diff --git a/src/components/tabs/js/templateDirective.js b/src/components/tabs/js/templateDirective.js
index e41eda34178..4e39ba88152 100644
--- a/src/components/tabs/js/templateDirective.js
+++ b/src/components/tabs/js/templateDirective.js
@@ -15,7 +15,7 @@ function MdTemplate ($compile, $mdUtil) {
   };
   function link (scope, element, attr, ctrl) {
     if (!ctrl) return;
-    var compileScope = scope.compileScope.$new();
+    var compileScope = scope.compileScope;
     element.html(scope.template);
     $compile(element.contents())(compileScope);
     element.on('DOMSubtreeModified', function () {
diff --git a/src/components/tabs/tabs.spec.js b/src/components/tabs/tabs.spec.js
index 7c41971918f..20445f0e369 100644
--- a/src/components/tabs/tabs.spec.js
+++ b/src/components/tabs/tabs.spec.js
@@ -277,4 +277,24 @@ describe('<md-tabs>', function () {
       expect(tab.find('md-tab-body').length).toBe(0);
     });
   });
+
+  describe('internal scope', function () {
+    it('should have the same internal scope as external', function () {
+      var template = '\
+        <md-tabs md-selected="selectedTab">\
+          <md-tab label="a">\
+            <md-button ng-click="data = false">Set data to false</md-button>\
+          </md-tab>\
+        </md-tabs>\
+      ';
+      var element = setup(template);
+      var button = element.find('md-button');
+
+      expect(button[0 ].tagName).toBe('MD-BUTTON');
+
+      button.triggerHandler('click');
+
+      expect(element.scope().data).toBe(false);
+    });
+  });
 });