diff --git a/lib/block.dart b/lib/block.dart
index 6704f28c8..7f9c77a8d 100644
--- a/lib/block.dart
+++ b/lib/block.dart
@@ -322,7 +322,8 @@ class ComponentFactory {
         shadowScope[attrName] = attrValue;
       } else if (mapping == '=') {
         ParsedFn expr = parser(attrValue);
-        var shadowValue;
+        var shadowValue = expr(parentScope);
+        shadowScope[attrName] = shadowValue;
         shadowScope.$watch(
             () => expr(parentScope),
             (v) => shadowScope[attrName] = shadowValue = v);
diff --git a/test/compiler_spec.dart b/test/compiler_spec.dart
index 4aff600c1..c63117967 100644
--- a/test/compiler_spec.dart
+++ b/test/compiler_spec.dart
@@ -456,6 +456,18 @@ main() {
         expect($rootScope.done).toEqual(true);
       }));
 
+      it('should create a component with IO and "=" binding value should be available', inject(() {
+        $rootScope.name = 'misko';
+        var element = $(r'<div><io attr="A" expr="name" ondone="done=true"></io></div>');
+        $compile(element)(injector, element);
+        var component = $rootScope.ioComponent;
+        expect(component.scope.expr).toEqual('misko');
+        $rootScope.$apply();
+        component.scope.expr = 'angular';
+        $rootScope.$apply();
+        expect($rootScope.name).toEqual('angular');
+      }));
+
       it('should expose mapped attributes as camel case', inject(() {
         var element = $('<camel-case-map camel-case=6></camel-case-map>');
         $compile(element)(injector, element);