diff --git a/packages/html/parse.js b/packages/html/parse.js
index 1c27e6f898..dd8f872f2d 100644
--- a/packages/html/parse.js
+++ b/packages/html/parse.js
@@ -210,9 +210,8 @@ getRCData = function (scanner, tagName, shouldStopFunc) {
     } else if (token.t === 'CharRef') {
       items.push(convertCharRef(token));
     } else if (token.t === 'Special') {
-      scanner.fatal("NOT IMPLEMENTED: Can't have template tags in " + tagName);
       // token.v is an object `{ ... }`
-      //items.push(HTML.Special(token.v));
+      items.push(HTML.Special(token.v));
     } else {
       // (can't happen)
       scanner.fatal("Unknown or unexpected token type: " + token.t);
diff --git a/packages/htmljs/html.js b/packages/htmljs/html.js
index 833e92f73d..15a0fc9523 100644
--- a/packages/htmljs/html.js
+++ b/packages/htmljs/html.js
@@ -52,25 +52,29 @@ var extendAttrs = function (tgt, src, parentComponent) {
   }
 };
 
-HTML.Tag.prototype.evaluateDynamicAttributes = function (parentComponent) {
-  if (this.attrs && (this.attrs.$dynamic instanceof Array)) {
-    var attrs = {};
-    extendAttrs(attrs, this.attrs, parentComponent);
-    // iterate over this.attrs.$dynamic, calling each element if it
-    // is a function and then using it to extend `attrs`.
-    var dynamics = this.attrs.$dynamic;
+HTML.evaluateDynamicAttributes = function (attrs, parentComponent) {
+  if (attrs && (attrs.$dynamic instanceof Array)) {
+    var result = {};
+    extendAttrs(result, attrs, parentComponent);
+    // iterate over attrs.$dynamic, calling each element if it
+    // is a function and then using it to extend `result`.
+    var dynamics = attrs.$dynamic;
     for (var i = 0; i < dynamics.length; i++) {
       var moreAttrs = dynamics[i];
       if (typeof moreAttrs === 'function')
         moreAttrs = moreAttrs();
-      extendAttrs(attrs, moreAttrs, parentComponent);
+      extendAttrs(result, moreAttrs, parentComponent);
     }
-    return attrs;
+    return result;
   } else {
-    return this.attrs;
+    return attrs;
   }
 };
 
+HTML.Tag.prototype.evaluateDynamicAttributes = function (parentComponent) {
+  return HTML.evaluateDynamicAttributes(this.attrs, parentComponent);
+};
+
 // Given "P" create the function `HTML.P`.
 var makeTagConstructor = function (tagName) {
   // Do a little dance so that tags print nicely in the Chrome console.
diff --git a/packages/spacebars-tests/template_tests.html b/packages/spacebars-tests/template_tests.html
index bd051a6904..185d19ea72 100644
--- a/packages/spacebars-tests/template_tests.html
+++ b/packages/spacebars-tests/template_tests.html
@@ -235,3 +235,7 @@
 <template name="spacebars_template_test_constant">
   {{#constant}}hello{{/constant}}
 </template>
+
+<template name="spacebars_template_test_textarea">
+  <textarea>{{foo}}</textarea>
+</template>
diff --git a/packages/spacebars-tests/template_tests.js b/packages/spacebars-tests/template_tests.js
index 74406c2746..e4f0a4f81a 100644
--- a/packages/spacebars-tests/template_tests.js
+++ b/packages/spacebars-tests/template_tests.js
@@ -668,3 +668,23 @@ Tinytest.add('spacebars - templates - constant', function (test) {
   test.equal(canonicalizeHtml(div.innerHTML), 'hello');
 
 });
+
+Tinytest.add('spacebars - templates - textarea', function (test) {
+  var tmpl = Template.spacebars_template_test_textarea;
+
+  var R = ReactiveVar('hello');
+
+  tmpl.foo = function () {
+    return R.get();
+  };
+
+  debugger;
+  var div = renderToDiv(tmpl);
+  var textarea = div.querySelector('textarea');
+  test.equal(textarea.value, 'hello');
+
+  R.set('world');
+  Deps.flush();
+  test.equal(textarea.value, 'world');
+
+});
diff --git a/packages/spacebars/compile_tests.js b/packages/spacebars/compile_tests.js
index fd2ef8631b..8ec14dc262 100644
--- a/packages/spacebars/compile_tests.js
+++ b/packages/spacebars/compile_tests.js
@@ -233,4 +233,12 @@ Tinytest.add("spacebars - compiler output", function (test) {
         });
       });
 
+  run("<textarea>{{foo}}</textarea>",
+      function () {
+        var self = this;
+        return HTML.TEXTAREA(function () {
+          return Spacebars.mustache(self.lookup("foo"));
+        });
+      });
+
 });
diff --git a/packages/ui/attrs.js b/packages/ui/attrs.js
index b6b4a507f5..5f3f2b83fd 100644
--- a/packages/ui/attrs.js
+++ b/packages/ui/attrs.js
@@ -74,25 +74,34 @@ var ClassHandler = AttributeHandler.extend({
   }
 });
 
-var SelectedHandler = AttributeHandler.extend({
+var BooleanHandler = AttributeHandler.extend({
   update: function (element, oldValue, value) {
+    var name = this.name;
     if (value == null) {
       if (oldValue != null)
-        element.selected = false;
+        element[name] = false;
     } else {
-      element.selected = true;
+      element[name] = true;
     }
   }
 });
 
+var ValueHandler = AttributeHandler.extend({
+  update: function (element, oldValue, value) {
+    element.value = value;
+  }
+});
+
 // XXX make it possible for users to register attribute handlers!
-makeAttributeHandler = function (name, value) {
+makeAttributeHandler = function (tagName, name, value) {
   // XXX will need one for 'style' on IE, though modern browsers
   // seem to handle setAttribute ok.
   if (name === 'class') {
     return new ClassHandler(name, value);
   } else if (name === 'selected') {
-    return new SelectedHandler(name, value);
+    return new BooleanHandler(name, value);
+  } else if (tagName === 'TEXTAREA' && name === 'value') {
+    return new ValueHandler(name, value);
   } else {
     return new AttributeHandler(name, value);
   }
diff --git a/packages/ui/render.js b/packages/ui/render.js
index 797ae0d672..26f3b51ebe 100644
--- a/packages/ui/render.js
+++ b/packages/ui/render.js
@@ -217,7 +217,7 @@ var updateAttributes = function(elem, newAttrs, handlers) {
     if ((! handlers) || (! handlers.hasOwnProperty(k))) {
       if (value !== null) {
         // make new handler
-        handler = makeAttributeHandler(k, value);
+        handler = makeAttributeHandler(elem.tagName, k, value);
         if (handlers)
           handlers[k] = handler;
         oldValue = null;
@@ -300,13 +300,21 @@ var materialize = function (node, parent, before, parentComponent) {
     insert(range, parent, before);
   } else if (node instanceof HTML.Tag) {
     var elem = document.createElement(node.tagName);
-    if (node.attrs) {
+    var rawAttrs = node.attrs;
+    var children = node.children;
+    if (node.tagName === 'TEXTAREA') {
+      rawAttrs = (rawAttrs || {});
+      rawAttrs.value = children;
+      children = [];
+    };
+
+    if (rawAttrs) {
       var attrUpdater = Deps.autorun(function (c) {
         if (! c.handlers)
           c.handlers = {};
 
         try {
-          var attrs = node.evaluateDynamicAttributes(parentComponent);
+          var attrs = HTML.evaluateDynamicAttributes(rawAttrs, parentComponent);
           var stringAttrs = {};
           if (attrs) {
             for (var k in attrs) {
@@ -323,11 +331,8 @@ var materialize = function (node, parent, before, parentComponent) {
         attrUpdater.stop();
       });
     }
-    if (node.tagName === 'TEXTAREA') {
-      elem.value = HTML.toText(node.children, HTML.TEXTMODE.STRING, parentComponent);
-    } else {
-      materialize(node.children, elem, null, parentComponent);
-    }
+    materialize(children, elem, null, parentComponent);
+
     insert(elem, parent, before);
   } else if (typeof node.instantiate === 'function') {
     // component
diff --git a/packages/ui/render_tests.js b/packages/ui/render_tests.js
index 65c646ce3c..8dcd3e4ea8 100644
--- a/packages/ui/render_tests.js
+++ b/packages/ui/render_tests.js
@@ -89,7 +89,8 @@ Tinytest.add("ui - render - textarea", function (test) {
     test.equal(div.querySelector('textarea').value, text);
 
     test.equal(toHTML(node), html);
-    test.equal(toCode(node), code);
+    if (typeof code === 'string')
+      test.equal(toCode(node), code);
   };
 
   run('Hello',
@@ -109,6 +110,10 @@ Tinytest.add("ui - render - textarea", function (test) {
       '<textarea>&amp;</textarea>',
       'HTML.TEXTAREA(HTML.CharRef({html: "&amp;", str: "&"}))');
 
+  run(['a', function () { return 'b'; }, 'c'],
+      'abc',
+      '<textarea>abc</textarea>');
+
 });
 
 Tinytest.add("ui - render - closures", function (test) {