diff --git a/lib/elements/dom-repeat.html b/lib/elements/dom-repeat.html
index f08249c905..81c841caba 100644
--- a/lib/elements/dom-repeat.html
+++ b/lib/elements/dom-repeat.html
@@ -610,18 +610,20 @@
       // If path was index into array...
       if (itemsIdx == parseInt(itemsIdx, 10)) {
         let itemSubPath = dot < 0 ? '' : itemsPath.substring(dot+1);
-        // See if the item subpath should trigger a full refresh...
-        if (!this.__handleObservedPaths(itemSubPath)) {
-          // If not, forward to the instance for that index
-          let instIdx = this.__itemsIdxToInstIdx[itemsIdx];
-          let inst = this.__instances[instIdx];
-          if (inst) {
-            let itemPath = this.as + (itemSubPath ? '.' + itemSubPath : '');
-            // This is effectively `notifyPath`, but avoids some of the overhead
-            // of the public API
-            inst._setPendingPropertyOrPath(itemPath, value, false, true);
-            inst._flushProperties();
-          }
+        // If the path is observed, it will trigger a full refresh
+        this.__handleObservedPaths(itemSubPath)
+        // Note, even if a rull refresh is triggered, always do the path
+        // notification because unless mutableData is used for dom-repeat
+        // and all elements in the instance subtree, a full refresh may
+        // not trigger the proper update.
+        let instIdx = this.__itemsIdxToInstIdx[itemsIdx];
+        let inst = this.__instances[instIdx];
+        if (inst) {
+          let itemPath = this.as + (itemSubPath ? '.' + itemSubPath : '');
+          // This is effectively `notifyPath`, but avoids some of the overhead
+          // of the public API
+          inst._setPendingPropertyOrPath(itemPath, value, false, true);
+          inst._flushProperties();
         }
         return true;
       }
diff --git a/test/unit/dom-repeat.html b/test/unit/dom-repeat.html
index 79176432f9..9d5cc2ba92 100644
--- a/test/unit/dom-repeat.html
+++ b/test/unit/dom-repeat.html
@@ -4088,6 +4088,24 @@ <h4>x-repeat-chunked</h4>
         assert(stamped[0].classList.contains('x-simple-repeat'), 'expected scoping');
       });
 
+      test('paths update on observed properties', function() {
+        let simple = fixture('simple');
+        Polymer.flush();
+        //debugger;
+        var stamped = simple.root.querySelectorAll('*:not(template):not(dom-repeat)');
+        assert.equal(stamped[0].itemaProp, 'prop-1');
+        simple.$.repeat.observe = 'prop';
+        Polymer.flush();
+        simple.set('items.0.prop', {foo: 0});
+        Polymer.flush();
+        assert.equal(stamped[0].get('itemaProp.foo'), 0);
+        simple.set('items.0.prop.foo', 1);
+        Polymer.flush();
+        assert.equal(stamped[0].get('itemaProp.foo'), 1);
+        simple.set('items.0.prop.foo', 2);
+        Polymer.flush();
+        assert.equal(stamped[0].get('itemaProp.foo'), 2);
+      });
     });
 
     suite('timing', function() {