@@ -621,6 +621,13 @@ function $CompileProvider($provide) {
 
         directiveName = directive.name;
 
+        if (directiveValue = directive.controller) {
+          controllerDirectives = controllerDirectives || {};
+          assertNoDuplicate("'" + directiveName + "' controller",
+              controllerDirectives[directiveName], directive, $compileNode);
+          controllerDirectives[directiveName] = directive;
+        }
+
         if (directiveValue = directive.transclude) {
           assertNoDuplicate('transclusion', transcludeDirective, directive, $compileNode);
           transcludeDirective = directive;
@@ -698,13 +705,6 @@ function $CompileProvider($provide) {
           }
         }
 
-        if (!directive.templateUrl && directive.controller) {
-          controllerDirectives = controllerDirectives || {};
-          assertNoDuplicate("'" + directiveName + "' controller",
-              controllerDirectives[directiveName], directive, $compileNode);
-          controllerDirectives[directiveName] = directive;
-        }
-
         if (directive.terminal) {
           nodeLinkFn.terminal = true;
           terminalPriority = Math.max(terminalPriority, directive.priority);
@@ -962,7 +962,7 @@ function $CompileProvider($provide) {
           origAsyncDirective = directives.shift(),
           // The fact that we have to copy and patch the directive seems wrong!
           derivedSyncDirective = extend({}, origAsyncDirective, {
-            templateUrl: null, transclude: null, scope: null
+            controller: null, templateUrl: null, transclude: null, scope: null
           });
 
       $compileNode.html('');
@@ -1008,9 +1008,10 @@ function $CompileProvider($provide) {
               replaceWith(linkRootElement, jqLite(beforeTemplateLinkNode), linkNode);
             }
 
-            afterTemplateNodeLinkFn(function() {
-              beforeTemplateNodeLinkFn(afterTemplateChildLinkFn, scope, linkNode, $rootElement, controller);
-            }, scope, linkNode, $rootElement, controller);
+            afterTemplateNodeLinkFn(
+              beforeTemplateNodeLinkFn(afterTemplateChildLinkFn, scope, linkNode, $rootElement, controller),
+              scope, linkNode, $rootElement, controller
+            );
           }
           linkQueue = null;
         }).
 
@@ -2258,6 +2258,61 @@ describe('$compile', function() {
     });
 
 
+    it('should instantiate the controller after the isolate scope bindings are initialized (with template)', function () {
+      module(function () {
+        var Ctrl = function ($scope, log) {
+          log('myFoo=' + $scope.myFoo);
+        };
+
+        directive('myDirective', function () {
+          return {
+            scope: {
+              myFoo: "="
+            },
+            template: '<p>Hello</p>',
+            controller: Ctrl
+          };
+        });
+      });
+
+      inject(function ($templateCache, $compile, $rootScope, log) {
+        $rootScope.foo = "bar";
+
+        element = $compile('<div my-directive my-foo="foo"></div>')($rootScope);
+        $rootScope.$apply();
+        expect(log).toEqual('myFoo=bar');
+      });
+    });
+
+
+    it('should instantiate the controller after the isolate scope bindings are initialized (with templateUrl)', function () {
+      module(function () {
+        var Ctrl = function ($scope, log) {
+          log('myFoo=' + $scope.myFoo);
+        };
+
+        directive('myDirective', function () {
+          return {
+            scope: {
+              myFoo: "="
+            },
+            templateUrl: 'hello.html',
+            controller: Ctrl
+          };
+        });
+      });
+
+      inject(function ($templateCache, $compile, $rootScope, log) {
+        $templateCache.put('hello.html', '<p>Hello</p>');
+        $rootScope.foo = "bar";
+
+        element = $compile('<div my-directive my-foo="foo"></div>')($rootScope);
+        $rootScope.$apply();
+        expect(log).toEqual('myFoo=bar');
+      });
+    });
+
+
     it('should instantiate controllers in the parent->child->baby order when nested transluction, templateUrl and ' +
         'replacement are in the mix', function() {
       // similar to the test above, except that we have one more layer of nesting and nested transclusion