diff --git a/src/ng/location.js b/src/ng/location.js
index 7891d62f5..1efe5a8b4 100644
--- a/src/ng/location.js
+++ b/src/ng/location.js
@@ -127,21 +127,26 @@ function LocationHtml5Url(appBase, basePrefix) {
     this.$$absUrl = appBaseNoFile + this.$$url.substr(1); // first char is always '/'
   };
 
-  this.$$rewrite = function(url) {
+  this.$$parseLinkUrl = function(url, relHref) {
     var appUrl, prevAppUrl;
+    var rewrittenUrl;
 
     if ( (appUrl = beginsWith(appBase, url)) !== undefined ) {
       prevAppUrl = appUrl;
       if ( (appUrl = beginsWith(basePrefix, appUrl)) !== undefined ) {
-        return appBaseNoFile + (beginsWith('/', appUrl) || appUrl);
+        rewrittenUrl = appBaseNoFile + (beginsWith('/', appUrl) || appUrl);
       } else {
-        return appBase + prevAppUrl;
+        rewrittenUrl = appBase + prevAppUrl;
       }
     } else if ( (appUrl = beginsWith(appBaseNoFile, url)) !== undefined ) {
-      return appBaseNoFile + appUrl;
+      rewrittenUrl = appBaseNoFile + appUrl;
     } else if (appBaseNoFile == url + '/') {
-      return appBaseNoFile;
+      rewrittenUrl = appBaseNoFile;
     }
+    if (rewrittenUrl) {
+      this.$$parse(rewrittenUrl);
+    }
+    return !!rewrittenUrl;
   };
 }
 
@@ -231,10 +236,12 @@ function LocationHashbangUrl(appBase, hashPrefix) {
     this.$$absUrl = appBase + (this.$$url ? hashPrefix + this.$$url : '');
   };
 
-  this.$$rewrite = function(url) {
+  this.$$parseLinkUrl = function(url, relHref) {
     if(stripHash(appBase) == stripHash(url)) {
-      return url;
+      this.$$parse(url);
+      return true;
     }
+    return false;
   };
 }
 
@@ -254,16 +261,21 @@ function LocationHashbangInHtml5Url(appBase, hashPrefix) {
 
   var appBaseNoFile = stripFile(appBase);
 
-  this.$$rewrite = function(url) {
+  this.$$parseLinkUrl = function(url, relHref) {
+    var rewrittenUrl;
     var appUrl;
 
     if ( appBase == stripHash(url) ) {
-      return url;
+      rewrittenUrl = url;
     } else if ( (appUrl = beginsWith(appBaseNoFile, url)) ) {
-      return appBase + hashPrefix + appUrl;
+      rewrittenUrl = appBase + hashPrefix + appUrl;
     } else if ( appBaseNoFile === url + '/') {
-      return appBaseNoFile;
+      rewrittenUrl = appBaseNoFile;
     }
+    if (rewrittenUrl) {
+      this.$$parse(rewrittenUrl);
+    }
+    return !!rewrittenUrl;
   };
 
   this.$$compose = function() {
@@ -636,7 +648,7 @@ function $LocationProvider(){
       LocationMode = LocationHashbangUrl;
     }
     $location = new LocationMode(appBase, '#' + hashPrefix);
-    $location.$$parse($location.$$rewrite(initialUrl));
+    $location.$$parseLinkUrl(initialUrl, initialUrl);
 
     var IGNORE_URI_REGEXP = /^\s*(javascript|mailto):/i;
 
@@ -655,6 +667,9 @@ function $LocationProvider(){
       }
 
       var absHref = elm.prop('href');
+      // get the actual href attribute - see
+      // http://msdn.microsoft.com/en-us/library/ie/dd347148(v=vs.85).aspx
+      var relHref = elm.attr('href') || elm.attr('xlink:href');
 
       if (isObject(absHref) && absHref.toString() === '[object SVGAnimatedString]') {
         // SVGAnimatedString.animVal should be identical to SVGAnimatedString.baseVal, unless during
@@ -665,50 +680,15 @@ function $LocationProvider(){
       // Ignore when url is started with javascript: or mailto:
       if (IGNORE_URI_REGEXP.test(absHref)) return;
 
-      // Make relative links work in HTML5 mode for legacy browsers (or at least IE8 & 9)
-      // The href should be a regular url e.g. /link/somewhere or link/somewhere or ../somewhere or
-      // somewhere#anchor or http://example.com/somewhere
-      if (LocationMode === LocationHashbangInHtml5Url) {
-        // get the actual href attribute - see
-        // http://msdn.microsoft.com/en-us/library/ie/dd347148(v=vs.85).aspx
-        var href = elm.attr('href') || elm.attr('xlink:href');
-
-        if (href && href.indexOf('://') < 0) {         // Ignore absolute URLs
-          var prefix = '#' + hashPrefix;
-          if (href[0] == '/') {
-            // absolute path - replace old path
-            absHref = appBase + prefix + href;
-          } else if (href[0] == '#') {
-            // local anchor
-            absHref = appBase + prefix + ($location.path() || '/') + href;
-          } else {
-            // relative path - join with current path
-            var stack = $location.path().split("/"),
-              parts = href.split("/");
-            if (stack.length === 2 && !stack[1]) stack.length = 1;
-            for (var i=0; i<parts.length; i++) {
-              if (parts[i] == ".")
-                continue;
-              else if (parts[i] == "..")
-                stack.pop();
-              else if (parts[i].length)
-                stack.push(parts[i]);
-            }
-            absHref = appBase + prefix + stack.join('/');
-          }
-        }
-      }
-
-      var rewrittenUrl = $location.$$rewrite(absHref);
-
-      if (absHref && !elm.attr('target') && rewrittenUrl && !event.isDefaultPrevented()) {
-        event.preventDefault();
-        if (rewrittenUrl != $browser.url()) {
+      if (absHref && !elm.attr('target') && !event.isDefaultPrevented()) {
+        if ($location.$$parseLinkUrl(absHref, relHref)) {
+          event.preventDefault();
           // update location manually
-          $location.$$parse(rewrittenUrl);
-          $rootScope.$apply();
-          // hack to work around FF6 bug 684208 when scenario runner clicks on links
-          window.angular['ff-684208-preventDefault'] = true;
+          if ($location.absUrl() != $browser.url()) {
+            $rootScope.$apply();
+            // hack to work around FF6 bug 684208 when scenario runner clicks on links
+            window.angular['ff-684208-preventDefault'] = true;
+          }
         }
       }
     });
diff --git a/test/ng/locationSpec.js b/test/ng/locationSpec.js
index baf3901cc..ae95941f7 100644
--- a/test/ng/locationSpec.js
+++ b/test/ng/locationSpec.js
@@ -858,12 +858,12 @@ describe('$location', function() {
       module(function($provide, $locationProvider) {
         attrs = attrs ? ' ' + attrs + ' ' : '';
 
-        // fake the base behavior
         if (typeof linkHref === 'string') {
           if (!relLink) {
             if (linkHref[0] == '/') {
               linkHref = 'http://host.com' + linkHref;
             } else if(!linkHref.match(/:\/\//)) {
+              // fake the behavior of <base> tag
               linkHref = 'http://host.com/base/' + linkHref;
             }
           }
@@ -888,8 +888,8 @@ describe('$location', function() {
     }
 
     function initBrowser() {
-      return function($browser){
-        $browser.url('http://host.com/base');
+      return function($browser, $document){
+        $browser.url('http://host.com/base/index.html');
         $browser.$$baseHref = '/base/index.html';
       };
     }
@@ -1003,12 +1003,14 @@ describe('$location', function() {
 
 
     it('should produce relative paths correctly when $location.path() is "/" when history enabled on old browser', function() {
-      configureService({linkHref: 'partial1', html5Mode: true, supportHist: false, relLink: true});
+      configureService({linkHref: 'partial1', html5Mode: true, supportHist: false});
       inject(
         initBrowser(),
         initLocation(),
-        function($browser, $location) {
-          $location.path('/');
+        function($browser, $location, $rootScope) {
+          $rootScope.$apply(function() {
+            $location.path('/');
+          });
           browserTrigger(link, 'click');
           expectRewriteTo($browser, 'http://host.com/base/index.html#!/partial1');
         }
@@ -1203,52 +1205,22 @@ describe('$location', function() {
       );
     });
 
-
-    it('should rewrite relative links relative to current path when history disabled', function() {
-      configureService({linkHref: 'link', html5Mode: true, supportHist: false, relLink: true});
-      inject(
-        initBrowser(),
-        initLocation(),
-        function($browser, $location) {
-          $location.path('/some');
-          browserTrigger(link, 'click');
-          expectRewriteTo($browser, 'http://host.com/base/index.html#!/some/link');
-        }
-      );
-    });
-
-
-    it('should replace current path when link begins with "/" and history disabled', function() {
-      configureService({linkHref: '/link', html5Mode: true, supportHist: false, relLink: true});
-      inject(
-        initBrowser(),
-        initLocation(),
-        function($browser, $location) {
-          $location.path('/some');
-          browserTrigger(link, 'click');
-          expectRewriteTo($browser, 'http://host.com/base/index.html#!/link');
-        }
-      );
-    });
-
-
     it('should replace current hash fragment when link begins with "#" history disabled', function() {
-      configureService({linkHref: '#link', html5Mode: true, supportHist: false, relLink: true});
+      configureService({linkHref: '#link', html5Mode: true, supportHist: false, relLink: false});
       inject(
         initBrowser(),
         initLocation(),
-        function($browser, $location) {
-          // Initialize browser URL
-          $location.path('/some');
-          $location.hash('foo');
+        function($browser, $location, $rootScope) {
+          $rootScope.$apply(function() {
+            $location.hash('foo');
+          });
           browserTrigger(link, 'click');
           expect($location.hash()).toBe('link');
-          expectRewriteTo($browser, 'http://host.com/base/index.html#!/some#link');
+          expectRewriteTo($browser, 'http://host.com/base/index.html#!#link');
         }
       );
     });
 
-
     // don't run next tests on IE<9, as browserTrigger does not simulate pressed keys
     if (!msie || msie >= 9) {
 
@@ -1360,7 +1332,8 @@ describe('$location', function() {
 
         var event = {
           target: jqLite(window.document.body).find('a')[0],
-          preventDefault: jasmine.createSpy('preventDefault')
+          preventDefault: jasmine.createSpy('preventDefault'),
+          isDefaultPrevented: jasmine.createSpy().andReturn(false)
         };
 
 
@@ -1390,7 +1363,8 @@ describe('$location', function() {
 
         var event = {
           target: jqLite(window.document.body).find('a')[0],
-          preventDefault: jasmine.createSpy('preventDefault')
+          preventDefault: jasmine.createSpy('preventDefault'),
+          isDefaultPrevented: jasmine.createSpy().andReturn(false)
         };
 
 
@@ -1555,8 +1529,12 @@ describe('$location', function() {
 
 
     it('should listen on click events on href and prevent browser default in html5 mode', function() {
-      module(function($locationProvider) {
+      module(function($locationProvider, $provide) {
         $locationProvider.html5Mode(true);
+        $provide.decorator('$browser', function($delegate) {
+          $delegate.$$baseHref = '/';
+          return $delegate;
+        });
         return function($rootElement, $compile, $rootScope) {
           $rootElement.html('<a href="http://server/somePath">link</a>');
           $compile($rootElement)($rootScope);
@@ -1613,6 +1591,13 @@ describe('$location', function() {
     );
   });
 
+  function parseLinkAndReturn(location, url, relHref) {
+    if (location.$$parseLinkUrl(url, relHref)) {
+      return location.absUrl();
+    }
+    return undefined;
+  }
+
   describe('LocationHtml5Url', function() {
     var location, locationIndex;
 
@@ -1622,13 +1607,14 @@ describe('$location', function() {
     });
 
     it('should rewrite URL', function() {
-      expect(location.$$rewrite('http://other')).toEqual(undefined);
-      expect(location.$$rewrite('http://server/pre')).toEqual('http://server/pre/');
-      expect(location.$$rewrite('http://server/pre/')).toEqual('http://server/pre/');
-      expect(location.$$rewrite('http://server/pre/otherPath')).toEqual('http://server/pre/otherPath');
-      expect(locationIndex.$$rewrite('http://server/pre')).toEqual('http://server/pre/');
-      expect(locationIndex.$$rewrite('http://server/pre/')).toEqual('http://server/pre/');
-      expect(locationIndex.$$rewrite('http://server/pre/otherPath')).toEqual('http://server/pre/otherPath');
+      expect(parseLinkAndReturn(location, 'http://other')).toEqual(undefined);
+      expect(parseLinkAndReturn(location, 'http://server/pre')).toEqual('http://server/pre/');
+      expect(parseLinkAndReturn(location, 'http://server/pre/')).toEqual('http://server/pre/');
+      expect(parseLinkAndReturn(location, 'http://server/pre/otherPath')).toEqual('http://server/pre/otherPath');
+
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre')).toEqual('http://server/pre/');
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre/')).toEqual('http://server/pre/');
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre/otherPath')).toEqual('http://server/pre/otherPath');
     });
   });
 
@@ -1636,14 +1622,21 @@ describe('$location', function() {
   describe('LocationHashbangUrl', function() {
     var location;
 
+    function parseLinkAndReturn(location, url, relHref) {
+      if (location.$$parseLinkUrl(url, relHref)) {
+        return location.absUrl();
+      }
+      return undefined;
+    }
+
     it('should rewrite URL', function() {
       /* jshint scripturl: true */
       location = new LocationHashbangUrl('http://server/pre/', '#');
 
-      expect(location.$$rewrite('http://other')).toEqual(undefined);
-      expect(location.$$rewrite('http://server/pre/')).toEqual('http://server/pre/');
-      expect(location.$$rewrite('http://server/pre/#otherPath')).toEqual('http://server/pre/#otherPath');
-      expect(location.$$rewrite('javascript:void(0)')).toEqual(undefined);
+      expect(parseLinkAndReturn(location, 'http://other')).toEqual(undefined);
+      expect(parseLinkAndReturn(location, 'http://server/pre/')).toEqual('http://server/pre/');
+      expect(parseLinkAndReturn(location, 'http://server/pre/#otherPath')).toEqual('http://server/pre/#/otherPath');
+      expect(parseLinkAndReturn(location, 'javascript:void(0)')).toEqual(undefined);
     });
 
     it("should not set hash if one was not originally specified", function() {
@@ -1693,13 +1686,14 @@ describe('$location', function() {
     });
 
     it('should rewrite URL', function() {
-      expect(location.$$rewrite('http://other')).toEqual(undefined);
-      expect(location.$$rewrite('http://server/pre')).toEqual('http://server/pre/');
-      expect(location.$$rewrite('http://server/pre/')).toEqual('http://server/pre/');
-      expect(location.$$rewrite('http://server/pre/otherPath')).toEqual('http://server/pre/#!otherPath');
-      expect(locationIndex.$$rewrite('http://server/pre')).toEqual('http://server/pre/');
-      expect(locationIndex.$$rewrite('http://server/pre/')).toEqual(undefined);
-      expect(locationIndex.$$rewrite('http://server/pre/otherPath')).toEqual('http://server/pre/index.html#!otherPath');
+      expect(parseLinkAndReturn(location, 'http://other')).toEqual(undefined);
+      expect(parseLinkAndReturn(location, 'http://server/pre')).toEqual('http://server/pre/#!');
+      expect(parseLinkAndReturn(location, 'http://server/pre/')).toEqual('http://server/pre/#!');
+      expect(parseLinkAndReturn(location, 'http://server/pre/otherPath')).toEqual('http://server/pre/#!/otherPath');
+
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre')).toEqual('http://server/pre/index.html#!');
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre/')).toEqual(undefined);
+      expect(parseLinkAndReturn(locationIndex, 'http://server/pre/otherPath')).toEqual('http://server/pre/index.html#!/otherPath');
     });
   });
 });