diff --git a/src/lib/dom-api-mutation-content.html b/src/lib/dom-api-mutation-content.html
index b603d91ca8..f458046eb4 100644
--- a/src/lib/dom-api-mutation-content.html
+++ b/src/lib/dom-api-mutation-content.html
@@ -23,13 +23,17 @@
 
     Polymer.Base.extend(DomApi.MutationContent.prototype, {
 
-      addListener: function(callback, includeChanges) {
-        this._includeChanges = includeChanges;
-        var h = DomApi.Mutation.prototype.addListener.call(this, callback);
+      addListener: function(callback, options) {
+        var h = DomApi.Mutation.prototype.addListener.call(this, callback, 
+          options);
         this._scheduleNotify();
         return h;
       },
 
+      _ensureSetup: function(options) {
+        this._describeChanges = options && options.changes;
+      },
+
       notify: function() {
         if (this._hasListeners()) {
           this._scheduleNotify();
@@ -37,7 +41,7 @@
       },
 
       _notify: function() {
-        var info = this._includeChanges ? this._calcChanges() : {};
+        var info = this._describeChanges ? this._calcChanges() : {};
         if (info) {
           info.target = this.node;
           this._callListeners(info);
@@ -75,20 +79,29 @@
 
     if (Settings.useShadow) {
       
+      var ensureSetup = DomApi.MutationContent.prototype._ensureSetup;
+
       Polymer.Base.extend(DomApi.MutationContent.prototype, {
         
-        _ensureObserver: function() {
+        _ensureSetup: function(options) {
+          ensureSetup.call(this, options);
+          this._trackAttributes = this._trackAttributes ||
+            options && options.attributes;
           var root = this.domApi.getOwnerRoot();
           var host = root && root.host;
           if (host) {
             this._observer = Polymer.dom(host).observeNodes(
-              this.notify.bind(this));
+              this.notify.bind(this), {attributes: this._trackAttributes});
           }
         },
 
-        _cleanupObserver: function() {
+        _ensureCleanup: function() {
           if (this._observer) {
-            Polymer.dom(host).unobserveNodes(this._observer);
+            var root = this.domApi.getOwnerRoot();
+            var host = root && root.host;
+            if (host) {
+              Polymer.dom(host).unobserveNodes(this._observer);
+            }
           }
         }
 
diff --git a/src/lib/dom-api-mutation.html b/src/lib/dom-api-mutation.html
index 1d3b16fd8f..802355c693 100644
--- a/src/lib/dom-api-mutation.html
+++ b/src/lib/dom-api-mutation.html
@@ -26,24 +26,23 @@
 
     DomApi.Mutation.prototype = {
 
-      addListener: function(callback) {
-        this._ensureObserver();
-        return this._listeners.push(callback);
+      addListener: function(callback, options) {
+        this._ensureSetup(options);
+        return this._listeners.push({fn: callback, options: options});
       },
 
       removeListener: function(handle) {
         this._listeners.splice(handle - 1, 1);
         if (!this._hasListeners()) {
-          this._cleanupObserver();
+          this._ensureCleanup();
         }
       },
 
-      _ensureObserver: function() {
+      _ensureSetup: function(options) {
         this._observeContentElements(this.domApi.childNodes);
       },
 
-      // TODO(sorvell): unobserver content?
-      _cleanupObserver: function() {},
+      _ensureCleanup: function() {}, // abstract
 
       _hasListeners: function() {
         return Boolean(this._listeners.length);
@@ -83,7 +82,7 @@
       },
 
       _notify: function(mxns) {
-        var info = {
+        var info = mxns || {
           target: this.node,
           addedNodes: this._addedNodes,
           removedNodes: this._removedNodes
@@ -103,20 +102,26 @@
         for (var i=0, h, n; (i < elements.length) && (n=elements[i]); i++) {
           if (this._isContent(n)) {
             n.__observeNodesMap = n.__observeNodesMap || new WeakMap();
-            if (n.__observeNodesMap.get(this) === undefined) {
-              h = Polymer.dom(n).observeNodes(
-                this._callListeners.bind(this), true);
+            if (n.__observeNodesMap.get(this) == null) {
+              h = this._observeContent(n);
               n.__observeNodesMap.set(this, h);
             }
           }
         }
       },
 
+      _observeContent: function(content) {
+        return Polymer.dom(content).observeNodes(this._notify.bind(this), {
+          changes: true
+        });
+      },
+
       _unobserveContentElements: function(elements) {
         for (var i=0, n, h; (i < elements.length) && (n=elements[i]); i++) {
           if (this._isContent(n)) {
             h = n.__observeNodesMap.get(this);
             if (h) {
+              n.__observeNodesMap.set(this, null);
               Polymer.dom(n).unobserveNodes(h);
             }
           }
@@ -127,10 +132,12 @@
         return (node.localName === 'content');
       },
 
-      _callListeners: function(info) {
+      _callListeners: function(info, filter) {
         var o$ = this._listeners;
         for (var i=0, o; (i < o$.length) && (o=o$[i]); i++) {
-          o.call(this.node, info);
+          if (!filter || filter(o.options)) {
+            o.fn.call(this.node, info);
+          }
         }
       }
 
@@ -140,7 +147,9 @@
 
       Polymer.Base.extend(DomApi.Mutation.prototype, {
         
-        _ensureObserver: function() {
+        _ensureSetup: function(options) {
+          this._trackAttributes = this._trackAttributes ||
+            options && options.attributes;
           if (!this._observer) {
             this._observer = 
               new MutationObserver(this._notify.bind(this));
@@ -165,7 +174,7 @@
           }
         },
 
-        _cleanupObserver: function() {
+        _ensureCleanup: function() {
           this._observer.disconnect();
           Polymer.dom.removePreflush(this._preflush);
         },
@@ -176,20 +185,30 @@
             addedNodes: [],
             removedNodes: []
           };
-          mxns.forEach(function(m) {
-            if (m.addedNodes) {
-              for (var i=0; i < m.addedNodes.length; i++) {
-                info.addedNodes.push(m.addedNodes[i]);
+          // collapse multiple mutations into one view
+          if (Array.isArray(mxns)) {
+            Array.prototype.forEach.call(mxns, function(m) {
+              if (m.addedNodes) {
+                for (var i=0; i < m.addedNodes.length; i++) {
+                  info.addedNodes.push(m.addedNodes[i]);
+                }
               }
-            }
-            if (m.removedNodes) {
-              for (var i=0; i < m.removedNodes.length; i++) {
-                info.removedNodes.push(m.removedNodes[i]);
+              if (m.removedNodes) {
+                for (var i=0; i < m.removedNodes.length; i++) {
+                  info.removedNodes.push(m.removedNodes[i]);
+                }
               }
-            }
-          });
+            });
+          } else if (mxns) {
+            info = mxns;
+          }
           if (info.addedNodes.length || info.removedNodes.length) {
             this._updateContentElements(info);
+            // attribute tracking helps us notice distributed nodes changes
+            // needed only with shadow dom.
+            if (this._trackAttributes) {
+              this._updateAttributeObservers(info);
+            }
             this._callListeners(info);
           }
         },
@@ -198,6 +217,54 @@
           if (this._observer) {
             this._notify(this._observer.takeRecords());
           }
+        },
+
+        _observeContent: function(content) {
+          return Polymer.dom(content).observeNodes(this._notify.bind(this), {
+            changes: true, 
+            attributes: this._trackAttributes
+          });
+        },
+
+        _updateAttributeObservers: function(info) {
+          this._observeAttributes(info.addedNodes);
+          this._unobserveAttributes(info.removedNodes);
+        },
+
+        _observeAttributes: function(elements) {
+          for (var i=0, h, n; (i < elements.length) && (n=elements[i]); i++) {
+            if (n.nodeType === Node.ELEMENT_NODE) {
+              this._ensureElementAttrObserver(n);
+            }
+          }
+        },
+
+        _ensureElementAttrObserver: function(element) {
+          this._attrObservers = this._attrObservers || new WeakMap();
+          if (!this._attrObservers.get(element)) {
+            var self = this;
+            this._attrObservers.set(element, new MutationObserver(
+              function(mxns) {
+                self._callListeners(mxns, function(options) {
+                  return Boolean(options && options.attributes);
+                });
+              }
+            ));
+            this._attrObservers.get(element)
+              .observe(element, {attributes: true});
+          }
+        },
+
+        _unobserveAttributes: function(elements) {
+          for (var i=0, h, n; (i < elements.length) && (n=elements[i]); i++) {
+            if (n.nodeType === Node.ELEMENT_NODE) {
+              h = this._attrObservers.get(n);
+              if (h) {
+                h.disconnect(n);
+              }
+              this._attrObservers.set(n, null);
+            }
+          }
         }
 
       });
diff --git a/src/lib/dom-api.html b/src/lib/dom-api.html
index 388f84b900..f697088e5f 100644
--- a/src/lib/dom-api.html
+++ b/src/lib/dom-api.html
@@ -525,7 +525,7 @@
         return n;
       },
 
-      observeNodes: function(callback) {
+      observeNodes: function(callback, options) {
         if (!this.observer) {
           this.observer = this.node.localName === CONTENT ?
             new DomApi.MutationContent(this) :
diff --git a/test/smoke/observeReNodes2.html b/test/smoke/observeReNodes-attr.html
similarity index 74%
rename from test/smoke/observeReNodes2.html
rename to test/smoke/observeReNodes-attr.html
index e9477e1fc2..d53a509725 100644
--- a/test/smoke/observeReNodes2.html
+++ b/test/smoke/observeReNodes-attr.html
@@ -25,6 +25,7 @@
         },
 
         observe: function() {
+          console.warn('observeNodes', this.localName);
           this._childObserver = Polymer.dom(this).observeNodes(function(info) {
             info.addedNodes.forEach(function(n) {
               if (n.nodeType === Node.ELEMENT_NODE) {
@@ -36,7 +37,7 @@
                 console.log('removed:', n.localName, n.textContent);
               }
             });
-          });
+          }, {changes: true, attributes: true});
           this._contentObserver = Polymer.dom(this.$.c).observeNodes(function(info) {
             info.addedNodes.forEach(function(n) {
               if (n.nodeType === Node.ELEMENT_NODE) {
@@ -48,12 +49,13 @@
                 console.log('%c content removed:', 'color: blue;', n.localName, n.textContent);
               }
             });
-          }, true);
+          }, {changes: true, attributes: true});
         },
 
         unobserve: function() {
+          console.warn('unobserveNodes', this.localName);
           Polymer.dom(this).unobserveNodes(this._childObserver);
-          Polymer.dom(this).unobserveNodes(this._contentObserver);
+          Polymer.dom(this.$.c).unobserveNodes(this._contentObserver);
         }
       });
     </script>
@@ -90,7 +92,7 @@
 
   Polymer.dom.flush();
   
-  // setTimeout(function() {
+  function test(done) {
     console.group('test dynamic');
     var d = makeNode('dynamic!');
     Polymer.dom.flush();
@@ -103,7 +105,7 @@
     Polymer.dom(content).appendChild(d);
     Polymer.dom.flush();
     Polymer.dom(d).classList.add('a');
-    Polymer.dom(Polymer.dom(d).parentNode).notifyObservers();
+    //Polymer.dom(Polymer.dom(d).parentNode).notifyObservers();
     Polymer.dom(content.$.inner).appendChild(makeNode('2'));
     Polymer.dom.flush();
     d = makeNode('-1');
@@ -118,8 +120,38 @@
     Polymer.dom(content).removeChild(Polymer.dom(content).firstChild);
     Polymer.dom(content).removeChild(Polymer.dom(content).lastChild);
     Polymer.dom.flush();
-    console.groupEnd('test dynamic');
-  // }, 1000);
+
+    var d1 = makeNode('dynamic2!');
+    Polymer.dom(content).appendChild(d1);
+
+    setTimeout(function() {
+      Polymer.dom(d1).classList.add('a');
+      Polymer.dom(d1).classList.add('b');
+      setTimeout(function() {
+        //Polymer.dom(content).notifyObservers();
+        console.groupEnd('test dynamic');
+        if (done) {
+          done();
+        }
+      });
+    });
+  }
+    
+   
+  test(function() {
+    content.$.inner.unobserve();
+    test(function() {
+      content.$.inner.observe();
+      test(function() {
+        content.$.inner.unobserve();
+        test(function() {
+          content.$.inner.observe();
+          test();  
+        });
+      });
+    });
+  });
+
   </script>
 
 </body>