diff --git a/src/Angular.js b/src/Angular.js
index 3f272ec2..17ede3aa 100644
--- a/src/Angular.js
+++ b/src/Angular.js
@@ -655,28 +655,31 @@ function equals(o1, o2) {
   if (o1 === null || o2 === null) return false;
   if (o1 !== o1 && o2 !== o2) return true; // NaN === NaN
   var t1 = typeof o1, t2 = typeof o2, length, key, keySet;
-  if (t1 == t2 && t1 == 'object') {
-    if (isArray(o1)) {
-      if ((length = o1.length) == o2.length) {
-        for(key=0; key<length; key++) {
-          if (!equals(o1[key], o2[key])) return false;
+  if (t1 == t2) {
+    if (t1 == 'object') {
+      if (isArray(o1)) {
+        if ((length = o1.length) == o2.length) {
+          for(key=0; key<length; key++) {
+            if (!equals(o1[key], o2[key])) return false;
+          }
+          return true;
+        }
+      } else {
+        if (isScope(o1) || isScope(o2) || isWindow(o1) || isWindow(o2)) return false;
+        keySet = {};
+        for(key in o1) {
+          if (key.charAt(0) !== '$' && !isFunction(o1[key]) && !equals(o1[key], o2[key])) {
+            return false;
+          }
+          keySet[key] = true;
+        }
+        for(key in o2) {
+          if (!keySet[key] && key.charAt(0) !== '$' && !isFunction(o2[key])) return false;
         }
         return true;
       }
-    } else {
-      if (isScope(o1) || isScope(o2) || isWindow(o1) || isWindow(o2)) return false;
-      keySet = {};
-      for(key in o1) {
-        if (key.charAt(0) !== '$' && !isFunction(o1[key]) && !equals(o1[key], o2[key])) {
-          return false;
-        }
-        keySet[key] = true;
-      }
-      for(key in o2) {
-        if (!keySet[key] && key.charAt(0) !== '$' && !isFunction(o2[key])) return false;
-      }
-      return true;
     }
+    if (t1 == 'function' && o1.$unboundFn) return o1.$unboundFn === o2.$unboundFn;
   }
   return false;
 }
diff --git a/test/service/scopeSpec.js b/test/service/scopeSpec.js
index 30805684..b1b870f4 100644
--- a/test/service/scopeSpec.js
+++ b/test/service/scopeSpec.js
@@ -248,6 +248,22 @@ describe('Scope', function() {
     }));
 
 
+    it('should watch functions', function() {
+      module(provideLog);
+      inject(function($rootScope, log) {
+        $rootScope.fn = function() {return 'a'};
+        $rootScope.$watch('fn', function(scope, fn) {
+          log(fn());
+        });
+        $rootScope.$digest();
+        expect(log).toEqual('a');
+        $rootScope.fn = function() {return 'b'};
+        $rootScope.$digest();
+        expect(log).toEqual('a; b');
+      })
+    });
+
+
     it('should prevent $digest recursion', inject(function($rootScope) {
       var callCount = 0;
       $rootScope.$watch('name', function() {