diff --git a/bower.json b/bower.json
index 4c723034..98eb1659 100644
--- a/bower.json
+++ b/bower.json
@@ -1,6 +1,6 @@
 {
   "name": "aurelia-templating",
-  "version": "1.0.0-beta.1.0.3",
+  "version": "1.0.0-beta.1.1.0",
   "description": "An extensible HTML templating engine supporting databinding, custom elements, attached behaviors and more.",
   "keywords": [
     "aurelia",
diff --git a/dist/amd/aurelia-templating.d.ts b/dist/amd/aurelia-templating.d.ts
index 775de511..2c2f9ae1 100644
--- a/dist/amd/aurelia-templating.d.ts
+++ b/dist/amd/aurelia-templating.d.ts
@@ -880,6 +880,7 @@ declare module 'aurelia-templating' {
       */
     constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object);
     
+    // This is referenced internally in the controller's bind method.
     /**
       * Creates a view or returns one from the internal cache, if available.
       * @return The created view.
@@ -1363,12 +1364,12 @@ declare module 'aurelia-templating' {
   }
   
   /**
-  * Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+  * Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
   */
   export function children(selectorOrConfig: string | Object): any;
   
   /**
-  * Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+  * Creates a behavior property that references an immediate content child element that matches the provided selector.
   */
   export function child(selectorOrConfig: string | Object): any;
   class ChildObserver {
diff --git a/dist/amd/aurelia-templating.js b/dist/amd/aurelia-templating.js
index c6858241..6916e34b 100644
--- a/dist/amd/aurelia-templating.js
+++ b/dist/amd/aurelia-templating.js
@@ -187,6 +187,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
       instruction.host = host;
       instruction.viewModel = viewModel;
       instruction.viewFactory = viewFactory;
+      instruction.inheritBindingContext = true;
       return instruction;
     };
 
@@ -212,6 +213,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
       this.attributes = null;
       this.type = null;
       this.attrName = null;
+      this.inheritBindingContext = false;
     }
 
     return BehaviorInstruction;
@@ -2674,7 +2676,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
       this.isAttached = false;
       this.view = null;
       this.isBound = false;
-      this.bindingContext = null;
+      this.scope = null;
 
       var observerLookup = behavior.observerLocator.getOrCreateObserversLookup(viewModel);
       var handlesBind = behavior.handlesBind;
@@ -2717,10 +2719,9 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
       var x = undefined;
       var observer = undefined;
       var selfSubscriber = undefined;
-      var context = scope.bindingContext;
 
       if (this.isBound) {
-        if (this.bindingContext === context) {
+        if (this.scope === scope) {
           return;
         }
 
@@ -2728,7 +2729,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
       }
 
       this.isBound = true;
-      this.bindingContext = context;
+      this.scope = scope;
 
       for (i = 0, ii = boundProperties.length; i < ii; ++i) {
         x = boundProperties[i];
@@ -2747,14 +2748,29 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
         observer.selfSubscriber = selfSubscriber;
       }
 
+      var overrideContext = undefined;
       if (this.view !== null) {
         if (skipSelfSubscriber) {
           this.view.viewModelScope = scope;
         }
 
-        this.view.bind(this.viewModel, _aureliaBinding.createOverrideContext(this.viewModel, scope.overrideContext));
+        if (this.viewModel === scope.overrideContext.bindingContext) {
+          overrideContext = scope.overrideContext;
+        } else if (this.instruction.inheritBindingContext) {
+            overrideContext = _aureliaBinding.createOverrideContext(this.viewModel, scope.overrideContext);
+          } else {
+              overrideContext = _aureliaBinding.createOverrideContext(this.viewModel);
+              overrideContext.__parentOverrideContext = scope.overrideContext;
+            }
+        this.view.bind(this.viewModel, overrideContext);
       } else if (skipSelfSubscriber) {
-        this.viewModel.bind(context, scope.overrideContext);
+        overrideContext = scope.overrideContext;
+
+        if (scope.overrideContext.__parentOverrideContext !== undefined && this.viewModel.viewFactory && this.viewModel.viewFactory.factoryCreateInstruction.partReplacements) {
+          overrideContext = Object.assign({}, scope.overrideContext);
+          overrideContext.parentOverrideContext = scope.overrideContext.__parentOverrideContext;
+        }
+        this.viewModel.bind(scope.bindingContext, overrideContext);
       }
     };
 
@@ -3279,7 +3295,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
           node = template;
         }
       } else if (this.elementName !== null) {
-        var _partReplacements2 = instruction.partReplacements = {};
+        var _partReplacements2 = {};
 
         if (this.processContent(compiler, resources, node, instruction) && node.hasChildNodes()) {
           if (this.usesShadowDOM) {
@@ -3293,6 +3309,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
               if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
                 _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
                 _aureliaPal.DOM.removeNode(currentChild, parentNode);
+                instruction.partReplacements = _partReplacements2;
               }
 
               currentChild = nextSibling;
@@ -3311,6 +3328,7 @@ define(['exports', 'core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-pa
               if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
                 _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
                 _aureliaPal.DOM.removeNode(currentChild, parentNode);
+                instruction.partReplacements = _partReplacements2;
               } else {
                 fragment.appendChild(currentChild);
               }
diff --git a/dist/aurelia-templating.d.ts b/dist/aurelia-templating.d.ts
index 775de511..2c2f9ae1 100644
--- a/dist/aurelia-templating.d.ts
+++ b/dist/aurelia-templating.d.ts
@@ -880,6 +880,7 @@ declare module 'aurelia-templating' {
       */
     constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object);
     
+    // This is referenced internally in the controller's bind method.
     /**
       * Creates a view or returns one from the internal cache, if available.
       * @return The created view.
@@ -1363,12 +1364,12 @@ declare module 'aurelia-templating' {
   }
   
   /**
-  * Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+  * Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
   */
   export function children(selectorOrConfig: string | Object): any;
   
   /**
-  * Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+  * Creates a behavior property that references an immediate content child element that matches the provided selector.
   */
   export function child(selectorOrConfig: string | Object): any;
   class ChildObserver {
diff --git a/dist/aurelia-templating.js b/dist/aurelia-templating.js
index 6c691f06..8402b587 100644
--- a/dist/aurelia-templating.js
+++ b/dist/aurelia-templating.js
@@ -266,6 +266,7 @@ export class BehaviorInstruction {
     instruction.host = host;
     instruction.viewModel = viewModel;
     instruction.viewFactory = viewFactory;
+    instruction.inheritBindingContext = true;
     return instruction;
   }
 
@@ -286,6 +287,7 @@ export class BehaviorInstruction {
     this.attributes = null;
     this.type = null;
     this.attrName = null;
+    this.inheritBindingContext = false;
   }
 }
 
@@ -2086,7 +2088,7 @@ export class BoundViewFactory {
   constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object) {
     this.parentContainer = parentContainer;
     this.viewFactory = viewFactory;
-    this.factoryCreateInstruction = { partReplacements: partReplacements };
+    this.factoryCreateInstruction = { partReplacements: partReplacements }; //This is referenced internally in the controller's bind method.
   }
 
   /**
@@ -3226,7 +3228,7 @@ export class Controller {
     this.isAttached = false;
     this.view = null;
     this.isBound = false;
-    this.bindingContext = null;
+    this.scope = null;
 
     let observerLookup = behavior.observerLocator.getOrCreateObserversLookup(viewModel);
     let handlesBind = behavior.handlesBind;
@@ -3264,7 +3266,7 @@ export class Controller {
     this.view.overrideContext = overrideContext || createOverrideContext(this.viewModel);
     this.view._isUserControlled = true;
 
-    if(this.behavior.handlesCreated) {
+    if (this.behavior.handlesCreated) {
       this.viewModel.created(owningView || null, this.view);
     }
 
@@ -3283,10 +3285,9 @@ export class Controller {
     let x;
     let observer;
     let selfSubscriber;
-    let context = scope.bindingContext;
 
     if (this.isBound) {
-      if (this.bindingContext === context) {
+      if (this.scope === scope) {
         return;
       }
 
@@ -3294,7 +3295,7 @@ export class Controller {
     }
 
     this.isBound = true;
-    this.bindingContext = context;
+    this.scope = scope;
 
     for (i = 0, ii = boundProperties.length; i < ii; ++i) {
       x = boundProperties[i];
@@ -3313,14 +3314,40 @@ export class Controller {
       observer.selfSubscriber = selfSubscriber;
     }
 
+    let overrideContext;
     if (this.view !== null) {
       if (skipSelfSubscriber) {
         this.view.viewModelScope = scope;
       }
-
-      this.view.bind(this.viewModel, createOverrideContext(this.viewModel, scope.overrideContext));
+      // do we need to create an overrideContext or is the scope's overrideContext
+      // valid for this viewModel?
+      if (this.viewModel === scope.overrideContext.bindingContext) {
+        overrideContext = scope.overrideContext;
+      // should we inherit the parent scope? (eg compose / router)
+      } else if (this.instruction.inheritBindingContext) {
+        overrideContext = createOverrideContext(this.viewModel, scope.overrideContext);
+      // create the overrideContext and capture the parent without making it
+      // available to AccessScope. We may need it later for template-part replacements.
+      } else {
+        overrideContext = createOverrideContext(this.viewModel);
+        overrideContext.__parentOverrideContext = scope.overrideContext;
+      }
+      this.view.bind(this.viewModel, overrideContext);
     } else if (skipSelfSubscriber) {
-      this.viewModel.bind(context, scope.overrideContext);
+      overrideContext = scope.overrideContext;
+      // the factoryCreateInstruction's partReplacements will either be null or an object
+      // containing the replacements. If there are partReplacements we need to preserve the parent
+      // context to allow replacement parts to bind to both the custom element scope and the ambient scope.
+      // Note that factoryCreateInstruction is a property defined on BoundViewFactory. The code below assumes the
+      // behavior stores a the BoundViewFactory on its viewModel under the name of viewFactory. This is implemented
+      // by the replaceable custom attribute.
+      if (scope.overrideContext.__parentOverrideContext !== undefined
+        && this.viewModel.viewFactory && this.viewModel.viewFactory.factoryCreateInstruction.partReplacements) {
+        // clone the overrideContext and connect the ambient context.
+        overrideContext = Object.assign({}, scope.overrideContext);
+        overrideContext.parentOverrideContext = scope.overrideContext.__parentOverrideContext;
+      }
+      this.viewModel.bind(scope.bindingContext, overrideContext);
     }
   }
 
@@ -3932,7 +3959,7 @@ export class HtmlBehaviorResource {
         node = template;
       }
     } else if (this.elementName !== null) { //custom element
-      let partReplacements = instruction.partReplacements = {};
+      let partReplacements = {};
 
       if (this.processContent(compiler, resources, node, instruction) && node.hasChildNodes()) {
         if (this.usesShadowDOM) {
@@ -3946,6 +3973,7 @@ export class HtmlBehaviorResource {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               partReplacements[toReplace] = compiler.compile(currentChild, resources);
               DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = partReplacements;
             }
 
             currentChild = nextSibling;
@@ -3964,6 +3992,7 @@ export class HtmlBehaviorResource {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               partReplacements[toReplace] = compiler.compile(currentChild, resources);
               DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = partReplacements;
             } else {
               fragment.appendChild(currentChild);
             }
@@ -4144,14 +4173,14 @@ function createChildObserverDecorator(selectorOrConfig, all) {
 }
 
 /**
-* Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+* Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
 */
 export function children(selectorOrConfig: string | Object): any {
   return createChildObserverDecorator(selectorOrConfig, true);
 }
 
 /**
-* Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+* Creates a behavior property that references an immediate content child element that matches the provided selector.
 */
 export function child(selectorOrConfig: string | Object): any {
   return createChildObserverDecorator(selectorOrConfig, false);
diff --git a/dist/commonjs/aurelia-templating.d.ts b/dist/commonjs/aurelia-templating.d.ts
index 775de511..2c2f9ae1 100644
--- a/dist/commonjs/aurelia-templating.d.ts
+++ b/dist/commonjs/aurelia-templating.d.ts
@@ -880,6 +880,7 @@ declare module 'aurelia-templating' {
       */
     constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object);
     
+    // This is referenced internally in the controller's bind method.
     /**
       * Creates a view or returns one from the internal cache, if available.
       * @return The created view.
@@ -1363,12 +1364,12 @@ declare module 'aurelia-templating' {
   }
   
   /**
-  * Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+  * Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
   */
   export function children(selectorOrConfig: string | Object): any;
   
   /**
-  * Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+  * Creates a behavior property that references an immediate content child element that matches the provided selector.
   */
   export function child(selectorOrConfig: string | Object): any;
   class ChildObserver {
diff --git a/dist/commonjs/aurelia-templating.js b/dist/commonjs/aurelia-templating.js
index 57e532d1..6daf0b52 100644
--- a/dist/commonjs/aurelia-templating.js
+++ b/dist/commonjs/aurelia-templating.js
@@ -208,6 +208,7 @@ var BehaviorInstruction = (function () {
     instruction.host = host;
     instruction.viewModel = viewModel;
     instruction.viewFactory = viewFactory;
+    instruction.inheritBindingContext = true;
     return instruction;
   };
 
@@ -233,6 +234,7 @@ var BehaviorInstruction = (function () {
     this.attributes = null;
     this.type = null;
     this.attrName = null;
+    this.inheritBindingContext = false;
   }
 
   return BehaviorInstruction;
@@ -2695,7 +2697,7 @@ var Controller = (function () {
     this.isAttached = false;
     this.view = null;
     this.isBound = false;
-    this.bindingContext = null;
+    this.scope = null;
 
     var observerLookup = behavior.observerLocator.getOrCreateObserversLookup(viewModel);
     var handlesBind = behavior.handlesBind;
@@ -2738,10 +2740,9 @@ var Controller = (function () {
     var x = undefined;
     var observer = undefined;
     var selfSubscriber = undefined;
-    var context = scope.bindingContext;
 
     if (this.isBound) {
-      if (this.bindingContext === context) {
+      if (this.scope === scope) {
         return;
       }
 
@@ -2749,7 +2750,7 @@ var Controller = (function () {
     }
 
     this.isBound = true;
-    this.bindingContext = context;
+    this.scope = scope;
 
     for (i = 0, ii = boundProperties.length; i < ii; ++i) {
       x = boundProperties[i];
@@ -2768,14 +2769,29 @@ var Controller = (function () {
       observer.selfSubscriber = selfSubscriber;
     }
 
+    var overrideContext = undefined;
     if (this.view !== null) {
       if (skipSelfSubscriber) {
         this.view.viewModelScope = scope;
       }
 
-      this.view.bind(this.viewModel, _aureliaBinding.createOverrideContext(this.viewModel, scope.overrideContext));
+      if (this.viewModel === scope.overrideContext.bindingContext) {
+        overrideContext = scope.overrideContext;
+      } else if (this.instruction.inheritBindingContext) {
+          overrideContext = _aureliaBinding.createOverrideContext(this.viewModel, scope.overrideContext);
+        } else {
+            overrideContext = _aureliaBinding.createOverrideContext(this.viewModel);
+            overrideContext.__parentOverrideContext = scope.overrideContext;
+          }
+      this.view.bind(this.viewModel, overrideContext);
     } else if (skipSelfSubscriber) {
-      this.viewModel.bind(context, scope.overrideContext);
+      overrideContext = scope.overrideContext;
+
+      if (scope.overrideContext.__parentOverrideContext !== undefined && this.viewModel.viewFactory && this.viewModel.viewFactory.factoryCreateInstruction.partReplacements) {
+        overrideContext = Object.assign({}, scope.overrideContext);
+        overrideContext.parentOverrideContext = scope.overrideContext.__parentOverrideContext;
+      }
+      this.viewModel.bind(scope.bindingContext, overrideContext);
     }
   };
 
@@ -3300,7 +3316,7 @@ var HtmlBehaviorResource = (function () {
         node = template;
       }
     } else if (this.elementName !== null) {
-      var _partReplacements2 = instruction.partReplacements = {};
+      var _partReplacements2 = {};
 
       if (this.processContent(compiler, resources, node, instruction) && node.hasChildNodes()) {
         if (this.usesShadowDOM) {
@@ -3314,6 +3330,7 @@ var HtmlBehaviorResource = (function () {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
               _aureliaPal.DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = _partReplacements2;
             }
 
             currentChild = nextSibling;
@@ -3332,6 +3349,7 @@ var HtmlBehaviorResource = (function () {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
               _aureliaPal.DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = _partReplacements2;
             } else {
               fragment.appendChild(currentChild);
             }
diff --git a/dist/es6/aurelia-templating.d.ts b/dist/es6/aurelia-templating.d.ts
index 775de511..2c2f9ae1 100644
--- a/dist/es6/aurelia-templating.d.ts
+++ b/dist/es6/aurelia-templating.d.ts
@@ -880,6 +880,7 @@ declare module 'aurelia-templating' {
       */
     constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object);
     
+    // This is referenced internally in the controller's bind method.
     /**
       * Creates a view or returns one from the internal cache, if available.
       * @return The created view.
@@ -1363,12 +1364,12 @@ declare module 'aurelia-templating' {
   }
   
   /**
-  * Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+  * Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
   */
   export function children(selectorOrConfig: string | Object): any;
   
   /**
-  * Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+  * Creates a behavior property that references an immediate content child element that matches the provided selector.
   */
   export function child(selectorOrConfig: string | Object): any;
   class ChildObserver {
diff --git a/dist/es6/aurelia-templating.js b/dist/es6/aurelia-templating.js
index 6c691f06..8402b587 100644
--- a/dist/es6/aurelia-templating.js
+++ b/dist/es6/aurelia-templating.js
@@ -266,6 +266,7 @@ export class BehaviorInstruction {
     instruction.host = host;
     instruction.viewModel = viewModel;
     instruction.viewFactory = viewFactory;
+    instruction.inheritBindingContext = true;
     return instruction;
   }
 
@@ -286,6 +287,7 @@ export class BehaviorInstruction {
     this.attributes = null;
     this.type = null;
     this.attrName = null;
+    this.inheritBindingContext = false;
   }
 }
 
@@ -2086,7 +2088,7 @@ export class BoundViewFactory {
   constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object) {
     this.parentContainer = parentContainer;
     this.viewFactory = viewFactory;
-    this.factoryCreateInstruction = { partReplacements: partReplacements };
+    this.factoryCreateInstruction = { partReplacements: partReplacements }; //This is referenced internally in the controller's bind method.
   }
 
   /**
@@ -3226,7 +3228,7 @@ export class Controller {
     this.isAttached = false;
     this.view = null;
     this.isBound = false;
-    this.bindingContext = null;
+    this.scope = null;
 
     let observerLookup = behavior.observerLocator.getOrCreateObserversLookup(viewModel);
     let handlesBind = behavior.handlesBind;
@@ -3264,7 +3266,7 @@ export class Controller {
     this.view.overrideContext = overrideContext || createOverrideContext(this.viewModel);
     this.view._isUserControlled = true;
 
-    if(this.behavior.handlesCreated) {
+    if (this.behavior.handlesCreated) {
       this.viewModel.created(owningView || null, this.view);
     }
 
@@ -3283,10 +3285,9 @@ export class Controller {
     let x;
     let observer;
     let selfSubscriber;
-    let context = scope.bindingContext;
 
     if (this.isBound) {
-      if (this.bindingContext === context) {
+      if (this.scope === scope) {
         return;
       }
 
@@ -3294,7 +3295,7 @@ export class Controller {
     }
 
     this.isBound = true;
-    this.bindingContext = context;
+    this.scope = scope;
 
     for (i = 0, ii = boundProperties.length; i < ii; ++i) {
       x = boundProperties[i];
@@ -3313,14 +3314,40 @@ export class Controller {
       observer.selfSubscriber = selfSubscriber;
     }
 
+    let overrideContext;
     if (this.view !== null) {
       if (skipSelfSubscriber) {
         this.view.viewModelScope = scope;
       }
-
-      this.view.bind(this.viewModel, createOverrideContext(this.viewModel, scope.overrideContext));
+      // do we need to create an overrideContext or is the scope's overrideContext
+      // valid for this viewModel?
+      if (this.viewModel === scope.overrideContext.bindingContext) {
+        overrideContext = scope.overrideContext;
+      // should we inherit the parent scope? (eg compose / router)
+      } else if (this.instruction.inheritBindingContext) {
+        overrideContext = createOverrideContext(this.viewModel, scope.overrideContext);
+      // create the overrideContext and capture the parent without making it
+      // available to AccessScope. We may need it later for template-part replacements.
+      } else {
+        overrideContext = createOverrideContext(this.viewModel);
+        overrideContext.__parentOverrideContext = scope.overrideContext;
+      }
+      this.view.bind(this.viewModel, overrideContext);
     } else if (skipSelfSubscriber) {
-      this.viewModel.bind(context, scope.overrideContext);
+      overrideContext = scope.overrideContext;
+      // the factoryCreateInstruction's partReplacements will either be null or an object
+      // containing the replacements. If there are partReplacements we need to preserve the parent
+      // context to allow replacement parts to bind to both the custom element scope and the ambient scope.
+      // Note that factoryCreateInstruction is a property defined on BoundViewFactory. The code below assumes the
+      // behavior stores a the BoundViewFactory on its viewModel under the name of viewFactory. This is implemented
+      // by the replaceable custom attribute.
+      if (scope.overrideContext.__parentOverrideContext !== undefined
+        && this.viewModel.viewFactory && this.viewModel.viewFactory.factoryCreateInstruction.partReplacements) {
+        // clone the overrideContext and connect the ambient context.
+        overrideContext = Object.assign({}, scope.overrideContext);
+        overrideContext.parentOverrideContext = scope.overrideContext.__parentOverrideContext;
+      }
+      this.viewModel.bind(scope.bindingContext, overrideContext);
     }
   }
 
@@ -3932,7 +3959,7 @@ export class HtmlBehaviorResource {
         node = template;
       }
     } else if (this.elementName !== null) { //custom element
-      let partReplacements = instruction.partReplacements = {};
+      let partReplacements = {};
 
       if (this.processContent(compiler, resources, node, instruction) && node.hasChildNodes()) {
         if (this.usesShadowDOM) {
@@ -3946,6 +3973,7 @@ export class HtmlBehaviorResource {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               partReplacements[toReplace] = compiler.compile(currentChild, resources);
               DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = partReplacements;
             }
 
             currentChild = nextSibling;
@@ -3964,6 +3992,7 @@ export class HtmlBehaviorResource {
             if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
               partReplacements[toReplace] = compiler.compile(currentChild, resources);
               DOM.removeNode(currentChild, parentNode);
+              instruction.partReplacements = partReplacements;
             } else {
               fragment.appendChild(currentChild);
             }
@@ -4144,14 +4173,14 @@ function createChildObserverDecorator(selectorOrConfig, all) {
 }
 
 /**
-* Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+* Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
 */
 export function children(selectorOrConfig: string | Object): any {
   return createChildObserverDecorator(selectorOrConfig, true);
 }
 
 /**
-* Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+* Creates a behavior property that references an immediate content child element that matches the provided selector.
 */
 export function child(selectorOrConfig: string | Object): any {
   return createChildObserverDecorator(selectorOrConfig, false);
diff --git a/dist/system/aurelia-templating.d.ts b/dist/system/aurelia-templating.d.ts
index 775de511..2c2f9ae1 100644
--- a/dist/system/aurelia-templating.d.ts
+++ b/dist/system/aurelia-templating.d.ts
@@ -880,6 +880,7 @@ declare module 'aurelia-templating' {
       */
     constructor(parentContainer: Container, viewFactory: ViewFactory, partReplacements?: Object);
     
+    // This is referenced internally in the controller's bind method.
     /**
       * Creates a view or returns one from the internal cache, if available.
       * @return The created view.
@@ -1363,12 +1364,12 @@ declare module 'aurelia-templating' {
   }
   
   /**
-  * Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector.
+  * Creates a behavior property that references an array of immediate content child elements that matches the provided selector.
   */
   export function children(selectorOrConfig: string | Object): any;
   
   /**
-  * Creates a behavior property that references an immediate content child elememnt that matches the provided selector.
+  * Creates a behavior property that references an immediate content child element that matches the provided selector.
   */
   export function child(selectorOrConfig: string | Object): any;
   class ChildObserver {
diff --git a/dist/system/aurelia-templating.js b/dist/system/aurelia-templating.js
index bc8b33c7..90bd7572 100644
--- a/dist/system/aurelia-templating.js
+++ b/dist/system/aurelia-templating.js
@@ -806,6 +806,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
           instruction.host = host;
           instruction.viewModel = viewModel;
           instruction.viewFactory = viewFactory;
+          instruction.inheritBindingContext = true;
           return instruction;
         };
 
@@ -831,6 +832,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
           this.attributes = null;
           this.type = null;
           this.attrName = null;
+          this.inheritBindingContext = false;
         }
 
         return BehaviorInstruction;
@@ -2985,7 +2987,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
           this.isAttached = false;
           this.view = null;
           this.isBound = false;
-          this.bindingContext = null;
+          this.scope = null;
 
           var observerLookup = behavior.observerLocator.getOrCreateObserversLookup(viewModel);
           var handlesBind = behavior.handlesBind;
@@ -3028,10 +3030,9 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
           var x = undefined;
           var observer = undefined;
           var selfSubscriber = undefined;
-          var context = scope.bindingContext;
 
           if (this.isBound) {
-            if (this.bindingContext === context) {
+            if (this.scope === scope) {
               return;
             }
 
@@ -3039,7 +3040,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
           }
 
           this.isBound = true;
-          this.bindingContext = context;
+          this.scope = scope;
 
           for (i = 0, ii = boundProperties.length; i < ii; ++i) {
             x = boundProperties[i];
@@ -3058,14 +3059,29 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
             observer.selfSubscriber = selfSubscriber;
           }
 
+          var overrideContext = undefined;
           if (this.view !== null) {
             if (skipSelfSubscriber) {
               this.view.viewModelScope = scope;
             }
 
-            this.view.bind(this.viewModel, createOverrideContext(this.viewModel, scope.overrideContext));
+            if (this.viewModel === scope.overrideContext.bindingContext) {
+              overrideContext = scope.overrideContext;
+            } else if (this.instruction.inheritBindingContext) {
+                overrideContext = createOverrideContext(this.viewModel, scope.overrideContext);
+              } else {
+                  overrideContext = createOverrideContext(this.viewModel);
+                  overrideContext.__parentOverrideContext = scope.overrideContext;
+                }
+            this.view.bind(this.viewModel, overrideContext);
           } else if (skipSelfSubscriber) {
-            this.viewModel.bind(context, scope.overrideContext);
+            overrideContext = scope.overrideContext;
+
+            if (scope.overrideContext.__parentOverrideContext !== undefined && this.viewModel.viewFactory && this.viewModel.viewFactory.factoryCreateInstruction.partReplacements) {
+              overrideContext = Object.assign({}, scope.overrideContext);
+              overrideContext.parentOverrideContext = scope.overrideContext.__parentOverrideContext;
+            }
+            this.viewModel.bind(scope.bindingContext, overrideContext);
           }
         };
 
@@ -3567,7 +3583,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
               node = template;
             }
           } else if (this.elementName !== null) {
-            var _partReplacements2 = instruction.partReplacements = {};
+            var _partReplacements2 = {};
 
             if (this.processContent(compiler, resources, node, instruction) && node.hasChildNodes()) {
               if (this.usesShadowDOM) {
@@ -3581,6 +3597,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
                   if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
                     _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
                     DOM.removeNode(currentChild, parentNode);
+                    instruction.partReplacements = _partReplacements2;
                   }
 
                   currentChild = nextSibling;
@@ -3599,6 +3616,7 @@ System.register(['core-js', 'aurelia-logging', 'aurelia-metadata', 'aurelia-path
                   if (currentChild.tagName === 'TEMPLATE' && (toReplace = currentChild.getAttribute('replace-part'))) {
                     _partReplacements2[toReplace] = compiler.compile(currentChild, resources);
                     DOM.removeNode(currentChild, parentNode);
+                    instruction.partReplacements = _partReplacements2;
                   } else {
                     fragment.appendChild(currentChild);
                   }
diff --git a/doc/CHANGELOG.md b/doc/CHANGELOG.md
index 9643aafd..d947b1a6 100644
--- a/doc/CHANGELOG.md
+++ b/doc/CHANGELOG.md
@@ -1,3 +1,17 @@
+### 1.0.0-beta.1.1.0 (2016-01-29)
+
+
+#### Bug Fixes
+
+* **Controller:** handle scope inheritance in template part with repeat Related to #244 ([9a488c44](http://github.com/aurelia/templating/commit/9a488c44e86872c91b2f86953519c8ef7308a262))
+* **controller:** stop element from inheriting scope ([a3ced53d](http://github.com/aurelia/templating/commit/a3ced53d67749244a6ea61d5193b04330e392bfc))
+
+
+#### Features
+
+* **all:** update jspm meta; core-js; aurelia-deps ([bdff3232](http://github.com/aurelia/templating/commit/bdff323282ebd7228063cb08a961a3258215fcea))
+
+
 ### 1.0.0-beta.1.0.3 (2016-01-08)
 
 
diff --git a/doc/api.json b/doc/api.json
index 317a3b7d..5ddb90d8 100644
--- a/doc/api.json
+++ b/doc/api.json
@@ -902,7 +902,7 @@
                   "type": {
                     "type": "reference",
                     "name": "TaskQueue",
-                    "id": 1596,
+                    "id": 1603,
                     "moduleName": "\"aurelia-task-queue\""
                   }
                 },
@@ -1747,7 +1747,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -3053,7 +3053,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Origin",
-                    "id": 1410,
+                    "id": 1416,
                     "moduleName": "\"aurelia-metadata\""
                   }
                 }
@@ -3213,7 +3213,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -3270,7 +3270,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -3589,7 +3589,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -3687,7 +3687,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -3744,7 +3744,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -4611,7 +4611,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -5126,7 +5126,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 }
@@ -5170,7 +5170,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -5524,7 +5524,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 }
@@ -5568,7 +5568,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -6238,7 +6238,7 @@
                   "type": {
                     "type": "reference",
                     "name": "TemplateRegistryEntry",
-                    "id": 1259,
+                    "id": 1265,
                     "moduleName": "\"aurelia-loader\""
                   }
                 }
@@ -6401,7 +6401,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -7628,7 +7628,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Loader",
-                    "id": 1274,
+                    "id": 1280,
                     "moduleName": "\"aurelia-loader\""
                   }
                 },
@@ -7644,7 +7644,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -7970,7 +7970,7 @@
                   "type": {
                     "type": "reference",
                     "name": "TemplateRegistryEntry",
-                    "id": 1259,
+                    "id": 1265,
                     "moduleName": "\"aurelia-loader\""
                   }
                 },
@@ -8064,7 +8064,7 @@
                       {
                         "type": "reference",
                         "name": "TemplateRegistryEntry",
-                        "id": 1259
+                        "id": 1265
                       }
                     ]
                   }
@@ -8278,7 +8278,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Container",
-                    "id": 1153,
+                    "id": 1159,
                     "moduleName": "\"aurelia-dependency-injection\""
                   }
                 },
@@ -8550,7 +8550,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Origin",
-                    "id": 1410,
+                    "id": 1416,
                     "moduleName": "\"aurelia-metadata\""
                   }
                 }
@@ -8594,7 +8594,7 @@
                   "type": {
                     "type": "reference",
                     "name": "Origin",
-                    "id": 1410,
+                    "id": 1416,
                     "moduleName": "\"aurelia-metadata\""
                   }
                 }
@@ -10133,7 +10133,7 @@
           "type": {
             "type": "reference",
             "name": "Container",
-            "id": 1153
+            "id": 1159
           }
         },
         {
@@ -10150,7 +10150,7 @@
           "type": {
             "type": "reference",
             "name": "Container",
-            "id": 1153
+            "id": 1159
           }
         },
         {
@@ -10384,7 +10384,7 @@
           "type": {
             "type": "reference",
             "name": "Container",
-            "id": 1153
+            "id": 1159
           }
         },
         {
@@ -10780,7 +10780,7 @@
                       "type": {
                         "type": "reference",
                         "name": "Container",
-                        "id": 1153
+                        "id": 1159
                       }
                     },
                     {
@@ -11270,7 +11270,7 @@
           "kindString": "Call signature",
           "flags": {},
           "comment": {
-            "shortText": "Creates a behavior property that references an immediate content child elememnt that matches the provided selector."
+            "shortText": "Creates a behavior property that references an immediate content child element that matches the provided selector."
           },
           "parameters": [
             {
@@ -11317,7 +11317,7 @@
           "kindString": "Call signature",
           "flags": {},
           "comment": {
-            "shortText": "Creates a behavior property that references an array of immediate content child elememnts that matches the provided selector."
+            "shortText": "Creates a behavior property that references an array of immediate content child elements that matches the provided selector."
           },
           "parameters": [
             {
diff --git a/package.json b/package.json
index 68972172..55489304 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "aurelia-templating",
-  "version": "1.0.0-beta.1.0.3",
+  "version": "1.0.0-beta.1.1.0",
   "description": "An extensible HTML templating engine supporting databinding, custom elements, attached behaviors and more.",
   "keywords": [
     "aurelia",