diff --git a/source/debug.test b/source/debug.test
new file mode 100755
index 0000000000..7f202af7ab
Binary files /dev/null and b/source/debug.test differ
diff --git a/source/service.go b/source/service.go
index ec9d8575a1..cfb3726ddb 100644
--- a/source/service.go
+++ b/source/service.go
@@ -25,6 +25,7 @@ import (
 	log "github.com/Sirupsen/logrus"
 
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/labels"
 	"k8s.io/client-go/kubernetes"
 	"k8s.io/client-go/pkg/api/v1"
 
@@ -114,6 +115,30 @@ func (sc *serviceSource) Endpoints() ([]*endpoint.Endpoint, error) {
 	return endpoints, nil
 }
 
+func (sc *serviceSource) extractHeadlessEndpoint(svc *v1.Service, hostname string) []*endpoint.Endpoint {
+
+	var endpoints []*endpoint.Endpoint
+
+	pods, err := sc.client.CoreV1().Pods(svc.Namespace).List(metav1.ListOptions{LabelSelector: labels.Set(svc.Spec.Selector).AsSelectorPreValidated().String()})
+
+	if err != nil {
+		log.Errorf("List Pods of service[%s] error:%v", svc.GetName(), err)
+		return endpoints
+	}
+
+	for _, v := range pods.Items {
+		headlessDomain := v.Spec.Hostname + "." + hostname
+		log.Debugf("Generating matching endpoint %s with HostIP %s", headlessDomain, v.Status.HostIP)
+		// To reduce traffice on the DNS API only add record for running Pods. Good Idea?
+		if v.Status.Phase == v1.PodRunning {
+			endpoints = append(endpoints, endpoint.NewEndpoint(headlessDomain, v.Status.HostIP, endpoint.RecordTypeA))
+		} else {
+			log.Debugf("Pod %s is not in running phase", v.Spec.Hostname)
+		}
+	}
+
+	return endpoints
+}
 func (sc *serviceSource) endpointsFromTemplate(svc *v1.Service) ([]*endpoint.Endpoint, error) {
 	var endpoints []*endpoint.Endpoint
 
@@ -159,6 +184,10 @@ func (sc *serviceSource) generateEndpoints(svc *v1.Service, hostname string) []*
 		if sc.publishInternal {
 			endpoints = append(endpoints, extractServiceIps(svc, hostname)...)
 		}
+		if svc.Spec.ClusterIP == v1.ClusterIPNone {
+			endpoints = append(endpoints, sc.extractHeadlessEndpoint(svc, hostname)...)
+		}
+
 	}
 
 	return endpoints
diff --git a/source/service_test.go b/source/service_test.go
index f4ef658782..365e16319a 100644
--- a/source/service_test.go
+++ b/source/service_test.go
@@ -674,6 +674,145 @@ func TestClusterIpServices(t *testing.T) {
 	}
 }
 
+// TestHeadlessServices tests that headless services generate the correct endpoints.
+func TestHeadlessServices(t *testing.T) {
+	for _, tc := range []struct {
+		title           string
+		targetNamespace string
+		svcNamespace    string
+		svcName         string
+		svcType         v1.ServiceType
+		compatibility   string
+		fqdnTemplate    string
+		labels          map[string]string
+		annotations     map[string]string
+		clusterIP       string
+		hostIP          string
+		selector        map[string]string
+		lbs             []string
+		hostnames       []string
+		phases          []v1.PodPhase
+		expected        []*endpoint.Endpoint
+		expectError     bool
+	}{
+		{
+			"annotated Headless services return endpoints for each selected Pod",
+			"",
+			"testing",
+			"foo",
+			v1.ServiceTypeClusterIP,
+			"",
+			"",
+			map[string]string{"component": "foo"},
+			map[string]string{
+				hostnameAnnotationKey: "service.example.org",
+			},
+			v1.ClusterIPNone,
+			"1.1.1.1",
+			map[string]string{
+				"component": "foo",
+			},
+			[]string{},
+			[]string{"foo-0", "foo-1"},
+			[]v1.PodPhase{v1.PodRunning, v1.PodRunning},
+			[]*endpoint.Endpoint{
+				{DNSName: "foo-0.service.example.org", Target: "1.1.1.1"},
+				{DNSName: "foo-1.service.example.org", Target: "1.1.1.1"},
+			},
+			false,
+		},
+		{
+			"annotated Headless services return endpoints for each selected Pod, which are in running state",
+			"",
+			"testing",
+			"foo",
+			v1.ServiceTypeClusterIP,
+			"",
+			"",
+			map[string]string{"component": "foo"},
+			map[string]string{
+				hostnameAnnotationKey: "service.example.org",
+			},
+			v1.ClusterIPNone,
+			"1.1.1.1",
+			map[string]string{
+				"component": "foo",
+			},
+			[]string{},
+			[]string{"foo-0", "foo-1"},
+			[]v1.PodPhase{v1.PodRunning, v1.PodFailed},
+			[]*endpoint.Endpoint{
+				{DNSName: "foo-0.service.example.org", Target: "1.1.1.1"},
+			},
+			false,
+		},
+	} {
+		t.Run(tc.title, func(t *testing.T) {
+			// Create a Kubernetes testing client
+			kubernetes := fake.NewSimpleClientset()
+
+			service := &v1.Service{
+				Spec: v1.ServiceSpec{
+					Type:      tc.svcType,
+					ClusterIP: tc.clusterIP,
+					Selector:  tc.selector,
+				},
+				ObjectMeta: metav1.ObjectMeta{
+					Namespace:   tc.svcNamespace,
+					Name:        tc.svcName,
+					Labels:      tc.labels,
+					Annotations: tc.annotations,
+				},
+				Status: v1.ServiceStatus{},
+			}
+			_, err := kubernetes.CoreV1().Services(service.Namespace).Create(service)
+			require.NoError(t, err)
+
+			for i, hostname := range tc.hostnames {
+				pod := &v1.Pod{
+					Spec: v1.PodSpec{
+						Containers: []v1.Container{},
+						Hostname:   hostname,
+					},
+					ObjectMeta: metav1.ObjectMeta{
+						Namespace:   tc.svcNamespace,
+						Name:        hostname,
+						Labels:      tc.labels,
+						Annotations: tc.annotations,
+					},
+					Status: v1.PodStatus{
+						HostIP: tc.hostIP,
+						Phase:  tc.phases[i],
+					},
+				}
+
+				_, err = kubernetes.CoreV1().Pods(tc.svcNamespace).Create(pod)
+				require.NoError(t, err)
+			}
+
+			// Create our object under test and get the endpoints.
+			client, _ := NewServiceSource(
+				kubernetes,
+				tc.targetNamespace,
+				tc.fqdnTemplate,
+				tc.compatibility,
+				true,
+			)
+			require.NoError(t, err)
+
+			endpoints, err := client.Endpoints()
+			if tc.expectError {
+				require.Error(t, err)
+			} else {
+				require.NoError(t, err)
+			}
+
+			// Validate returned endpoints against desired endpoints.
+			validateEndpoints(t, endpoints, tc.expected)
+		})
+	}
+}
+
 func BenchmarkServiceEndpoints(b *testing.B) {
 	kubernetes := fake.NewSimpleClientset()