileStep} from './compile_step';
 import {CompileElement} from './compile_element';
 import {CompileControl} from './compile_control';
@@ -9,6 +11,34 @@ import {CompileControl} from './compile_control';
 var INTERPOLATION_REGEXP = RegExpWrapper.create('\\{\\{(.*?)\\}\\}');
 var QUOTE_REGEXP = RegExpWrapper.create("'");
 
+export function interpolationToExpression(value:string):string {
+  // TODO: add stringify formatter when we support formatters
+  var parts = StringWrapper.split(value, INTERPOLATION_REGEXP);
+  if (parts.length <= 1) {
+    return null;
+  }
+  var expression = '';
+  for (var i=0; i<parts.length; i++) {
+    var expressionPart = null;
+    if (i%2 === 0) {
+      // fixed string
+      if (parts[i].length > 0) {
+        expressionPart = "'" + StringWrapper.replaceAll(parts[i], QUOTE_REGEXP, "\\'") + "'";
+      }
+    } else {
+      // expression
+      expressionPart = "(" + parts[i] + ")";
+    }
+    if (isPresent(expressionPart)) {
+      if (expression.length > 0) {
+        expression += '+';
+      }
+      expression += expressionPart;
+    }
+  }
+  return expression;
+}
+
 /**
  * Parses interpolations in direct text child nodes of the current element.
  *
@@ -16,6 +46,10 @@ var QUOTE_REGEXP = RegExpWrapper.create("'");
  * - CompileElement#textNodeBindings
  */
 export class TextInterpolationParser extends CompileStep {
+  constructor(parser:Parser) {
+    this._parser = parser;
+  }
+
   process(parent:CompileElement, current:CompileElement, control:CompileControl) {
     var element = current.element;
     var childNodes = DOM.templateAwareRoot(element).childNodes;
@@ -28,30 +62,10 @@ export class TextInterpolationParser extends CompileStep {
   }
 
   _parseTextNode(pipelineElement, node, nodeIndex) {
-    // TODO: add stringify formatter when we support formatters
-    var parts = StringWrapper.split(node.nodeValue, INTERPOLATION_REGEXP);
-    if (parts.length > 1) {
-      var expression = '';
-      for (var i=0; i<parts.length; i++) {
-        var expressionPart = null;
-        if (i%2 === 0) {
-          // fixed string
-          if (parts[i].length > 0) {
-            expressionPart = "'" + StringWrapper.replaceAll(parts[i], QUOTE_REGEXP, "\\'") + "'";
-          }
-        } else {
-          // expression
-          expressionPart = "(" + parts[i] + ")";
-        }
-        if (isPresent(expressionPart)) {
-          if (expression.length > 0) {
-            expression += '+';
-          }
-          expression += expressionPart;
-        }
-      }
+    var expression = interpolationToExpression(node.nodeValue);
+    if (isPresent(expression)) {
       DOM.setText(node, ' ');
-      pipelineElement.addTextNodeBinding(nodeIndex, expression);
+      pipelineElement.addTextNodeBinding(nodeIndex, this._parser.parseBinding(expression));
     }
   }
 }
diff --git a/modules/core/src/compiler/pipeline/view_splitter.js b/modules/core/src/compiler/pipeline/view_splitter.js
index 71fba22b83..6a328b3978 100644
--- a/modules/core/src/compiler/pipeline/view_splitter.js
+++ b/modules/core/src/compiler/pipeline/view_splitter.js
@@ -1,7 +1,9 @@
 import {isBlank, isPresent} from 'facade/lang';
-import {DOM} from 'facade/dom';
+import {DOM, TemplateElement} from 'facade/dom';
 import {MapWrapper, StringMapWrapper} from 'facade/collection';
 
+import {Parser} from 'change_detection/parser/parser';
+
 import {CompileStep} from './compile_step';
 import {CompileElement} from './compile_element';
 import {CompileControl} from './compile_control';
@@ -13,50 +15,39 @@ import {CompileControl} from './compile_control';
  *
  * Fills:
  * - CompileElement#isViewRoot
- *
- * Updates:
- * - CompileElement#templateDirective
- * - CompileElement#propertyBindings
- *
- * Reads:
- * - CompileElement#templateDirective
+ * - CompileElement#variableBindings
  * - CompileElement#propertyBindings
  */
 export class ViewSplitter extends CompileStep {
+  constructor(parser:Parser) {
+    this._parser = parser;
+  }
+
   process(parent:CompileElement, current:CompileElement, control:CompileControl) {
     var element = current.element;
-    if (isPresent(current.templateDirective)) {
-      var templateElement = DOM.createTemplate('');
-      var templateBoundProperties = MapWrapper.create();
-      var nonTemplateBoundProperties = MapWrapper.create();
-      this._splitElementPropertyBindings(current, templateBoundProperties, nonTemplateBoundProperties);
-
-      var newParentElement = new CompileElement(templateElement);
-      newParentElement.propertyBindings = templateBoundProperties;
-      newParentElement.templateDirective = current.templateDirective;
-      control.addParent(newParentElement);
-
-      // disconnect child view from their parent view
-      element.remove();
-
-      current.templateDirective = null;
-      current.propertyBindings = nonTemplateBoundProperties;
-      current.isViewRoot = true;
-    } else if (isBlank(parent)) {
+    if (isBlank(parent) || (current.element instanceof TemplateElement)) {
       current.isViewRoot = true;
+    } else {
+      var templateBindings = MapWrapper.get(current.attrs(), 'template');
+      if (isPresent(templateBindings)) {
+        current.isViewRoot = true;
+        var templateElement = DOM.createTemplate('');
+        var newParentElement = new CompileElement(templateElement);
+        this._parseTemplateBindings(templateBindings, newParentElement);
+        control.addParent(newParentElement);
+      }
     }
   }
 
-  _splitElementPropertyBindings(compileElement, templateBoundProperties, nonTemplateBoundProperties) {
-    var dirBindings = compileElement.templateDirective.annotation.bind;
-    if (isPresent(dirBindings) && isPresent(compileElement.propertyBindings)) {
-      MapWrapper.forEach(compileElement.propertyBindings, (expr, elProp) => {
-        if (isPresent(StringMapWrapper.get(dirBindings, elProp))) {
-          MapWrapper.set(templateBoundProperties, elProp, expr);
-        } else {
-          MapWrapper.set(nonTemplateBoundProperties, elProp, expr);
-        }
-      });
+  _parseTemplateBindings(templateBindings:string, compileElement:CompileElement) {
+    var bindings = this._parser.parseTemplateBindings(templateBindings);
+    for (var i=0; i<bindings.length; i++) {
+      var binding = bindings[i];
+      if (isPresent(binding.name)) {
+        compileElement.addVariableBinding(binding.key, binding.name);
+      } else {
+        compileElement.addPropertyBinding(binding.key, binding.expression);
+      }
     }
   }
 }
diff --git a/modules/core/src/compiler/view.js b/modules/core/src/compiler/view.js
index 651eedae33..3f8cefc972 100644
--- a/modules/core/src/compiler/view.js
+++ b/modules/core/src/compiler/view.js
@@ -78,6 +78,7 @@ export class ProtoView {
       protoWatchGroup:ProtoWatchGroup) {
     this.element = template;
     this.elementBinders = [];
+    this.variableBindings = MapWrapper.create();
     this.protoWatchGroup = protoWatchGroup;
     this.textNodesWithBindingCount = 0;
     this.elementsWithBindingCount = 0;
@@ -124,6 +125,10 @@ export class ProtoView {
     return view;
   }
 
+  bindVariable(contextName:string, templateName:string) {
+    MapWrapper.set(this.variableBindings, contextName, templateName);
+  }
+
   bindElement(protoElementInjector:ProtoElementInjector,
       componentDirective:AnnotatedType = null, templateDirective:AnnotatedType = null):ElementBinder {
     var elBinder = new ElementBinder(protoElementInjector, componentDirective, templateDirective);
diff --git a/modules/core/test/compiler/pipeline/directive_parser_spec.js b/modules/core/test/compiler/pipeline/directive_parser_spec.js
index 05b78890b5..12ef7d891b 100644
--- a/modules/core/test/compiler/pipeline/directive_parser_spec.js
+++ b/modules/core/test/compiler/pipeline/directive_parser_spec.js
@@ -1,6 +1,6 @@
 import {describe, beforeEach, it, expect, iit, ddescribe} from 'test_lib/test_lib';
 import {isPresent} from 'facade/lang';
-import {ListWrapper, MapWrapper} from 'facade/collection';
+import {ListWrapper, MapWrapper, StringMapWrapper} from 'facade/collection';
 import {DirectiveParser} from 'core/compiler/pipeline/directive_parser';
 import {CompilePipeline} from 'core/compiler/pipeline/compile_pipeline';
 import {CompileStep} from 'core/compiler/pipeline/compile_step';
@@ -12,6 +12,9 @@ import {Decorator} from 'core/annotations/decorator';
 import {Template} from 'core/annotations/template';
 import {TemplateConfig} from 'core/annotations/template_config';
 import {Reflector} from 'core/compiler/reflector';
+import {Parser} from 'change_detection/parser/parser';
+import {Lexer} from 'change_detection/parser/lexer';
+import {ClosureMap} from 'change_detection/parser/closure_map';
 
 export function main() {
   describe('DirectiveParser', () => {
@@ -22,7 +25,9 @@ export function main() {
       directives = [SomeDecorator, SomeTemplate, SomeTemplate2, SomeComponent, SomeComponent2];
     });
 
-    function createPipeline(propertyBindings = null) {
+    function createPipeline({propertyBindings, variableBindings}={}) {
+      var closureMap = new ClosureMap();
+      var parser = new Parser(new Lexer(), closureMap);
       var annotatedDirectives = ListWrapper.create();
       for (var i=0; i<directives.length; i++) {
         ListWrapper.push(annotatedDirectives, reflector.annotatedType(directives[i]));
@@ -30,7 +35,12 @@ export function main() {
 
       return new CompilePipeline([new MockStep((parent, current, control) => {
           if (isPresent(propertyBindings)) {
-            current.propertyBindings = propertyBindings;
+            StringMapWrapper.forEach(propertyBindings, (v, k) => {
+              current.addPropertyBinding(k, parser.parseBinding(v));
+            });
+          }
+          if (isPresent(variableBindings)) {
+            current.variableBindings = MapWrapper.createFromStringMap(variableBindings);
           }
         }), new DirectiveParser(annotatedDirectives)]);
     }
@@ -42,33 +52,26 @@ export function main() {
       expect(results[0].templateDirective).toBe(null);
     });
 
-    it('should detect directives in attributes', () => {
-      var results = createPipeline().process(createElement('<div some-decor some-templ some-comp></div>'));
-      expect(results[0].decoratorDirectives).toEqual([reflector.annotatedType(SomeDecorator)]);
-      expect(results[0].templateDirective).toEqual(reflector.annotatedType(SomeTemplate));
-      expect(results[0].componentDirective).toEqual(reflector.annotatedType(SomeComponent));
-    });
+    describe('component directives', () => {
+      it('should detect them in attributes', () => {
+        var results = createPipeline().process(createElement('<div some-comp></div>'));
+        expect(results[0].componentDirective).toEqual(reflector.annotatedType(SomeComponent));
+      });
 
-    it('should detect directives in property bindings', () => {
-      var pipeline = createPipeline(MapWrapper.createFromStringMap({
-        'some-decor': 'someExpr',
-        'some-templ': 'someExpr',
-        'some-comp': 'someExpr'
-      }));
-      var results = pipeline.process(createElement('<div></div>'));
-      expect(results[0].decoratorDirectives).toEqual([reflector.annotatedType(SomeDecorator)]);
-      expect(results[0].templateDirective).toEqual(reflector.annotatedType(SomeTemplate));
-      expect(results[0].componentDirective).toEqual(reflector.annotatedType(SomeComponent));
-    });
+      it('should detect them in property bindings', () => {
+        var pipeline = createPipeline({propertyBindings: {
+          'some-comp': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<div></div>'));
+        expect(results[0].componentDirective).toEqual(reflector.annotatedType(SomeComponent));
+      });
 
-    describe('errors', () => {
-
-      it('should not allow multiple template directives on the same element', () => {
-        expect( () => {
-          createPipeline().process(
-            createElement('<div some-templ some-templ2></div>')
-          );
-        }).toThrowError('Only one template directive per element is allowed!');
+      it('should detect them in variable bindings', () => {
+        var pipeline = createPipeline({variableBindings: {
+          'some-comp': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<div></div>'));
+        expect(results[0].componentDirective).toEqual(reflector.annotatedType(SomeComponent));
       });
 
       it('should not allow multiple component directives on the same element', () => {
@@ -78,6 +81,84 @@ export function main() {
           );
         }).toThrowError('Only one component directive per element is allowed!');
       });
+
+      it('should not allow component directives on <template> elements', () => {
+        expect( () => {
+          createPipeline().process(
+            createElement('<template some-comp></template>')
+          );
+        }).toThrowError('Only template directives are allowed on <template> elements!');
+      });
+    });
+
+    describe('template directives', () => {
+      it('should detect them in attributes', () => {
+        var results = createPipeline().process(createElement('<template some-templ></template>'));
+        expect(results[0].templateDirective).toEqual(reflector.annotatedType(SomeTemplate));
+      });
+
+      it('should detect them in property bindings', () => {
+        var pipeline = createPipeline({propertyBindings: {
+          'some-templ': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<template></template>'));
+        expect(results[0].templateDirective).toEqual(reflector.annotatedType(SomeTemplate));
+      });
+
+      it('should detect them in variable bindings', () => {
+        var pipeline = createPipeline({variableBindings: {
+          'some-templ': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<template></template>'));
+        expect(results[0].templateDirective).toEqual(reflector.annotatedType(SomeTemplate));
+      });
+
+      it('should not allow multiple template directives on the same element', () => {
+        expect( () => {
+          createPipeline().process(
+            createElement('<template some-templ some-templ2></template>')
+          );
+        }).toThrowError('Only one template directive per element is allowed!');
+      });
+
+      it('should not allow template directives on non <template> elements', () => {
+        expect( () => {
+          createPipeline().process(
+            createElement('<div some-templ></div>')
+          );
+        }).toThrowError('Template directives need to be placed on <template> elements or elements with template attribute!');
+      });
+    });
+
+    describe('decorator directives', () => {
+      it('should detect them in attributes', () => {
+        var results = createPipeline().process(createElement('<div some-decor></div>'));
+        expect(results[0].decoratorDirectives).toEqual([reflector.annotatedType(SomeDecorator)]);
+      });
+
+      it('should detect them in property bindings', () => {
+        var pipeline = createPipeline({propertyBindings: {
+          'some-decor': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<div></div>'));
+        expect(results[0].decoratorDirectives).toEqual([reflector.annotatedType(SomeDecorator)]);
+      });
+
+      it('should detect them in variable bindings', () => {
+        var pipeline = createPipeline({variableBindings: {
+          'some-decor': 'someExpr'
+        }});
+        var results = pipeline.process(createElement('<div></div>'));
+        expect(results[0].decoratorDirectives).toEqual([reflector.annotatedType(SomeDecorator)]);
+      });
+
+      it('should not allow decorator directives on <template> elements', () => {
+        expect( () => {
+          createPipeline().process(
+            createElement('<template some-decor></template>')
+          );
+        }).toThrowError('Only template directives are allowed on <template> elements!');
+      });
     });
 
   });
diff --git a/modules/core/test/compiler/pipeline/element_binder_builder_spec.js b/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
index f0619a2dc3..b0fc1b4381 100644
--- a/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
+++ b/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
@@ -31,6 +31,7 @@ export function main() {
     }={}) {
       var reflector = new Reflector();
       var closureMap = new ClosureMap();
+      var parser = new Parser(new Lexer(), closureMap);
       return new CompilePipeline([
         new MockStep((parent, current, control) => {
             if (isPresent(current.element.getAttribute('viewroot'))) {
@@ -38,22 +39,24 @@ export function main() {
               current.inheritedProtoView = new ProtoView(current.element, new ProtoWatchGroup());
             } else if (isPresent(parent)) {
               current.inheritedProtoView = parent.inheritedProtoView;
-            } else {
-              current.inheritedProtoView = null;
             }
             var hasBinding = false;
             if (isPresent(current.element.getAttribute('text-binding'))) {
-              current.textNodeBindings = textNodeBindings;
+              MapWrapper.forEach(textNodeBindings, (v,k) => {
+                current.addTextNodeBinding(k, parser.parseBinding(v));
+              });
               hasBinding = true;
             }
             if (isPresent(current.element.getAttribute('prop-binding'))) {
-              current.propertyBindings = propertyBindings;
+              if (isPresent(propertyBindings)) {
+                MapWrapper.forEach(propertyBindings, (v,k) => {
+                  current.addPropertyBinding(k, parser.parseBinding(v));
+                });
+              }
               hasBinding = true;
             }
             if (isPresent(protoElementInjector)) {
               current.inheritedProtoElementInjector = protoElementInjector;
-            } else {
-              current.inheritedProtoElementInjector = null;
             }
             if (isPresent(current.element.getAttribute('directives'))) {
               hasBinding = true;
@@ -65,7 +68,7 @@ export function main() {
               current.hasBindings = true;
               DOM.addClass(current.element, 'ng-binding');
             }
-          }), new ElementBinderBuilder(new Parser(new Lexer(), closureMap), closureMap)
+          }), new ElementBinderBuilder(closureMap)
       ]);
     }
 
diff --git a/modules/core/test/compiler/pipeline/element_binding_marker_spec.js b/modules/core/test/compiler/pipeline/element_binding_marker_spec.js
index 8f38697b85..7115bbc983 100644
--- a/modules/core/test/compiler/pipeline/element_binding_marker_spec.js
+++ b/modules/core/test/compiler/pipeline/element_binding_marker_spec.js
@@ -16,7 +16,7 @@ import {Component} from 'core/annotations/component';
 export function main() {
   describe('ElementBindingMarker', () => {
 
-    function createPipeline({textNodeBindings, propertyBindings, directives}={}) {
+    function createPipeline({textNodeBindings, propertyBindings, variableBindings, directives}={}) {
       var reflector = new Reflector();
       return new CompilePipeline([
         new MockStep((parent, current, control) => {
@@ -26,6 +26,9 @@ export function main() {
             if (isPresent(propertyBindings)) {
               current.propertyBindings = propertyBindings;
             }
+            if (isPresent(variableBindings)) {
+              current.variableBindings = variableBindings;
+            }
             if (isPresent(directives)) {
               for (var i=0; i<directives.length; i++) {
                 current.addDirective(reflector.annotatedType(directives[i]));
@@ -53,6 +56,12 @@ export function main() {
       assertBinding(results[0], true);
     });
 
+    it('should mark elements with variable bindings', () => {
+      var variableBindings = MapWrapper.createFromStringMap({'a': 'expr'});
+      var results = createPipeline({variableBindings: variableBindings}).process(createElement('<div></div>'));
+      assertBinding(results[0], true);
+    });
+
     it('should mark elements with decorator directives', () => {
       var results = createPipeline({
         directives: [SomeDecoratorDirective]
diff --git a/modules/core/test/compiler/pipeline/property_binding_parser_spec.js b/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
index f061be1472..4c0dd24663 100644
--- a/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
+++ b/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
@@ -4,20 +4,42 @@ import {CompilePipeline} from 'core/compiler/pipeline/compile_pipeline';
 import {DOM} from 'facade/dom';
 import {MapWrapper} from 'facade/collection';
 
+import {Parser} from 'change_detection/parser/parser';
+import {ClosureMap} from 'change_detection/parser/closure_map';
+import {Lexer} from 'change_detection/parser/lexer';
+
 export function main() {
   describe('PropertyBindingParser', () => {
     function createPipeline() {
-      return new CompilePipeline([new PropertyBindingParser()]);
+      return new CompilePipeline([new PropertyBindingParser(new Parser(new Lexer(), new ClosureMap()))]);
     }
 
     it('should detect [] syntax', () => {
       var results = createPipeline().process(createElement('<div [a]="b"></div>'));
-      expect(MapWrapper.get(results[0].propertyBindings, 'a')).toEqual('b');
+      expect(MapWrapper.get(results[0].propertyBindings, 'a').source).toEqual('b');
     });
 
     it('should detect bind- syntax', () => {
       var results = createPipeline().process(createElement('<div bind-a="b"></div>'));
-      expect(MapWrapper.get(results[0].propertyBindings, 'a')).toEqual('b');
+      expect(MapWrapper.get(results[0].propertyBindings, 'a').source).toEqual('b');
+    });
+
+    it('should detect interpolation syntax', () => {
+      // Note: we don't test all corner cases of interpolation as we assume shared functionality between text interpolation
+      // and attribute interpolation.
+      var results = createPipeline().process(createElement('<div a="{{b}}"></div>'));
+      expect(MapWrapper.get(results[0].propertyBindings, 'a').source).toEqual('(b)');
+    });
+
+    it('should detect let- syntax', () => {
+      var results = createPipeline().process(createElement('<template let-a="b"></template>'));
+      expect(MapWrapper.get(results[0].variableBindings, 'a')).toEqual('b');
+    });
+
+    it('should not allow let- syntax on non template elements', () => {
+      expect( () => {
+        createPipeline().process(createElement('<div let-a="b"></div>'))
+      }).toThrowError('let-* is only allowed on <template> elements!');
     });
   });
 }
diff --git a/modules/core/test/compiler/pipeline/proto_view_builder_spec.js b/modules/core/test/compiler/pipeline/proto_view_builder_spec.js
index aef96ff3ac..90bed242bd 100644
--- a/modules/core/test/compiler/pipeline/proto_view_builder_spec.js
+++ b/modules/core/test/compiler/pipeline/proto_view_builder_spec.js
@@ -7,14 +7,18 @@ import {CompileElement} from 'core/compiler/pipeline/compile_element';
 import {CompileStep} from 'core/compiler/pipeline/compile_step'
 import {CompileControl} from 'core/compiler/pipeline/compile_control';
 import {DOM} from 'facade/dom';
+import {MapWrapper} from 'facade/collection';
 
 export function main() {
   describe('ProtoViewBuilder', () => {
-    function createPipeline() {
+    function createPipeline(variableBindings=null) {
       return new CompilePipeline([new MockStep((parent, current, control) => {
         if (isPresent(current.element.getAttribute('viewroot'))) {
           current.isViewRoot = true;
         }
+        if (isPresent(current.element.getAttribute('var-binding'))) {
+          current.variableBindings = MapWrapper.createFromStringMap(variableBindings);
+        }
         current.inheritedElementBinder = new ElementBinder(null, null, null);
       }), new ProtoViewBuilder()]);
     }
@@ -37,16 +41,29 @@ export function main() {
       expect(results[1].inheritedProtoView.element).toBe(viewRootElement);
     });
 
-    it('should save ProtoView into elementBinder of parent element', () => {
-      var el = createElement('<div viewroot><span><a viewroot></a></span></div>');
+    it('should save ProtoView into the elementBinder of parent element', () => {
+      var el = createElement('<div viewroot><template><a viewroot></a></template></div>');
       var results = createPipeline().process(el);
       expect(results[1].inheritedElementBinder.nestedProtoView).toBe(results[2].inheritedProtoView);
     });
 
+    it('should bind variables to the nested ProtoView', () => {
+      var el = createElement('<div viewroot><template var-binding><a viewroot></a></template></div>');
+      var results = createPipeline({
+        'var1': 'map1',
+        'var2': 'map2'
+      }).process(el);
+      var npv = results[1].inheritedElementBinder.nestedProtoView;
+      expect(npv.variableBindings).toEqual(MapWrapper.createFromStringMap({
+        'var1': 'map1',
+        'var2': 'map2'
+      }));
+    });
+
     describe('errors', () => {
 
       it('should not allow multiple nested ProtoViews for the same parent element', () => {
-        var el = createElement('<div viewroot><span><a viewroot></a><a viewroot></a></span></div>');
+        var el = createElement('<div viewroot><template><a viewroot></a><a viewroot></a></template></div>');
         expect( () => {
           createPipeline().process(el);
         }).toThrowError('Only one nested view per element is allowed');
diff --git a/modules/core/test/compiler/pipeline/text_interpolation_parser_spec.js b/modules/core/test/compiler/pipeline/text_interpolation_parser_spec.js
index 886b884164..dc0a863c34 100644
--- a/modules/core/test/compiler/pipeline/text_interpolation_parser_spec.js
+++ b/modules/core/test/compiler/pipeline/text_interpolation_parser_spec.js
@@ -4,41 +4,45 @@ import {CompilePipeline} from 'core/compiler/pipeline/compile_pipeline';
 import {DOM} from 'facade/dom';
 import {MapWrapper} from 'facade/collection';
 
+import {Parser} from 'change_detection/parser/parser';
+import {ClosureMap} from 'change_detection/parser/closure_map';
+import {Lexer} from 'change_detection/parser/lexer';
+
 export function main() {
   describe('TextInterpolationParser', () => {
     function createPipeline() {
-      return new CompilePipeline([new TextInterpolationParser()]);
+      return new CompilePipeline([new TextInterpolationParser(new Parser(new Lexer(), new ClosureMap()))]);
     }
 
     it('should find text interpolation in normal elements', () => {
       var results = createPipeline().process(createElement('<div>{{expr1}}<span></span>{{expr2}}</div>'));
       var bindings = results[0].textNodeBindings;
-      expect(MapWrapper.get(bindings, 0)).toEqual("(expr1)");
-      expect(MapWrapper.get(bindings, 2)).toEqual("(expr2)");
+      expect(MapWrapper.get(bindings, 0).source).toEqual("(expr1)");
+      expect(MapWrapper.get(bindings, 2).source).toEqual("(expr2)");
     });
 
     it('should find text interpolation in template elements', () => {
       var results = createPipeline().process(createElement('<template>{{expr1}}<span></span>{{expr2}}</template>'));
       var bindings = results[0].textNodeBindings;
-      expect(MapWrapper.get(bindings, 0)).toEqual("(expr1)");
-      expect(MapWrapper.get(bindings, 2)).toEqual("(expr2)");
+      expect(MapWrapper.get(bindings, 0).source).toEqual("(expr1)");
+      expect(MapWrapper.get(bindings, 2).source).toEqual("(expr2)");
     });
 
     it('should allow multiple expressions', () => {
       var results = createPipeline().process(createElement('<div>{{expr1}}{{expr2}}</div>'));
       var bindings = results[0].textNodeBindings;
-      expect(MapWrapper.get(bindings, 0)).toEqual("(expr1)+(expr2)");
+      expect(MapWrapper.get(bindings, 0).source).toEqual("(expr1)+(expr2)");
     });
 
     it('should allow fixed text before, in between and after expressions', () => {
       var results = createPipeline().process(createElement('<div>a{{expr1}}b{{expr2}}c</div>'));
       var bindings = results[0].textNodeBindings;
-      expect(MapWrapper.get(bindings, 0)).toEqual("'a'+(expr1)+'b'+(expr2)+'c'");
+      expect(MapWrapper.get(bindings, 0).source).toEqual("'a'+(expr1)+'b'+(expr2)+'c'");
     });
 
     it('should escape quotes in fixed parts', () => {
       var results = createPipeline().process(createElement("<div>'\"a{{expr1}}</div>"));
-      expect(MapWrapper.get(results[0].textNodeBindings, 0)).toEqual("'\\'\"a'+(expr1)");
+      expect(MapWrapper.get(results[0].textNodeBindings, 0).source).toEqual("'\\'\"a'+(expr1)");
     });
   });
 }
diff --git a/modules/core/test/compiler/pipeline/view_splitter_spec.js b/modules/core/test/compiler/pipeline/view_splitter_spec.js
index dd5c9fe4b4..561edd7fde 100644
--- a/modules/core/test/compiler/pipeline/view_splitter_spec.js
+++ b/modules/core/test/compiler/pipeline/view_splitter_spec.js
@@ -4,51 +4,35 @@ import {MapWrapper} from 'facade/collection';
 
 import {ViewSplitter} from 'core/compiler/pipeline/view_splitter';
 import {CompilePipeline} from 'core/compiler/pipeline/compile_pipeline';
-import {CompileElement} from 'core/compiler/pipeline/compile_element';
-import {CompileStep} from 'core/compiler/pipeline/compile_step'
-import {CompileControl} from 'core/compiler/pipeline/compile_control';
 import {DOM, TemplateElement} from 'facade/dom';
-import {Reflector} from 'core/compiler/reflector';
-import {Template} from 'core/annotations/template';
-import {Decorator} from 'core/annotations/decorator';
-import {Component} from 'core/annotations/component';
+
+import {Parser} from 'change_detection/parser/parser';
+import {ClosureMap} from 'change_detection/parser/closure_map';
+import {Lexer} from 'change_detection/parser/lexer';
 
 export function main() {
   describe('ViewSplitter', () => {
 
-    function createPipeline({textNodeBindings, propertyBindings, directives}={}) {
-      var reflector = new Reflector();
-      return new CompilePipeline([
-        new MockStep((parent, current, control) => {
-          if (isPresent(current.element.getAttribute('tmpl'))) {
-            current.addDirective(reflector.annotatedType(SomeTemplateDirective));
-            if (isPresent(textNodeBindings)) {
-              current.textNodeBindings = textNodeBindings;
-            }
-            if (isPresent(propertyBindings)) {
-              current.propertyBindings = propertyBindings;
-            }
-            if (isPresent(directives)) {
-              for (var i=0; i<directives.length; i++) {
-                current.addDirective(reflector.annotatedType(directives[i]));
-              }
-            }
-          }
-        }), new ViewSplitter()
-      ]);
+    function createPipeline() {
+      return new CompilePipeline([new ViewSplitter(new Parser(new Lexer(), new ClosureMap()))]);
     }
 
-    function commonTests(useTemplateElement) {
-      var rootElement;
-      beforeEach( () => {
-        if (useTemplateElement) {
-          rootElement = createElement('<div><span tmpl></span></div>');
-        } else {
-          rootElement = createElement('<div><span tmpl></span></div>');
-        }
-      });
+    it('should mark root elements as viewRoot', () => {
+      var rootElement = createElement('<div></div>');
+      var results = createPipeline().process(rootElement);
+      expect(results[0].isViewRoot).toBe(true);
+    });
+
+    it('should mark <template> elements as viewRoot', () => {
+      var rootElement = createElement('<div><template></template></div>');
+      var results = createPipeline().process(rootElement);
+      expect(results[1].isViewRoot).toBe(true);
+    });
+
+    describe('elements with template attribute', () => {
 
       it('should insert an empty <template> element', () => {
+        var rootElement = createElement('<div><div template></div></div>');
         var originalChild = rootElement.childNodes[0];
         var results = createPipeline().process(rootElement);
         expect(results[0].element).toBe(rootElement);
@@ -57,79 +41,29 @@ export function main() {
         expect(results[2].element).toBe(originalChild);
       });
 
-      it('should move the template directive to the new element', () => {
+      it('should mark the element as viewRoot', () => {
+        var rootElement = createElement('<div><div template></div></div>');
         var results = createPipeline().process(rootElement);
-        expect(results[1].templateDirective.type).toBe(SomeTemplateDirective);
-        expect(results[2].templateDirective).toBe(null);
-      });
-
-      it('should split the property bindings depending on the bindings on the directive', () => {
-        var propertyBindings = MapWrapper.createFromStringMap({
-          'templateBoundProp': 'a',
-          'nonBoundProp': 'c'
-        });
-        var results = createPipeline({propertyBindings: propertyBindings}).process(rootElement);
-        expect(MapWrapper.get(results[1].propertyBindings, 'templateBoundProp')).toEqual('a');
-        expect(MapWrapper.get(results[2].propertyBindings, 'nonBoundProp')).toEqual('c');
-      });
-
-      it('should keep the component, decorator directives and text node bindings on the original element', () => {
-        var textNodeBindings = MapWrapper.create();
-        MapWrapper.set(textNodeBindings, 0, 'someExpr');
-        var directives = [SomeDecoratorDirective, SomeComponentDirective];
-        var results = createPipeline({
-          textNodeBindings: textNodeBindings,
-          directives: directives
-        }).process(rootElement);
-        expect(results[1].componentDirective).toBe(null);
-        expect(results[1].decoratorDirectives).toBe(null);
-        expect(results[1].textNodeBindings).toBe(null);
-        expect(results[2].componentDirective.type).toEqual(SomeComponentDirective);
-        expect(results[2].decoratorDirectives[0].type).toEqual(SomeDecoratorDirective);
-        expect(results[2].textNodeBindings).toEqual(textNodeBindings);
-      });
-
-      it('should set the isViewRoot flag for the root and nested views', () => {
-        var results = createPipeline().process(rootElement);
-        expect(results[0].isViewRoot).toBe(true);
-        expect(results[1].isViewRoot).toBe(false);
         expect(results[2].isViewRoot).toBe(true);
       });
-    }
 
-    describe('template directive on normal element', () => {
-      commonTests(false);
-    });
+      it('should add property bindings from the template attribute', () => {
+        var rootElement = createElement('<div><div template="prop:expr"></div></div>');
+        var results = createPipeline().process(rootElement);
+        expect(MapWrapper.get(results[1].propertyBindings, 'prop').source).toEqual('expr');
+      });
+
+      it('should add variable mappings from the template attribute', () => {
+        var rootElement = createElement('<div><div template="varName #mapName"></div></div>');
+        var results = createPipeline().process(rootElement);
+        expect(results[1].variableBindings).toEqual(MapWrapper.createFromStringMap({'varName': 'mapName'}));
+      });
 
-    describe('template directive on <template> element', () => {
-      commonTests(true);
     });
 
   });
 }
 
-class MockStep extends CompileStep {
-  constructor(process) {
-    this.processClosure = process;
-  }
-  process(parent:CompileElement, current:CompileElement, control:CompileControl) {
-    this.processClosure(parent, current, control);
-  }
-}
-
-@Template({
-  bind: {
-    'templateBoundProp': 'dirProp'
-  }
-})
-class SomeTemplateDirective {}
-
-@Component()
-class SomeComponentDirective {}
-
-@Decorator()
-class SomeDecoratorDirective {}
-
 function createElement(html) {
   return DOM.createTemplate(html).content.firstChild;
 }
diff --git a/modules/core/test/compiler/view_spec.js b/modules/core/test/compiler/view_spec.js
index 496481607f..be0a0337ae 100644
--- a/modules/core/test/compiler/view_spec.js
+++ b/modules/core/test/compiler/view_spec.js
@@ -46,7 +46,7 @@ export function main() {
           it('should collect property bindings on the root element if it has the ng-binding class', () => {
             var pv = new ProtoView(templateAwareCreateElement('<div [prop]="a" class="ng-binding"></div>'), new ProtoWatchGroup());
             pv.bindElement(null);
-            pv.bindElementProperty('prop', parser.parseBinding('a'));
+            pv.bindElementProperty('prop', parser.parseBinding('a').ast);
 
             var view = pv.instantiate(null, null, null);
             expect(view.bindElements.length).toEqual(1);
@@ -57,7 +57,7 @@ export function main() {
             var pv = new ProtoView(templateAwareCreateElement('<div><span></span><span class="ng-binding"></span></div>'),
               new ProtoWatchGroup());
             pv.bindElement(null);
-            pv.bindElementProperty('a', parser.parseBinding('b'));
+            pv.bindElementProperty('a', parser.parseBinding('b').ast);
 
             var view = pv.instantiate(null, null, null);
             expect(view.bindElements.length).toEqual(1);
@@ -71,8 +71,8 @@ export function main() {
           it('should collect text nodes under the root element', () => {
             var pv = new ProtoView(templateAwareCreateElement('<div class="ng-binding">{{}}<span></span>{{}}</div>'), new ProtoWatchGroup());
             pv.bindElement(null);
-            pv.bindTextNode(0, parser.parseBinding('a'));
-            pv.bindTextNode(2, parser.parseBinding('b'));
+            pv.bindTextNode(0, parser.parseBinding('a').ast);
+            pv.bindTextNode(2, parser.parseBinding('b').ast);
 
             var view = pv.instantiate(null, null, null);
             expect(view.textNodes.length).toEqual(2);
@@ -84,7 +84,7 @@ export function main() {
             var pv = new ProtoView(templateAwareCreateElement('<div><span> </span><span class="ng-binding">{{}}</span></div>'),
               new ProtoWatchGroup());
             pv.bindElement(null);
-            pv.bindTextNode(0, parser.parseBinding('b'));
+            pv.bindTextNode(0, parser.parseBinding('b').ast);
 
             var view = pv.instantiate(null, null, null);
             expect(view.textNodes.length).toEqual(1);
@@ -176,7 +176,7 @@ export function main() {
         function createComponentWithSubPV(subProtoView) {
           var pv = new ProtoView(createElement('<cmp class="ng-binding"></cmp>'), new ProtoWatchGroup());
           var binder = pv.bindElement(new ProtoElementInjector(null, 0, [SomeComponent], true));
-          binder.componentDirective = someComponentDirective; 
+          binder.componentDirective = someComponentDirective;
           binder.nestedProtoView = subProtoView;
           return pv;
         }
@@ -239,7 +239,7 @@ export function main() {
           var pv = new ProtoView(createElement('<div class="ng-binding">{{}}</div>'),
             new ProtoWatchGroup());
           pv.bindElement(null);
-          pv.bindTextNode(0, parser.parseBinding('foo'));
+          pv.bindTextNode(0, parser.parseBinding('foo').ast);
           createView(pv);
 
           ctx.foo = 'buz';
@@ -251,7 +251,7 @@ export function main() {
           var pv = new ProtoView(createElement('<div class="ng-binding"></div>'),
             new ProtoWatchGroup());
           pv.bindElement(null);
-          pv.bindElementProperty('id', parser.parseBinding('foo'));
+          pv.bindElementProperty('id', parser.parseBinding('foo').ast);
           createView(pv);
 
           ctx.foo = 'buz';
@@ -263,7 +263,7 @@ export function main() {
           var pv = new ProtoView(createElement('<div class="ng-binding"></div>'),
             new ProtoWatchGroup());
           pv.bindElement(new ProtoElementInjector(null, 0, [SomeDirective]));
-          pv.bindDirectiveProperty( 0, parser.parseBinding('foo'), 'prop', closureMap.setter('prop'));
+          pv.bindDirectiveProperty( 0, parser.parseBinding('foo').ast, 'prop', closureMap.setter('prop'));
           createView(pv);
 
           ctx.foo = 'buz';