diff --git a/hystrix-core/src/main/java/com/netflix/hystrix/HystrixCommand.java b/hystrix-core/src/main/java/com/netflix/hystrix/HystrixCommand.java
index 27430df17..251fdcfd8 100755
--- a/hystrix-core/src/main/java/com/netflix/hystrix/HystrixCommand.java
+++ b/hystrix-core/src/main/java/com/netflix/hystrix/HystrixCommand.java
@@ -853,7 +853,7 @@ public Observable<R> call(Throwable e) {
             // don't waste overhead if it's the 'immediate' scheduler
             // otherwise we'll 'observeOn' and wrap with the HystrixContextScheduler
             // to copy state across threads (if threads are involved)
-            o = o.observeOn(new HystrixContextScheduler(observeOn));
+            o = o.observeOn(new HystrixContextScheduler(concurrencyStrategy, observeOn));
         }
 
         o = o.finallyDo(new Action0() {
diff --git a/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextFunc2.java b/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextFunc2.java
index 0025c134c..4fffafe4d 100644
--- a/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextFunc2.java
+++ b/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextFunc2.java
@@ -15,6 +15,9 @@
  */
 package com.netflix.hystrix.strategy.concurrency;
 
+import java.util.concurrent.Callable;
+import java.util.concurrent.atomic.AtomicReference;
+
 import rx.Scheduler;
 import rx.Subscription;
 import rx.util.functions.Func2;
@@ -31,23 +34,53 @@ public class HystrixContextFunc2<T> implements Func2<Scheduler, T, Subscription>
 
     private final Func2<? super Scheduler, ? super T, ? extends Subscription> actual;
     private final HystrixRequestContext parentThreadState;
+    private final Callable<Subscription> c;
+
+    /*
+     * This is a workaround to needing to use Callable<Subscription> but
+     * needing to pass `Scheduler t1, T t2` into it after construction.
+     * 
+     * Think of it like sticking t1 and t2 on the stack and then calling the function
+     * that uses them.
+     * 
+     * This should all be thread-safe without issues despite multi-step execution
+     * because this Func2 is only ever executed once by Hystrix and construction will always
+     * precede `call` being invoked once. 
+     * 
+     */
+    private final AtomicReference<Scheduler> t1Holder = new AtomicReference<Scheduler>();
+    private final AtomicReference<T> t2Holder = new AtomicReference<T>();
 
-    public HystrixContextFunc2(Func2<? super Scheduler, ? super T, ? extends Subscription> action) {
+    public HystrixContextFunc2(final HystrixConcurrencyStrategy concurrencyStrategy, Func2<? super Scheduler, ? super T, ? extends Subscription> action) {
         this.actual = action;
         this.parentThreadState = HystrixRequestContext.getContextForCurrentThread();
+
+        this.c = concurrencyStrategy.wrapCallable(new Callable<Subscription>() {
+
+            @Override
+            public Subscription call() throws Exception {
+                HystrixRequestContext existingState = HystrixRequestContext.getContextForCurrentThread();
+                try {
+                    // set the state of this thread to that of its parent
+                    HystrixRequestContext.setContextOnCurrentThread(parentThreadState);
+                    // execute actual Func2 with the state of the parent
+                    return actual.call(t1Holder.get(), t2Holder.get());
+                } finally {
+                    // restore this thread back to its original state
+                    HystrixRequestContext.setContextOnCurrentThread(existingState);
+                }
+            }
+        });
     }
 
     @Override
     public Subscription call(Scheduler t1, T t2) {
-        HystrixRequestContext existingState = HystrixRequestContext.getContextForCurrentThread();
         try {
-            // set the state of this thread to that of its parent
-            HystrixRequestContext.setContextOnCurrentThread(parentThreadState);
-            // execute actual Func2 with the state of the parent
-            return actual.call(t1, t2);
-        } finally {
-            // restore this thread back to its original state
-            HystrixRequestContext.setContextOnCurrentThread(existingState);
+            this.t1Holder.set(t1);
+            this.t2Holder.set(t2);
+            return c.call();
+        } catch (Exception e) {
+            throw new RuntimeException("Failed executing wrapped Func2", e);
         }
     }
 
diff --git a/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextScheduler.java b/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextScheduler.java
index 0fa22092c..aa03fc1bb 100644
--- a/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextScheduler.java
+++ b/hystrix-core/src/main/java/com/netflix/hystrix/strategy/concurrency/HystrixContextScheduler.java
@@ -15,32 +15,36 @@
  */
 package com.netflix.hystrix.strategy.concurrency;
 
+import java.util.concurrent.Callable;
 import java.util.concurrent.TimeUnit;
 
 import rx.Scheduler;
 import rx.Subscription;
+import rx.subscriptions.MultipleAssignmentSubscription;
 import rx.util.functions.Func2;
 
 /**
- * Wrap a {@link Scheduler} so that scheduled actions are wrapped with {@link HystrixContextFunc2} so that 
+ * Wrap a {@link Scheduler} so that scheduled actions are wrapped with {@link HystrixContextFunc2} so that
  * the {@link HystrixRequestContext} is properly copied across threads (if they are used by the {@link Scheduler}).
  */
 public class HystrixContextScheduler extends Scheduler {
 
+    private final HystrixConcurrencyStrategy concurrencyStrategy;
     private final Scheduler actualScheduler;
 
-    public HystrixContextScheduler(Scheduler scheduler) {
+    public HystrixContextScheduler(HystrixConcurrencyStrategy concurrencyStrategy, Scheduler scheduler) {
         this.actualScheduler = scheduler;
+        this.concurrencyStrategy = concurrencyStrategy;
     }
 
     @Override
-    public <T> Subscription schedule(T state, Func2<? super Scheduler, ? super T, ? extends Subscription> action) {
-        return actualScheduler.schedule(state, new HystrixContextFunc2<T>(action));
+    public <T> Subscription schedule(final T state, final Func2<? super Scheduler, ? super T, ? extends Subscription> action) {
+        return actualScheduler.schedule(state, new HystrixContextFunc2<T>(concurrencyStrategy, action));
     }
 
     @Override
     public <T> Subscription schedule(T state, Func2<? super Scheduler, ? super T, ? extends Subscription> action, long delayTime, TimeUnit unit) {
-        return actualScheduler.schedule(state, new HystrixContextFunc2<T>(action), delayTime, unit);
+        return actualScheduler.schedule(state, new HystrixContextFunc2<T>(concurrencyStrategy, action), delayTime, unit);
     }
 
 }