diff --git a/src/core/instance/render-helpers/index.js b/src/core/instance/render-helpers/index.js
new file mode 100644
index 00000000000..38414a9ab53
--- /dev/null
+++ b/src/core/instance/render-helpers/index.js
@@ -0,0 +1,30 @@
+/* @flow */
+
+import { toNumber, toString, looseEqual, looseIndexOf } from 'shared/util'
+import { createTextVNode, createEmptyVNode } from 'core/vdom/vnode'
+import { renderList } from './render-list'
+import { renderSlot } from './render-slot'
+import { resolveFilter } from './resolve-filter'
+import { checkKeyCodes } from './check-keycodes'
+import { bindObjectProps } from './bind-object-props'
+import { renderStatic, markOnce } from './render-static'
+import { bindObjectListeners } from './bind-object-listeners'
+import { resolveScopedSlots } from './resolve-slots'
+
+export function installRenderHelpers (target: any) {
+  target._o = markOnce
+  target._n = toNumber
+  target._s = toString
+  target._l = renderList
+  target._t = renderSlot
+  target._q = looseEqual
+  target._i = looseIndexOf
+  target._m = renderStatic
+  target._f = resolveFilter
+  target._k = checkKeyCodes
+  target._b = bindObjectProps
+  target._v = createTextVNode
+  target._e = createEmptyVNode
+  target._u = resolveScopedSlots
+  target._g = bindObjectListeners
+}
diff --git a/src/core/instance/render-helpers/render-static.js b/src/core/instance/render-helpers/render-static.js
index 9ee977eb96b..552536fec0e 100644
--- a/src/core/instance/render-helpers/render-static.js
+++ b/src/core/instance/render-helpers/render-static.js
@@ -9,7 +9,14 @@ export function renderStatic (
   index: number,
   isInFor?: boolean
 ): VNode | Array<VNode> {
-  let tree = this._staticTrees[index]
+  // static trees can be rendered once and cached on the contructor options
+  // so every instance shares the same trees
+  let options = this.constructor.options
+  if (this.$options.staticRenderFns !== options.staticRenderFns) {
+    options = this.$options
+  }
+  const trees = options._staticTrees || (options._staticTrees = [])
+  let tree = trees[index]
   // if has already-rendered static tree and not inside v-for,
   // we can reuse the same tree by doing a shallow clone.
   if (tree && !isInFor) {
@@ -18,8 +25,8 @@ export function renderStatic (
       : cloneVNode(tree)
   }
   // otherwise, render a fresh tree.
-  tree = this._staticTrees[index] =
-    this.$options.staticRenderFns[index].call(this._renderProxy)
+  tree = trees[index] =
+    options.staticRenderFns[index].call(this._renderProxy, null, this)
   markStatic(tree, `__static__${index}`, false)
   return tree
 }
diff --git a/src/core/instance/render.js b/src/core/instance/render.js
index b492316a0df..21a21c9c754 100644
--- a/src/core/instance/render.js
+++ b/src/core/instance/render.js
@@ -3,33 +3,18 @@
 import {
   warn,
   nextTick,
-  toNumber,
-  toString,
-  looseEqual,
   emptyObject,
   handleError,
-  looseIndexOf,
   defineReactive
 } from '../util/index'
 
-import VNode, {
-  cloneVNodes,
-  createTextVNode,
-  createEmptyVNode
-} from '../vdom/vnode'
+import { createElement } from '../vdom/create-element'
+import { installRenderHelpers } from './render-helpers/index'
+import { resolveSlots } from './render-helpers/resolve-slots'
+import VNode, { cloneVNodes, createEmptyVNode } from '../vdom/vnode'
 
 import { isUpdatingChildComponent } from './lifecycle'
 
-import { createElement } from '../vdom/create-element'
-import { renderList } from './render-helpers/render-list'
-import { renderSlot } from './render-helpers/render-slot'
-import { resolveFilter } from './render-helpers/resolve-filter'
-import { checkKeyCodes } from './render-helpers/check-keycodes'
-import { bindObjectProps } from './render-helpers/bind-object-props'
-import { renderStatic, markOnce } from './render-helpers/render-static'
-import { bindObjectListeners } from './render-helpers/bind-object-listeners'
-import { resolveSlots, resolveScopedSlots } from './render-helpers/resolve-slots'
-
 export function initRender (vm: Component) {
   vm._vnode = null // the root of the child tree
   vm._staticTrees = null
@@ -65,6 +50,9 @@ export function initRender (vm: Component) {
 }
 
 export function renderMixin (Vue: Class<Component>) {
+  // install runtime convenience helpers
+  installRenderHelpers(Vue.prototype)
+
   Vue.prototype.$nextTick = function (fn: Function) {
     return nextTick(fn, this)
   }
@@ -135,23 +123,4 @@ export function renderMixin (Vue: Class<Component>) {
     vnode.parent = _parentVnode
     return vnode
   }
-
-  // internal render helpers.
-  // these are exposed on the instance prototype to reduce generated render
-  // code size.
-  Vue.prototype._o = markOnce
-  Vue.prototype._n = toNumber
-  Vue.prototype._s = toString
-  Vue.prototype._l = renderList
-  Vue.prototype._t = renderSlot
-  Vue.prototype._q = looseEqual
-  Vue.prototype._i = looseIndexOf
-  Vue.prototype._m = renderStatic
-  Vue.prototype._f = resolveFilter
-  Vue.prototype._k = checkKeyCodes
-  Vue.prototype._b = bindObjectProps
-  Vue.prototype._v = createTextVNode
-  Vue.prototype._e = createEmptyVNode
-  Vue.prototype._u = resolveScopedSlots
-  Vue.prototype._g = bindObjectListeners
 }
diff --git a/src/core/vdom/create-functional-component.js b/src/core/vdom/create-functional-component.js
index f13589370b3..74c36ea7b90 100644
--- a/src/core/vdom/create-functional-component.js
+++ b/src/core/vdom/create-functional-component.js
@@ -4,6 +4,7 @@ import VNode from './vnode'
 import { createElement } from './create-element'
 import { resolveInject } from '../instance/inject'
 import { resolveSlots } from '../instance/render-helpers/resolve-slots'
+import { installRenderHelpers } from '../instance/render-helpers/index'
 
 import {
   isDef,
@@ -12,15 +13,43 @@ import {
   validateProp
 } from '../util/index'
 
+function FunctionalRenderContext (
+  data,
+  props,
+  children,
+  parent,
+  Ctor
+) {
+  const options = Ctor.options
+  this.data = data
+  this.props = props
+  this.children = children
+  this.parent = parent
+  this.listeners = data.on || emptyObject
+  this.injections = resolveInject(options.inject, parent)
+  this.slots = () => resolveSlots(children, parent)
+  // support for compiled functional template
+  if (options._compiled) {
+    this.constructor = Ctor
+    this.$options = options
+    this._c = parent._c
+    this.$slots = this.slots()
+    this.$scopedSlots = data.scopedSlots || emptyObject
+  }
+}
+
+installRenderHelpers(FunctionalRenderContext.prototype)
+
 export function createFunctionalComponent (
   Ctor: Class<Component>,
   propsData: ?Object,
   data: VNodeData,
-  context: Component,
+  contextVm: Component,
   children: ?Array<VNode>
 ): VNode | void {
+  const options = Ctor.options
   const props = {}
-  const propOptions = Ctor.options.props
+  const propOptions = options.props
   if (isDef(propOptions)) {
     for (const key in propOptions) {
       props[key] = validateProp(key, propOptions, propsData || emptyObject)
@@ -31,20 +60,19 @@ export function createFunctionalComponent (
   }
   // ensure the createElement function in functional components
   // gets a unique context - this is necessary for correct named slot check
-  const _context = Object.create(context)
-  const h = (a, b, c, d) => createElement(_context, a, b, c, d, true)
-  const vnode = Ctor.options.render.call(null, h, {
+  const _contextVm = Object.create(contextVm)
+  const h = (a, b, c, d) => createElement(_contextVm, a, b, c, d, true)
+  const renderContext = new FunctionalRenderContext(
     data,
     props,
     children,
-    parent: context,
-    listeners: data.on || emptyObject,
-    injections: resolveInject(Ctor.options.inject, context),
-    slots: () => resolveSlots(children, context)
-  })
+    contextVm,
+    Ctor
+  )
+  const vnode = options.render.call(null, h, renderContext)
   if (vnode instanceof VNode) {
-    vnode.functionalContext = context
-    vnode.functionalOptions = Ctor.options
+    vnode.functionalContext = contextVm
+    vnode.functionalOptions = options
     if (data.slot) {
       (vnode.data || (vnode.data = {})).slot = data.slot
     }
diff --git a/test/unit/features/options/functional.spec.js b/test/unit/features/options/functional.spec.js
index 9bdff840aca..ecbd0be3c55 100644
--- a/test/unit/features/options/functional.spec.js
+++ b/test/unit/features/options/functional.spec.js
@@ -185,4 +185,79 @@ describe('Options functional', () => {
     const vnode = h('child')
     expect(vnode).toEqual(createEmptyVNode())
   })
+
+  it('should work with render fns compiled from template', done => {
+    // code generated via vue-template-es2015-compiler
+    var render = function (_h, _vm) {
+      var _c = _vm._c
+      return _c(
+        'div',
+        [
+          _c('h2', { staticClass: 'red' }, [_vm._v(_vm._s(_vm.props.msg))]),
+          _vm._t('default'),
+          _vm._t('slot2'),
+          _vm._t('scoped', null, { msg: _vm.props.msg }),
+          _vm._m(0),
+          _c('div', { staticClass: 'clickable', on: { click: _vm.parent.fn }}, [
+            _vm._v('click me')
+          ])
+        ],
+        2
+      )
+    }
+    var staticRenderFns = [
+      function (_h, _vm) {
+        var _c = _vm._c
+        return _c('div', [_vm._v('Some '), _c('span', [_vm._v('text')])])
+      }
+    ]
+
+    const child = {
+      functional: true,
+      _compiled: true,
+      render,
+      staticRenderFns
+    }
+
+    const parent = new Vue({
+      components: {
+        child
+      },
+      data: {
+        msg: 'hello'
+      },
+      template: `
+      <div>
+        <child :msg="msg">
+          <span>{{ msg }}</span>
+          <div slot="slot2">Second slot</div>
+          <template slot="scoped" slot-scope="scope">{{ scope.msg }}</template>
+        </child>
+      </div>
+      `,
+      methods: {
+        fn () {
+          this.msg = 'bye'
+        }
+      }
+    }).$mount()
+
+    function assertMarkup () {
+      expect(parent.$el.innerHTML).toBe(
+        `<div>` +
+          `<h2 class="red">${parent.msg}</h2>` +
+          `<span>${parent.msg}</span> ` +
+          `<div>Second slot</div>` +
+          parent.msg +
+          // static
+          `<div>Some <span>text</span></div>` +
+          `<div class="clickable">click me</div>` +
+        `</div>`
+      )
+    }
+
+    assertMarkup()
+    triggerEvent(parent.$el.querySelector('.clickable'), 'click')
+    waitForUpdate(assertMarkup).then(done)
+  })
 })