diff --git a/nbconvert/exporters/templateexporter.py b/nbconvert/exporters/templateexporter.py
index 019850cb3..d1d8e9fdf 100644
--- a/nbconvert/exporters/templateexporter.py
+++ b/nbconvert/exporters/templateexporter.py
@@ -16,7 +16,8 @@
 from traitlets.utils.importstring import import_item
 from ipython_genutils import py3compat
 from jinja2 import (
-    TemplateNotFound, Environment, ChoiceLoader, FileSystemLoader, BaseLoader
+    TemplateNotFound, Environment, ChoiceLoader, FileSystemLoader, BaseLoader,
+    DictLoader
 )
 
 from nbconvert import filters
@@ -57,7 +58,6 @@
         'json_dumps': json.dumps,
 }
 
-
 class ExtensionTolerantLoader(BaseLoader):
     """A template loader which optionally adds a given extension when searching.
 
@@ -140,6 +140,11 @@ def default_config(self):
             help="Name of the template file to use"
     ).tag(config=True, affects_template=True)
 
+    raw_template = Unicode('', help="raw template string").tag(affects_environment=True)
+
+    _last_template_file = ""
+    _raw_template_key = "<memory>"
+
     @observe('template_file')
     def _template_file_changed(self, change):
         new = change['new']
@@ -159,6 +164,12 @@ def _template_file_changed(self, change):
     def _template_file_default(self):
         return self.default_template
 
+    @observe('raw_template')
+    def _raw_template_changed(self, change):
+        if not change['new']:
+            self.template_file = self.default_template or self._last_template_file
+        self._invalidate_template_cache()
+
     default_template = Unicode(u'').tag(affects_template=True)
 
     template_path = List(['.']).tag(config=True, affects_environment=True)
@@ -172,10 +183,10 @@ def _template_file_default(self):
         os.path.join("..", "templates", "skeleton"),
         help="Path where the template skeleton files are located.",
     ).tag(affects_environment=True)
-    
+
     #Extension that the template files use.
     template_extension = Unicode(".tpl").tag(config=True, affects_environment=True)
-    
+
     exclude_input = Bool(False,
         help = "This allows you to exclude code cell inputs from all templates if set to True."
         ).tag(config=True)
@@ -207,7 +218,7 @@ def _template_file_default(self):
     exclude_unknown = Bool(False,
         help = "This allows you to exclude unknown cells from all templates if set to True."
         ).tag(config=True)
-    
+
     extra_loaders = List(
         help="Jinja loaders to find templates. Will be tried in order "
              "before the default FileSystem ones.",
@@ -229,7 +240,7 @@ def _raw_mimetypes_default(self):
     def __init__(self, config=None, **kw):
         """
         Public constructor
-    
+
         Parameters
         ----------
         config : config
@@ -250,10 +261,17 @@ def __init__(self, config=None, **kw):
 
     def _load_template(self):
         """Load the Jinja template object from the template file
-        
+
         This is triggered by various trait changes that would change the template.
         """
 
+        # this gives precedence to a raw_template if present
+        with self.hold_trait_notifications():
+            if self.template_file != self._raw_template_key:
+                self._last_template_file = self.template_file
+            if self.raw_template:
+                self.template_file = self._raw_template_key
+
         if not self.template_file:
             raise ValueError("No template_file specified!")
 
@@ -377,7 +395,8 @@ def _create_environment(self):
              os.path.join(here, self.template_skeleton_path)]
 
         loaders = self.extra_loaders + [
-            ExtensionTolerantLoader(FileSystemLoader(paths), self.template_extension)
+            ExtensionTolerantLoader(FileSystemLoader(paths), self.template_extension),
+            DictLoader({self._raw_template_key: self.raw_template})
         ]
         environment = Environment(
             loader=ChoiceLoader(loaders),
diff --git a/nbconvert/exporters/tests/test_templateexporter.py b/nbconvert/exporters/tests/test_templateexporter.py
index 6496b956e..0a57b6ebe 100644
--- a/nbconvert/exporters/tests/test_templateexporter.py
+++ b/nbconvert/exporters/tests/test_templateexporter.py
@@ -7,6 +7,7 @@
 
 import os
 
+from traitlets import default
 from traitlets.config import Config
 from jinja2 import DictLoader, TemplateNotFound
 from nbformat import v4
@@ -14,12 +15,19 @@
 from .base import ExportersTestsBase
 from .cheese import CheesePreprocessor
 from ..templateexporter import TemplateExporter
+from ..rst import RSTExporter
 from ..html import HTMLExporter
 from ..markdown import MarkdownExporter
 from testpath import tempdir
 
 import pytest
 
+raw_template = """{%- extends 'rst.tpl' -%}
+{%- block in_prompt -%}
+blah
+{%- endblock in_prompt -%}
+"""
+
 class TestExporter(ExportersTestsBase):
     """Contains test functions for exporter.py"""
 
@@ -119,33 +127,184 @@ def test_relative_template_file(self):
             exporter = self._make_exporter(config=config)
             assert os.path.abspath(exporter.template.filename) == template
             assert os.path.dirname(template) in [os.path.abspath(d) for d in exporter.template_path]
-    
-    def test_in_memory_template(self):
-        # Loads in an in memory template using jinja2.DictLoader
-        # creates a class that uses this template with the template_file argument
-        # converts an empty notebook using this mechanism
-        my_loader = DictLoader({'my_template': "{%- extends 'rst.tpl' -%}"})
-        
-        class MyExporter(TemplateExporter):
-            template_file = 'my_template'
-        
-        exporter = MyExporter(extra_loaders=[my_loader])
+
+
+    def test_raw_template_attr(self):
+        """
+        Verify that you can assign a in memory template string by overwriting
+        `raw_template` as simple(non-traitlet) attribute
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+
+        class AttrExporter(TemplateExporter):
+            raw_template = raw_template
+
+        exporter_attr = AttrExporter()
+        output_attr, _ = exporter_attr.from_notebook_node(nb)
+        assert "blah" in output_attr
+
+    def test_raw_template_init(self):
+        """
+        Test that template_file and raw_template traitlets play nicely together.
+        - source assigns template_file default first, then raw_template
+        - checks that the raw_template overrules template_file if set
+        - checks that once raw_template is set to '', template_file returns
+        """
         nb = v4.new_notebook()
-        out, resources = exporter.from_notebook_node(nb)
+        nb.cells.append(v4.new_code_cell("some_text"))
+
+        class AttrExporter(RSTExporter):
+
+            def __init__(self, *args, **kwargs):
+                self.raw_template = raw_template
 
+        exporter_init = AttrExporter()
+        output_init, _ = exporter_init.from_notebook_node(nb)
+        assert "blah" in output_init
+        exporter_init.raw_template = ''
+        assert exporter_init.template_file == "rst.tpl"
+        output_init, _ = exporter_init.from_notebook_node(nb)
+        assert "blah" not in output_init
+
+    def test_raw_template_dynamic_attr(self):
+        """
+        Test that template_file and raw_template traitlets play nicely together.
+        - source assigns template_file default first, then raw_template
+        - checks that the raw_template overrules template_file if set
+        - checks that once raw_template is set to '', template_file returns
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+
+        class AttrDynamicExporter(TemplateExporter):
+            @default('template_file')
+            def _template_file_default(self):
+                return "rst.tpl"
+
+            @default('raw_template')
+            def _raw_template_default(self):
+                return raw_template
+
+        exporter_attr_dynamic = AttrDynamicExporter()
+        output_attr_dynamic, _ = exporter_attr_dynamic.from_notebook_node(nb)
+        assert "blah" in output_attr_dynamic
+        exporter_attr_dynamic.raw_template = ''
+        assert exporter_attr_dynamic.template_file == "rst.tpl"
+        output_attr_dynamic, _ = exporter_attr_dynamic.from_notebook_node(nb)
+        assert "blah" not in output_attr_dynamic
+
+    def test_raw_template_dynamic_attr_reversed(self):
+        """
+        Test that template_file and raw_template traitlets play nicely together.
+        - source assigns raw_template default first, then template_file
+        - checks that the raw_template overrules template_file if set
+        - checks that once raw_template is set to '', template_file returns
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+
+        class AttrDynamicExporter(TemplateExporter):
+            @default('raw_template')
+            def _raw_template_default(self):
+                return raw_template
+
+            @default('template_file')
+            def _template_file_default(self):
+                return "rst.tpl"
+
+        exporter_attr_dynamic = AttrDynamicExporter()
+        output_attr_dynamic, _ = exporter_attr_dynamic.from_notebook_node(nb)
+        assert "blah" in output_attr_dynamic
+        exporter_attr_dynamic.raw_template = ''
+        assert exporter_attr_dynamic.template_file == "rst.tpl"
+        output_attr_dynamic, _ = exporter_attr_dynamic.from_notebook_node(nb)
+        assert "blah" not in output_attr_dynamic
+
+
+    def test_raw_template_constructor(self):
+        """
+        Test `raw_template` as a keyword argument in the exporter constructor.
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+
+        output_constructor, _ = TemplateExporter(
+            raw_template=raw_template).from_notebook_node(nb)
+        assert "blah" in output_constructor
+
+    def test_raw_template_assignment(self):
+        """
+        Test `raw_template` assigned after the fact on non-custom Exporter.
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+        exporter_assign = TemplateExporter()
+        exporter_assign.raw_template = raw_template
+        output_assign, _ = exporter_assign.from_notebook_node(nb)
+        assert "blah" in output_assign
+
+    def test_raw_template_reassignment(self):
+        """
+        Test `raw_template` reassigned after the fact on non-custom Exporter.
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+        exporter_reassign = TemplateExporter()
+        exporter_reassign.raw_template = raw_template
+        output_reassign, _ = exporter_reassign.from_notebook_node(nb)
+        assert "blah" in output_reassign
+        exporter_reassign.raw_template = raw_template.replace("blah", "baz")
+        output_reassign, _ = exporter_reassign.from_notebook_node(nb)
+        assert "baz" in output_reassign
+
+    def test_raw_template_deassignment(self):
+        """
+        Test `raw_template` does not overwrite template_file if deassigned after
+        being assigned to a non-custom Exporter.
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+        exporter_deassign = RSTExporter()
+        exporter_deassign.raw_template = raw_template
+        output_deassign, _ = exporter_deassign.from_notebook_node(nb)
+        assert "blah" in output_deassign
+        exporter_deassign.raw_template = ''
+        assert exporter_deassign.template_file == 'rst.tpl'
+        output_deassign, _ = exporter_deassign.from_notebook_node(nb)
+        assert "blah" not in output_deassign
+
+    def test_raw_template_dereassignment(self):
+        """
+        Test `raw_template` does not overwrite template_file if deassigned after
+        being assigned to a non-custom Exporter.
+        """
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+        exporter_dereassign = RSTExporter()
+        exporter_dereassign.raw_template = raw_template
+        output_dereassign, _ = exporter_dereassign.from_notebook_node(nb)
+        assert "blah" in output_dereassign
+        exporter_dereassign.raw_template = raw_template.replace("blah", "baz")
+        output_dereassign, _ = exporter_dereassign.from_notebook_node(nb)
+        assert "baz" in output_dereassign
+        exporter_dereassign.raw_template = ''
+        assert exporter_dereassign.template_file == 'rst.tpl'
+        output_dereassign, _ = exporter_dereassign.from_notebook_node(nb)
+        assert "blah" not in output_dereassign
 
     def test_fail_to_find_template_file(self):
         # Create exporter with invalid template file, check that it doesn't
         # exist in the environment, try to convert empty notebook. Failure is
         # expected due to nonexistant template file.
-        
+
         template = 'does_not_exist.tpl'
         exporter = TemplateExporter(template_file=template)
         assert template not in exporter.environment.list_templates(extensions=['tpl'])
         nb = v4.new_notebook()
         with pytest.raises(TemplateNotFound):
             out, resources = exporter.from_notebook_node(nb)
-        
+
     def test_exclude_code_cell(self):
         no_io = {
             "TemplateExporter":{
@@ -161,10 +320,10 @@ def test_exclude_code_cell(self):
         exporter_no_io = TemplateExporter(config=c_no_io)
         exporter_no_io.template_file = 'markdown'
         nb_no_io, resources_no_io = exporter_no_io.from_filename(self._get_notebook())
-        
+
         assert not resources_no_io['global_content_filter']['include_input']
         assert not resources_no_io['global_content_filter']['include_output']
-        
+
         no_code = {
             "TemplateExporter":{
                 "exclude_output": False,
@@ -183,7 +342,7 @@ def test_exclude_code_cell(self):
         assert not resources_no_code['global_content_filter']['include_code']
         assert nb_no_io == nb_no_code
 
-        
+
     def test_exclude_input_prompt(self):
         no_input_prompt = {
             "TemplateExporter":{
@@ -198,10 +357,10 @@ def test_exclude_input_prompt(self):
         c_no_input_prompt = Config(no_input_prompt)
         exporter_no_input_prompt = MarkdownExporter(config=c_no_input_prompt)
         nb_no_input_prompt, resources_no_input_prompt = exporter_no_input_prompt.from_filename(self._get_notebook())
-        
+
         assert not resources_no_input_prompt['global_content_filter']['include_input_prompt']
         assert "# In[" not in nb_no_input_prompt
-        
+
     def test_exclude_markdown(self):
 
         no_md= {
@@ -219,10 +378,10 @@ def test_exclude_markdown(self):
         exporter_no_md = TemplateExporter(config=c_no_md)
         exporter_no_md.template_file = 'python'
         nb_no_md, resources_no_md = exporter_no_md.from_filename(self._get_notebook())
-        
+
         assert not resources_no_md['global_content_filter']['include_markdown']
         assert "First import NumPy and Matplotlib" not in nb_no_md
-    
+
     def test_exclude_output_prompt(self):
         no_output_prompt = {
             "TemplateExporter":{