diff --git a/tests/app/ui/bindable-tests.ts b/tests/app/ui/bindable-tests.ts
index 219d5eaae..841c9b4c2 100644
--- a/tests/app/ui/bindable-tests.ts
+++ b/tests/app/ui/bindable-tests.ts
@@ -1261,4 +1261,46 @@ export function test_only_Bindable_BindingContext_Null_DoesNotThrow() {
         obj.bind(options);
         obj.bindingContext = new observable.Observable({ a: "b" });
         obj.bindingContext = null;
+}
+
+export function test_Observable_from_nested_json_binds_correctly() {
+    let expectedValue = "Test";
+    var model = new observable.Observable({
+        "firstObject": {
+            "secondObject": {
+                "dummyProperty": "text"
+            }
+        }
+    });
+
+    var obj = new bindable.Bindable();
+    obj.bind({
+        sourceProperty: "firstObject.secondObject.dummyProperty",
+        targetProperty: "test"
+    }, model);
+
+    model.get("firstObject").get("secondObject").set("dummyProperty", expectedValue);
+
+    TKUnit.assertEqual(obj.get("test"), expectedValue);
+}
+
+export function test_Observable_from_nested_json_binds_correctly_when_upper_object_is_changed() {
+    let expectedValue = "Test";
+    var model = new observable.Observable({
+        "firstObject": {
+            "secondObject": {
+                "dummyProperty": "text"
+            }
+        }
+    });
+
+    var obj = new bindable.Bindable();
+    obj.bind({
+        sourceProperty: "firstObject.secondObject.dummyProperty",
+        targetProperty: "test"
+    }, model);
+
+    model.get("firstObject").set("secondObject", new observable.Observable({"dummyProperty": expectedValue}));
+
+    TKUnit.assertEqual(obj.get("test"), expectedValue);
 }
\ No newline at end of file
diff --git a/tns-core-modules/data/observable/observable.ts b/tns-core-modules/data/observable/observable.ts
index 1a144680c..1ad93a2f2 100644
--- a/tns-core-modules/data/observable/observable.ts
+++ b/tns-core-modules/data/observable/observable.ts
@@ -56,6 +56,9 @@ export class Observable implements definition.Observable {
             this._map = new Map<string, Object>();
             for (var prop in json) {
                 if (json.hasOwnProperty(prop)) {
+                    if (!Array.isArray(json[prop]) && typeof json[prop] === 'object') {
+                        json[prop] = new Observable(json[prop]);
+                    }
                     this._defineNewProperty(prop);
                     this.set(prop, json[prop]);
                 }