diff --git a/src/ng/interpolate.js b/src/ng/interpolate.js
index b78f44a4c9c5..e0495163b512 100644
--- a/src/ng/interpolate.js
+++ b/src/ng/interpolate.js
@@ -127,12 +127,11 @@ function $InterpolateProvider() {
       var startIndex,
           endIndex,
           index = 0,
-          parts = [],
           length = text.length,
           hasInterpolation = false,
-          fn,
+          fn = null,
           exp,
-          concat = [];
+          parts = [];
 
       while(index < length) {
         if ( ((startIndex = text.indexOf(startSymbol, index)) != -1) &&
@@ -149,10 +148,9 @@ function $InterpolateProvider() {
         }
       }
 
-      if (!(length = parts.length)) {
+      if (!parts.length) {
         // we added, nothing, must have been an empty string.
         parts.push('');
-        length = 1;
       }
 
       // Concatenating expressions makes it hard to reason about whether some combination of
@@ -169,37 +167,101 @@ function $InterpolateProvider() {
       }
 
       if (!mustHaveExpression  || hasInterpolation) {
-        concat.length = length;
-        fn = function(context) {
+        var concat = new Array(parts.length),
+            expressions = {};
+
+        forEach(parts, function(value, index) {
+          if (isFunction(value)) {
+            expressions[index] = value;
+          } else {
+            concat[index] = value;
+          }
+        });
+
+        // computes all the interpolations and returns the resulting string
+        // a specific index might already be computed (thanks to the scope's dirty-checking),
+        // and so its expression shouldn't be executed a 2nd time
+        // also populates the lastValues of custom watchers for internal dirty-checking
+        var getConcatValue = function(scope, computedIndex, computedValue, lastValues) {
           try {
-            for(var i = 0, ii = length, part; i<ii; i++) {
-              if (typeof (part = parts[i]) == 'function') {
-                part = part(context);
-                if (trustedContext) {
-                  part = $sce.getTrusted(trustedContext, part);
-                } else {
-                  part = $sce.valueOf(part);
-                }
-                if (part === null || isUndefined(part)) {
-                  part = '';
-                } else if (typeof part != 'string') {
-                  part = toJson(part);
-                }
-              }
-              concat[i] = part;
-            }
+
+            forEach(expressions, function(expression, index) {
+              concat[index] = (index === computedIndex)
+                  ? computedValue
+                  : getStringValue(expression(scope));
+
+              if (lastValues) lastValues[index] = concat[index];
+            });
             return concat.join('');
-          }
-          catch(err) {
+
+          } catch(err) {
             var newErr = $interpolateMinErr('interr', "Can't interpolate: {0}\n{1}", text,
                 err.toString());
             $exceptionHandler(newErr);
           }
         };
+
+        var getStringValue = function(value) {
+          value = trustedContext
+              ? $sce.getTrusted(trustedContext, value)
+              : $sce.valueOf(value);
+
+          if (value == null) {
+            return '';
+          }
+          return isString(value) ? value : toJson(value);
+        };
+
+        fn = function(scope) {
+          return getConcatValue(scope /*, undefined, ...*/);
+        };
         fn.exp = text;
         fn.parts = parts;
-        return fn;
+
+        // watches each interpolation separately for performance
+        fn.$$beWatched = function(scope, origListener, objectEquality) {
+          var lastTextValue, lastValues = {}, watchersRm = [];
+
+          forEach(expressions, function(expression, index) {
+            watchersRm.push(
+              scope.$watch(watcherOf(expression), listenerOf(index), objectEquality));
+          });
+
+          function watcherOf(expression) {
+            return function interpolatedExprWatcher(scope) {
+              try {
+                return getStringValue(expression(scope));
+              } catch (err) {
+                var newErr = $interpolateMinErr('interr', "Can't interpolate: {0}\n{1}",
+                  text, err.toString());
+                $exceptionHandler(newErr);
+              }
+            };
+          }
+
+          function listenerOf(index) {
+            return function interpolatedExprListener(value, oldValue) {
+              // we only invoke the origListener if the current value
+              // is not equal to the last computed value
+              // ex: if in `{{a}}-{{b}}` both values change in a digest, the listener of
+              // `a` gets invoked first, we compute the string and call the origListener
+              // and don't invoke it again when the listener of `b` gets triggered
+              // (unless the value of `b` changes again since the last computation!)
+              if (value !== lastValues[index]) {
+                var textValue = getConcatValue(scope, index, value, lastValues);
+                origListener.call(this, textValue,
+                  value === oldValue ? textValue : lastTextValue, scope);
+                lastTextValue = textValue;
+              }
+            };
+          }
+
+          return function compositeWatchersRm() {
+            forEach(watchersRm, function(wRm){ wRm(); });
+          };
+        };
       }
+      return fn;
     }
 
 
@@ -239,4 +301,3 @@ function $InterpolateProvider() {
     return $interpolate;
   }];
 }
-
diff --git a/src/ng/rootScope.js b/src/ng/rootScope.js
index 233dfa3b2f60..f771bce62246 100644
--- a/src/ng/rootScope.js
+++ b/src/ng/rootScope.js
@@ -315,6 +315,9 @@ function $RootScopeProvider(){
        * @returns {function()} Returns a deregistration function for this listener.
        */
       $watch: function(watchExp, listener, objectEquality) {
+        if (watchExp.$$beWatched) {
+          return watchExp.$$beWatched(this, listener, objectEquality, watchExp);
+        }
         var scope = this,
             get = compileToFn(watchExp, 'watch'),
             array = scope.$$watchers,
diff --git a/test/ng/interpolateSpec.js b/test/ng/interpolateSpec.js
index 606123296ddc..a02201fd2c98 100644
--- a/test/ng/interpolateSpec.js
+++ b/test/ng/interpolateSpec.js
@@ -2,15 +2,14 @@
 
 describe('$interpolate', function() {
 
-  it('should return a function when there are no bindings and textOnly is undefined',
+  it('should return a function when there are no bindings and mustHaveExpression is undefined',
       inject(function($interpolate) {
     expect(typeof $interpolate('some text')).toBe('function');
   }));
 
-
-  it('should return undefined when there are no bindings and textOnly is set to true',
+  it('should return null when there are no bindings and mustHaveExpression is set to true',
       inject(function($interpolate) {
-    expect($interpolate('some text', true)).toBeUndefined();
+    expect($interpolate('some text', true)).toBeNull();
   }));
 
   it('should suppress falsy objects', inject(function($interpolate) {
@@ -70,7 +69,7 @@ describe('$interpolate', function() {
   describe('interpolating in a trusted context', function() {
     var sce;
     beforeEach(function() {
-      function log() {};
+      function log() {}
       var fakeLog = {log: log, warn: log, info: log, error: log};
       module(function($provide, $sceProvider) {
         $provide.value('$log', fakeLog);
@@ -274,4 +273,80 @@ describe('$interpolate', function() {
     }));
   });
 
+  describe('custom $$beWatched', function () {
+    it('should call the listener correctly when values change during digest',
+        inject(function ($rootScope, $interpolate) {
+      var count = 0, value;
+      $rootScope.$watch($interpolate('{{a}}-{{b}}'), function (_value) {
+        switch(++count) {
+          case 1:
+          case 2:
+            $rootScope.a++;
+            break;
+          case 3:
+          case 4:
+            $rootScope.b++;
+            break;
+          case 5:
+            value = _value;
+            break;
+        }
+      });
+      $rootScope.$apply("a=0;b=0");
+      expect(value).toBe("2-2");
+      expect(count).toBe(5);
+    }));
+
+    it('should call the listener correctly when the interpolation is watched multiple times',
+        inject(function ($rootScope, $interpolate) {
+      var interpolateFn = $interpolate('{{a}}-{{b}}'), count = 0;
+      $rootScope.$watch(interpolateFn, function(){
+        count++;
+      });
+      $rootScope.$watch(interpolateFn, function(){
+        count++;
+      });
+
+      $rootScope.$apply("a=0;b=0");
+      expect(count).toBe(2);
+
+      $rootScope.$apply("a=1;b=1");
+      expect(count).toBe(4);
+    }));
+
+    it('should call the listener only once per whole text change', inject(function ($rootScope, $interpolate) {
+      var count = 0, value;
+      $rootScope.$watch($interpolate("{{a}}-{{b}}"), function (_value){
+        count++;
+        value = _value;
+      });
+
+      $rootScope.$apply();
+      expect(count).toBe(1);
+      expect(value).toBe('-');
+
+      $rootScope.$apply('a=1;b=1');
+      expect(count).toBe(2);
+      expect(value).toBe('1-1');
+
+      // one changes
+      $rootScope.$apply('a=2');
+      expect(count).toBe(3);
+      expect(value).toBe('2-1');
+
+      $rootScope.$apply('b=2');
+      expect(count).toBe(4);
+      expect(value).toBe('2-2');
+
+      // both change
+      $rootScope.$apply('a=3;b=3');
+      expect(count).toBe(5);
+      expect(value).toBe('3-3');
+
+      // nothing changes
+      $rootScope.$apply();
+      expect(count).toBe(5);
+      expect(value).toBe('3-3');
+    }));
+  });
 });