diff --git a/History.md b/History.md
index c9cdbb3fb1..be3919064f 100644
--- a/History.md
+++ b/History.md
@@ -1,5 +1,11 @@
 ## vNEXT
 
+* Rework hot code push. The new `autoupdate` package drives automatic
+  reloads on update using standard DDP messages instead of a hardcoded
+  message at DDP startup. Now the hot code push only triggers when
+  client code changes; server only code changes will not cause the page
+  to reload.
+
 * Bundler failures cause non-zero exit code in `meteor run`.  #1515
 
 * Fix `meteor run` with settings files containing non-ASCII characters.  #1497
@@ -20,7 +26,7 @@
 * Upgraded dependencies:
   * SockJS server from 0.3.7 to 0.3.8
 
-Patches contributed by GitHub users mcbain, rzymek.
+Patches contributed by GitHub users awwx, mcbain, rzymek.
 
 
 ## v0.6.6.3
diff --git a/packages/appcache/appcache-server.js b/packages/appcache/appcache-server.js
index acd7006012..936be30359 100644
--- a/packages/appcache/appcache-server.js
+++ b/packages/appcache/appcache-server.js
@@ -84,30 +84,32 @@ WebApp.connectHandlers.use(function(req, res, next) {
     return;
   }
 
+  var manifest = "CACHE MANIFEST\n\n";
+
   // After the browser has downloaded the app files from the server and
   // has populated the browser's application cache, the browser will
   // *only* connect to the server and reload the application if the
   // *contents* of the app manifest file has changed.
   //
-  // So we have to ensure that if any static client resources change,
-  // something changes in the manifest file.  We compute a hash of
-  // everything that gets delivered to the client during the initial
-  // web page load, and include that hash as a comment in the app
-  // manifest.  That way if anything changes, the comment changes, and
-  // the browser will reload resources.
+  // So to ensure that the client updates if client resources change,
+  // include a hash of client resources in the manifest.
 
-  var hash = crypto.createHash('sha1');
-  hash.update(JSON.stringify(__meteor_runtime_config__), 'utf8');
-  _.each(WebApp.clientProgram.manifest, function (resource) {
-    if (resource.where === 'client' || resource.where === 'internal') {
-      hash.update(resource.hash);
-    }
-  });
-  var digest = hash.digest('hex');
+  manifest += "# " + WebApp.clientHash + "\n";
 
-  var manifest = "CACHE MANIFEST\n\n";
-  manifest += '# ' + digest + "\n\n";
+  // When using the autoupdate package, also include
+  // AUTOUPDATE_VERSION.  Otherwise the client will get into an
+  // infinite loop of reloads when the browser doesn't fetch the new
+  // app HTML which contains the new version, and autoupdate will
+  // reload again trying to get the new code.
 
+  if (Package.autoupdate) {
+    var version = Package.autoupdate.AutoUpdate.autoUpdateVersion;
+    if (version !== WebApp.clientHash)    
+      manifest += "# " + version + "\n";
+  }
+
+  manifest += "\n";
+  
   manifest += "CACHE:" + "\n";
   manifest += "/" + "\n";
   _.each(WebApp.clientProgram.manifest, function (resource) {
diff --git a/packages/appcache/package.js b/packages/appcache/package.js
index 9edc1c5bb8..24fd197964 100644
--- a/packages/appcache/package.js
+++ b/packages/appcache/package.js
@@ -7,6 +7,7 @@ Package.on_use(function (api) {
   api.use('reload', 'client');
   api.use('routepolicy', 'server');
   api.use('underscore', 'server');
+  api.use('autoupdate', 'server', {weak: true});
   api.add_files('appcache-client.js', 'client');
   api.add_files('appcache-server.js', 'server');
 });
diff --git a/packages/autoupdate/.gitignore b/packages/autoupdate/.gitignore
new file mode 100644
index 0000000000..677a6fc263
--- /dev/null
+++ b/packages/autoupdate/.gitignore
@@ -0,0 +1 @@
+.build*
diff --git a/packages/autoupdate/QA.md b/packages/autoupdate/QA.md
new file mode 100644
index 0000000000..189353ec32
--- /dev/null
+++ b/packages/autoupdate/QA.md
@@ -0,0 +1,114 @@
+# QA Notes
+
+## Hot Code Push Reload
+
+Run the leaderboard example, and click on one of the names.  Make a
+change to the leaderboard.html file, see the client reload, and see
+that the name is still selected.
+
+
+## AUTOUPDATE_VERSION
+
+Set the `AUTOUPDATE_VERSION` environment variable when running the
+application:
+
+    $ AUTOUPDATE_VERSION=abc meteor
+
+Now when you make an HTML change, it won't appear in the client
+automatically.  (Note the leader list flickers when the server
+subscription restarts, but that's not a window reload).
+
+Conversely, you can force a client reload (even without making any
+client code changes) by restarting the server with a new value for
+`AUTOUPDATE_VERSION`.
+
+
+## No Client Reload on Server-only Change
+
+Revert previous changes and run the example without setting
+AUTOUPDATE_VERSION.
+
+Note that it might look like the browser is reloading because the page
+content in the leaderboard example will flicker when the server
+restarts because the example is using autopublish, but that the window
+won't actually be reloading.
+
+In the browser console, assign a variable such as `a = true` so that
+you can easily verify that the client hasn't reloaded.
+
+In the leaderboard example directory, create the `server` directory
+and add `foo.js`.  See in the browser console that `a` is still
+defined, indicating the browser hasn't reloaded.
+
+
+## Test with the appcache
+
+Add the appcache package:
+
+    $ meteor add appcache
+
+And do the above tests again.
+
+Note that if 1) AUTOUPDATE_VERSION is set so the client doesn't
+automatically reload, 2) you make a client change, and 3) you manually
+reload the browser page, you usually *won't* see the updated HTML the
+*first* time you reload (unless the browser happened to check the app
+cache manifest between steps 2 and 3).  This is normal browser app
+cache behavior: the browser populates the app cache in the background,
+so it doesn't wait for new files to download before displaying the web
+page.
+
+
+## AutoUpdate.newClientAvailable
+
+Undo previous changes made, such as by using `git checkout .` Reload
+the client, which will cause the browser to stop using the app cache.
+
+It's hard to see the `newClientAvailable` reactive variable when the
+client automatically reloads.  Remove the `reload` package so you can
+see the variable without having the client also reload.
+
+    $ meteor remove standard-app-packages
+    $ meteor add meteor webapp logging deps session livedata
+    $ meteor add mongo-livedata templating handlebars check underscore
+    $ meteor add jquery random ejson autoupdate
+
+Add to leaderboard.js:
+
+    Template.leaderboard.available = AutoUpdate.newClientAvailable;
+
+And add `{{available}}` to the leaderboard template in
+leaderboard.html.
+
+Initially you'll see `false`, and then when you make a change to the
+leaderboard HTML you'll see the variable change to `true`.  (You won't
+see the new HTML on the client because you disabled reload).
+
+Amusingly, you can undo the addition you made to the HTML and the "new
+client available" variable will go back to `false` (you now don't have
+client code available on the server different than what's running in
+the browser), because by default the client version is based on a hash
+of the client files.
+
+
+## DDP Version Negotiation Failure
+
+A quick way to test DDP version negotiation failure is to force the
+client to use the wrong DDP version.  At the top of
+livedata_connection.js:
+
+     var Connection = function (url, options) {
+        var self = this;
+    +   options.supportedDDPVersions = ['abc'];
+
+You will see the client reload (in the hope that new client code will
+be available that can successfully negotiation the DDP version).  Each
+reload takes longer than the one before, using an exponential backoff.
+
+If you remove the `options.supportedDDPVersions` line and allow the
+client to connect (or manually reload the browser page so you don't
+have to wait), this will reset the exponential backoff counter.
+
+You can verify the counter was reset by adding the line back in a
+second time, and you'll see the reload cycle start over again with
+first reloading quickly, and then again taking longer between tries.
diff --git a/packages/autoupdate/autoupdate_client.js b/packages/autoupdate/autoupdate_client.js
new file mode 100644
index 0000000000..2216e80c3f
--- /dev/null
+++ b/packages/autoupdate/autoupdate_client.js
@@ -0,0 +1,61 @@
+// Subscribe to the `meteor_autoupdate_clientVersions` collection,
+// which contains the set of acceptable client versions.
+//
+// A "hard code push" occurs when the current client version is not in
+// the set of acceptable client versions (or the server updates the
+// collection, and the current client version is no longer in the
+// set).
+//
+// When the `reload` package is loaded, a hard code push causes
+// the browser to reload, so that it will load the latest client
+// version from the server.
+//
+// A "soft code push" represents the situation when the current client
+// version is in the set of acceptable versions, but there is a newer
+// version available on the server.
+//
+// `AutoUpdate.newClientAvailable` is a reactive data source which
+// becomes `true` if there is a new version of the client is available on
+// the server.
+//
+// This package doesn't implement a soft code reload process itself,
+// but `newClientAvailable` could be used for example to display a
+// "click to reload" link to the user.
+
+// The client version of the client code currently running in the
+// browser.
+var autoUpdateVersion = __meteor_runtime_config__.autoUpdateVersion;
+
+
+// The collection of acceptable client versions.
+var ClientVersions = new Meteor.Collection("meteor_autoupdate_clientVersions");
+
+
+AutoUpdate = {};
+
+AutoUpdate.newClientAvailable = function () {
+  return !! ClientVersions.findOne(
+    {$and: [
+      {current: true},
+      {_id: {$ne: autoUpdateVersion}}
+    ]}
+  );
+};
+
+
+Meteor.subscribe("meteor_autoupdate_clientVersions", {
+  onError: function (error) {
+    Meteor._debug("autoupdate subscription failed:", error);
+  },
+  onReady: function () {
+    if (Package.reload) {
+      Deps.autorun(function (computation) {
+        if (ClientVersions.findOne({current: true}) &&
+            (! ClientVersions.findOne({_id: autoUpdateVersion}))) {
+          computation.stop();
+          Package.reload.Reload._reload();
+        }
+      });
+    }
+  }
+});
diff --git a/packages/autoupdate/autoupdate_server.js b/packages/autoupdate/autoupdate_server.js
new file mode 100644
index 0000000000..1d0031e76d
--- /dev/null
+++ b/packages/autoupdate/autoupdate_server.js
@@ -0,0 +1,74 @@
+// Publish the current client version to the client.  When a client
+// sees the subscription change and that there is a new version of the
+// client available on the server, it can reload.
+//
+// By default the current client version is identified by a hash of
+// the client resources seen by the browser (the HTML, CSS, code, and
+// static files in the `public` directory).
+//
+// If the environment variable `AUTOUPDATE_VERSION` is set it will be
+// used as the client id instead.  You can use this to control when
+// the client reloads.  For example, if you want to only force a
+// reload on major changes, you can use a custom AUTOUPDATE_VERSION
+// which you only change when something worth pushing to clients
+// immediately happens.
+//
+// For backwards compatibility, SERVER_ID can be used instead of
+// AUTOUPDATE_VERSION.
+//
+// The server publishes a `meteor_autoupdate_clientVersions`
+// collection.  The contract of this collection is that each document
+// in the collection represents an acceptable client version, with the
+// `_id` field of the document set to the client id.
+//
+// An "unacceptable" client version, for example, might be a version
+// of the client code which has a severe UI bug, or is incompatible
+// with the server.  An "acceptable" client version could be one that
+// is older than the latest client code available on the server but
+// still works.
+//
+// One of the published documents in the collection will have its
+// `current` field set to `true`.  This is the version of the client
+// code that the browser will receive from the server if it reloads.
+//
+// In this implementation only one document is published, the current
+// client version.  Developers can easily experiment with different
+// versioning and updating models by forking this package.
+
+AutoUpdate = {};
+
+// The client hash includes __meteor_runtime_config__, so wait until
+// all packages have loaded and have had a chance to populate the
+// runtime config before using the client hash as our default auto
+// update version id.
+
+AutoUpdate.autoUpdateVersion = null;
+
+Meteor.startup(function () {
+  if (AutoUpdate.autoUpdateVersion === null)
+    AutoUpdate.autoUpdateVersion =
+      process.env.AUTOUPDATE_VERSION ||
+      process.env.SERVER_ID ||
+      WebApp.clientHash;
+
+  // Make autoUpdateVersion available on the client.
+  __meteor_runtime_config__.autoUpdateVersion = AutoUpdate.autoUpdateVersion;
+});
+
+
+Meteor.publish(
+  "meteor_autoupdate_clientVersions",
+  function () {
+    var self = this;
+    // Using `autoUpdateVersion` here is safe because we can't get a
+    // subscription before webapp starts listening, and it doesn't do
+    // that until the startup hooks have run.
+    self.added(
+      "meteor_autoupdate_clientVersions",
+      AutoUpdate.autoUpdateVersion,
+      {current: true}
+    );
+    self.ready();
+  },
+  {is_auto: true}
+);
diff --git a/packages/autoupdate/package.js b/packages/autoupdate/package.js
new file mode 100644
index 0000000000..c7f04a279c
--- /dev/null
+++ b/packages/autoupdate/package.js
@@ -0,0 +1,13 @@
+Package.describe({
+  summary: "Update the client when new client code is available"
+});
+
+Package.on_use(function (api) {
+  api.use('webapp', 'server');
+  api.use(['livedata', 'mongo-livedata'], ['client', 'server']);
+  api.use('reload', 'client', {weak: true});
+
+  api.export('AutoUpdate');
+  api.add_files('autoupdate_server.js', 'server');
+  api.add_files('autoupdate_client.js', 'client');
+});
diff --git a/packages/livedata/DDP.md b/packages/livedata/DDP.md
index 8f88889a5d..655f1ca105 100644
--- a/packages/livedata/DDP.md
+++ b/packages/livedata/DDP.md
@@ -37,11 +37,11 @@ depending on message type.
 
 ### Procedure:
 
-The server may send an initial message which is a JSON object lacking a `msg`
-key. If so, the client should ignore it. The client does not have to wait for
-this message. (This message is used to help implement hot code reload over our
-SockJS transport. It is currently sent over websockets as well, but probably
-should not be.)
+The server may send an initial message which is a JSON object lacking
+a `msg` key. If so, the client should ignore it. The client does not
+have to wait for this message. (The message was once used to help
+implement Meteor's hot code reload feature; it is now only included to
+force old clients to update).
 
  * The client sends a `connect` message.
  * If the server is willing to speak the `version` of the protocol specified in
diff --git a/packages/livedata/client_convenience.js b/packages/livedata/client_convenience.js
index b6992d1ac7..a95fbc17dd 100644
--- a/packages/livedata/client_convenience.js
+++ b/packages/livedata/client_convenience.js
@@ -11,8 +11,28 @@ if (Meteor.isClient) {
     if (__meteor_runtime_config__.DDP_DEFAULT_CONNECTION_URL)
       ddpUrl = __meteor_runtime_config__.DDP_DEFAULT_CONNECTION_URL;
   }
+
+  var retry = new Retry();
+
+  var onDDPVersionNegotiationFailure = function (description) {
+    Meteor._debug(description);
+    if (Package.reload) {
+      var migrationData = Package.reload.Reload._migrationData('livedata') || {};
+      var failures = migrationData.DDPVersionNegotiationFailures || 0;
+      ++failures;
+      Package.reload.Reload._onMigrate('livedata', function () {
+        return [true, {DDPVersionNegotiationFailures: failures}];
+      });
+      retry.retryLater(failures, function () {
+        Package.reload.Reload._reload();
+      });
+    }
+  };
+
   Meteor.connection =
-    DDP.connect(ddpUrl, true /* restart_on_update */);
+    DDP.connect(ddpUrl, {
+      onDDPVersionNegotiationFailure: onDDPVersionNegotiationFailure
+    });
 
   // Proxy the public methods of Meteor.connection so they can
   // be called directly on Meteor.
diff --git a/packages/livedata/livedata_connection.js b/packages/livedata/livedata_connection.js
index 04fb380f90..15b37d1b96 100644
--- a/packages/livedata/livedata_connection.js
+++ b/packages/livedata/livedata_connection.js
@@ -7,20 +7,18 @@ if (Meteor.isServer) {
 // @param url {String|Object} URL to Meteor app,
 //   or an object as a test hook (see code)
 // Options:
-//   reloadOnUpdate: should we try to reload when the server says
-//                      there's new code available?
 //   reloadWithOutstanding: is it OK to reload if there are outstanding methods?
+//   onDDPNegotiationVersionFailure: callback when version negotiation fails.
 var Connection = function (url, options) {
   var self = this;
   options = _.extend({
-    reloadOnUpdate: false,
-    // The rest of these options are only for testing.
-    reloadWithOutstanding: false,
-    supportedDDPVersions: SUPPORTED_DDP_VERSIONS,
-    onConnectionFailure: function (reason) {
-      Meteor._debug("Failed DDP connection: " + reason);
+    onConnected: function () {},
+    onDDPVersionNegotiationFailure: function (description) {
+      Meteor._debug(description);
     },
-    onConnected: function () {}
+    // These options are only for testing.
+    reloadWithOutstanding: false,
+    supportedDDPVersions: SUPPORTED_DDP_VERSIONS
   }, options);
 
   // If set, called when we reconnect, queuing method calls _before_ the
@@ -162,7 +160,7 @@ var Connection = function (url, options) {
 
   // Block auto-reload while we're waiting for method responses.
   if (Meteor.isClient && Package.reload && !options.reloadWithOutstanding) {
-    Reload._onMigrate(function (retry) {
+    Package.reload.Reload._onMigrate(function (retry) {
       if (!self._readyToMigrate()) {
         if (self._retryMigrate)
           throw new Error("Two migrations in progress?");
@@ -183,7 +181,11 @@ var Connection = function (url, options) {
     }
 
     if (msg === null || !msg.msg) {
-      Meteor._debug("discarding invalid livedata message", msg);
+      // DEPRECATED. ignore the old welcome message for back compat.
+      // Remove this 'if' once the server stops sending welcome messages
+      // (stream_server.js).
+      if (! (msg && msg.server_id))
+        Meteor._debug("discarding invalid livedata message", msg);
       return;
     }
 
@@ -197,10 +199,10 @@ var Connection = function (url, options) {
         self._versionSuggestion = msg.version;
         self._stream.reconnect({_force: true});
       } else {
-        var error =
-              "Version negotiation failed; server requested version " + msg.version;
-        self._stream.disconnect({_permanent: true, _error: error});
-        options.onConnectionFailure(error);
+        var description =
+              "DDP version negotiation failed; server requested version " + msg.version;
+        self._stream.disconnect({_permanent: true, _error: description});
+        options.onDDPVersionNegotiationFailure(description);
       }
     }
     else if (_.include(['added', 'changed', 'removed', 'ready', 'updated'], msg.msg))
@@ -277,17 +279,6 @@ var Connection = function (url, options) {
     self._stream.on('message', onMessage);
     self._stream.on('reset', onReset);
   }
-
-
-  if (Meteor.isClient && Package.reload && options.reloadOnUpdate) {
-    self._stream.on('update_available', function () {
-      // Start trying to migrate to a new version. Until all packages
-      // signal that they're ready for a migration, the app will
-      // continue running normally.
-      Reload._reload();
-    });
-  }
-
 };
 
 // A MethodInvoker manages sending a method to the server and calling the user's
@@ -800,8 +791,16 @@ _.extend(Connection.prototype, {
   _unsubscribeAll: function () {
     var self = this;
     _.each(_.clone(self._subscriptions), function (sub, id) {
-      self._send({msg: 'unsub', id: id});
-      delete self._subscriptions[id];
+      // Avoid killing the autoupdate subscription so that developers
+      // still get hot code pushes when writing tests.
+      //
+      // XXX it's a hack to encode knowledge about autoupdate here,
+      // but it doesn't seem worth it yet to have a special API for
+      // subscriptions to preserve after unit tests.
+      if (sub.name !== 'meteor_autoupdate_clientVersions') {
+        self._send({msg: 'unsub', id: id});
+        delete self._subscriptions[id];
+      }
     });
   },
 
@@ -1392,9 +1391,8 @@ LivedataTest.Connection = Connection;
 //     "/",
 //     "ddp+sockjs://ddp--****-foo.meteor.com/sockjs"
 //
-DDP.connect = function (url, _reloadOnUpdate) {
-  var ret = new Connection(
-    url, {reloadOnUpdate: _reloadOnUpdate});
+DDP.connect = function (url, options) {
+  var ret = new Connection(url, options);
   allConnections.push(ret); // hack. see below.
   return ret;
 };
diff --git a/packages/livedata/livedata_connection_tests.js b/packages/livedata/livedata_connection_tests.js
index 119a78792d..b37e3d97a7 100644
--- a/packages/livedata/livedata_connection_tests.js
+++ b/packages/livedata/livedata_connection_tests.js
@@ -1335,7 +1335,7 @@ Tinytest.addAsync("livedata connection - version negotiation requires renegotiat
   var connection = new LivedataTest.Connection(getSelfConnectionUrl(), {
     reloadWithOutstanding: true,
     supportedDDPVersions: ["garbled", LivedataTest.SUPPORTED_DDP_VERSIONS[0]],
-    onConnectionFailure: function () { test.fail(); onComplete(); },
+    onDDPVersionNegotiationFailure: function () { test.fail(); onComplete(); },
     onConnected: function () {
       test.equal(connection._version, LivedataTest.SUPPORTED_DDP_VERSIONS[0]);
       connection._stream.disconnect({_permanent: true});
@@ -1349,9 +1349,9 @@ Tinytest.addAsync("livedata connection - version negotiation error",
   var connection = new LivedataTest.Connection(getSelfConnectionUrl(), {
     reloadWithOutstanding: true,
     supportedDDPVersions: ["garbled", "more garbled"],
-    onConnectionFailure: function () {
+    onDDPVersionNegotiationFailure: function () {
       test.equal(connection.status().status, "failed");
-      test.matches(connection.status().reason, /Version negotiation failed/);
+      test.matches(connection.status().reason, /DDP version negotiation failed/);
       test.isFalse(connection.status().connected);
       onComplete();
     },
diff --git a/packages/livedata/package.js b/packages/livedata/package.js
index 250c116f22..1de163f06d 100644
--- a/packages/livedata/package.js
+++ b/packages/livedata/package.js
@@ -31,8 +31,9 @@ Package.on_use(function (api) {
   api.export('LivedataTest', {testOnly: true});
 
   // Transport
-  api.use('reload', 'client');
+  api.use('reload', 'client', {weak: true});
   api.add_files('common.js');
+  api.add_files('retry.js', ['client', 'server']);
   api.add_files(['sockjs-0.3.4.js', 'stream_client_sockjs.js'], 'client');
   api.add_files('stream_client_nodejs.js', 'server');
   api.add_files('stream_client_common.js', ['client', 'server']);
diff --git a/packages/livedata/retry.js b/packages/livedata/retry.js
new file mode 100644
index 0000000000..ac155c19e0
--- /dev/null
+++ b/packages/livedata/retry.js
@@ -0,0 +1,65 @@
+// Retry logic with an exponential backoff.
+
+Retry = function (options) {
+  var self = this;
+  _.extend(self, _.defaults(_.clone(options || {}), {
+    // time for initial reconnect attempt.
+    baseTimeout: 1000,
+    // exponential factor to increase timeout each attempt.
+    exponent: 2.2,
+    // maximum time between reconnects. keep this intentionally
+    // high-ish to ensure a server can recover from a failure caused
+    // by load
+    maxTimeout: 5 * 60000, // 5 minutes
+    // time to wait for the first 2 retries.  this helps page reload
+    // speed during dev mode restarts, but doesn't hurt prod too
+    // much (due to CONNECT_TIMEOUT)
+    minTimeout: 10,
+    // how many times to try to reconnect 'instantly'
+    minCount: 2,
+    // fuzz factor to randomize reconnect times by. avoid reconnect
+    // storms.
+    fuzz: 0.5 // +- 25%
+  }));
+  self.retryTimer = null;
+};
+
+_.extend(Retry.prototype, {
+
+  // Reset a pending retry, if any.
+  clear: function () {
+    var self = this;
+    if (self.retryTimer)
+      clearTimeout(self.retryTimer);
+    self.retryTimer = null;
+  },
+
+  // Calculate how long to wait in milliseconds to retry, based on the
+  // `count` of which retry this is.
+  _timeout: function (count) {
+    var self = this;
+
+    if (count < self.minCount)
+      return self.minTimeout;
+
+    var timeout = Math.min(
+      self.maxTimeout,
+      self.baseTimeout * Math.pow(self.exponent, count));
+    // fuzz the timeout randomly, to avoid reconnect storms when a
+    // server goes down.
+    timeout = timeout * ((Random.fraction() * self.fuzz) +
+                         (1 - self.fuzz/2));
+    return timeout;
+  },
+
+  // Call `fn` after a delay, based on the `count` of which retry this is.
+  retryLater: function (count, fn) {
+    var self = this;    
+    var timeout = self._timeout(count);
+    if (self.retryTimer)
+      clearTimeout(self.retryTimer);
+    self.retryTimer = setTimeout(fn, timeout);
+    return timeout;
+  }
+
+});
diff --git a/packages/livedata/stream_client_common.js b/packages/livedata/stream_client_common.js
index 817eb211d3..47f003cc62 100644
--- a/packages/livedata/stream_client_common.js
+++ b/packages/livedata/stream_client_common.js
@@ -77,7 +77,7 @@ _.extend(LivedataTest.ClientStream.prototype, {
   on: function (name, callback) {
     var self = this;
 
-    if (name !== 'message' && name !== 'reset' && name !== 'update_available')
+    if (name !== 'message' && name !== 'reset')
       throw new Error("unknown event type: " + name);
 
     if (!self.eventCallbacks[name])
@@ -94,27 +94,6 @@ _.extend(LivedataTest.ClientStream.prototype, {
     // failed.
     self.CONNECT_TIMEOUT = 10000;
 
-
-    // time for initial reconnect attempt.
-    self.RETRY_BASE_TIMEOUT = 1000;
-    // exponential factor to increase timeout each attempt.
-    self.RETRY_EXPONENT = 2.2;
-    // maximum time between reconnects. keep this intentionally
-    // high-ish to ensure a server can recover from a failure caused
-    // by load
-    self.RETRY_MAX_TIMEOUT = 5 * 60000; // 5 minutes
-    // time to wait for the first 2 retries.  this helps page reload
-    // speed during dev mode restarts, but doesn't hurt prod too
-    // much (due to CONNECT_TIMEOUT)
-    self.RETRY_MIN_TIMEOUT = 10;
-    // how many times to try to reconnect 'instantly'
-    self.RETRY_MIN_COUNT = 2;
-    // fuzz factor to randomize reconnect times by. avoid reconnect
-    // storms.
-    self.RETRY_FUZZ = 0.5; // +- 25%
-
-
-
     self.eventCallbacks = {}; // name -> [callback]
 
     self._forcedToDisconnect = false;
@@ -134,7 +113,7 @@ _.extend(LivedataTest.ClientStream.prototype, {
     };
 
     //// Retry logic
-    self.retryTimer = null;
+    self._retry = new Retry;
     self.connectionTimer = null;
 
   },
@@ -161,9 +140,7 @@ _.extend(LivedataTest.ClientStream.prototype, {
       self._lostConnection();
     }
 
-    if (self.retryTimer)
-      clearTimeout(self.retryTimer);
-    self.retryTimer = null;
+    self._retry.clear();
     self.currentStatus.retryCount -= 1; // don't count manual retries
     self._retryNow();
   },
@@ -186,10 +163,7 @@ _.extend(LivedataTest.ClientStream.prototype, {
     }
 
     self._cleanup();
-    if (self.retryTimer) {
-      clearTimeout(self.retryTimer);
-      self.retryTimer = null;
-    }
+    self._retry.clear();
 
     self.currentStatus = {
       status: (options._permanent ? "failed" : "offline"),
@@ -210,22 +184,6 @@ _.extend(LivedataTest.ClientStream.prototype, {
     self._retryLater(); // sets status. no need to do it here.
   },
 
-  _retryTimeout: function (count) {
-    var self = this;
-
-    if (count < self.RETRY_MIN_COUNT)
-      return self.RETRY_MIN_TIMEOUT;
-
-    var timeout = Math.min(
-      self.RETRY_MAX_TIMEOUT,
-      self.RETRY_BASE_TIMEOUT * Math.pow(self.RETRY_EXPONENT, count));
-    // fuzz the timeout randomly, to avoid reconnect storms when a
-    // server goes down.
-    timeout = timeout * ((Random.fraction() * self.RETRY_FUZZ) +
-                         (1 - self.RETRY_FUZZ/2));
-    return timeout;
-  },
-
   // fired when we detect that we've gone online. try to reconnect
   // immediately.
   _online: function () {
@@ -237,10 +195,10 @@ _.extend(LivedataTest.ClientStream.prototype, {
   _retryLater: function () {
     var self = this;
 
-    var timeout = self._retryTimeout(self.currentStatus.retryCount);
-    if (self.retryTimer)
-      clearTimeout(self.retryTimer);
-    self.retryTimer = setTimeout(_.bind(self._retryNow, self), timeout);
+    var timeout = self._retry.retryLater(
+      self.currentStatus.retryCount,
+      _.bind(self._retryNow, self)
+    );
 
     self.currentStatus.status = "waiting";
     self.currentStatus.connected = false;
diff --git a/packages/livedata/stream_client_nodejs.js b/packages/livedata/stream_client_nodejs.js
index 0b79754aa3..1a833c0e34 100644
--- a/packages/livedata/stream_client_nodejs.js
+++ b/packages/livedata/stream_client_nodejs.js
@@ -42,7 +42,6 @@ LivedataTest.ClientStream = function (endpoint) {
 
   self._initCommon();
 
-  self.expectingWelcome = false;
   //// Kickoff!
   self._launchConnection();
 };
@@ -106,19 +105,10 @@ _.extend(LivedataTest.ClientStream.prototype, {
       self._lostConnection();
     });
 
-    self.expectingWelcome = true;
     connection.on('message', function (message) {
       if (self.currentConnection !== this)
         return; // old connection still emitting messages
 
-      if (self.expectingWelcome) {
-        // Discard the first message that comes across the
-        // connection. It is the hot code push version identifier and
-        // is not actually part of DDP.
-        self.expectingWelcome = false;
-        return;
-      }
-
       if (message.type === "utf8") // ignore binary frames
         _.each(self.eventCallbacks.message, function (callback) {
           callback(message.utf8Data);
diff --git a/packages/livedata/stream_client_sockjs.js b/packages/livedata/stream_client_sockjs.js
index 8605e6275c..1edf9ea7d3 100644
--- a/packages/livedata/stream_client_sockjs.js
+++ b/packages/livedata/stream_client_sockjs.js
@@ -20,8 +20,6 @@ LivedataTest.ClientStream = function (url) {
   self.rawUrl = url;
   self.socket = null;
 
-  self.sent_update_available = false;
-
   self.heartbeatTimer = null;
 
   // Listen to global 'online' event if we are running in a browser.
@@ -52,7 +50,7 @@ _.extend(LivedataTest.ClientStream.prototype, {
     self.rawUrl = url;
   },
 
-  _connected: function (welcome_message) {
+  _connected: function () {
     var self = this;
 
     if (self.connectionTimer) {
@@ -65,24 +63,6 @@ _.extend(LivedataTest.ClientStream.prototype, {
       return;
     }
 
-    // inspect the welcome data and decide if we have to reload
-    try {
-      var welcome_data = JSON.parse(welcome_message);
-    } catch (err) {
-      Meteor._debug("DEBUG: malformed welcome packet", welcome_message);
-    }
-
-    if (welcome_data && welcome_data.server_id) {
-      if (__meteor_runtime_config__.serverId &&
-          __meteor_runtime_config__.serverId !== welcome_data.server_id &&
-          !self.sent_update_available) {
-        self.sent_update_available = true;
-        _.each(self.eventCallbacks.update_available,
-               function (callback) { callback(); });
-      }
-    } else
-      Meteor._debug("DEBUG: invalid welcome packet", welcome_data);
-
     // update status
     self.currentStatus.status = "connected";
     self.currentStatus.connected = true;
@@ -171,15 +151,13 @@ _.extend(LivedataTest.ClientStream.prototype, {
       toSockjsUrl(self.rawUrl), undefined, {
         debug: false, protocols_whitelist: self._sockjsProtocolsWhitelist()
       });
+    self.socket.onopen = function (data) {
+      self._connected();
+    };
     self.socket.onmessage = function (data) {
       self._heartbeat_received();
 
-      // first message we get when we're connecting goes to _connected,
-      // which connects us. All subsequent messages (while connected) go to
-      // the callback.
-      if (self.currentStatus.status === "connecting")
-        self._connected(data.data);
-      else if (self.currentStatus.connected)
+      if (self.currentStatus.connected)
         _.each(self.eventCallbacks.message, function (callback) {
           callback(data.data);
         });
diff --git a/packages/livedata/stream_server.js b/packages/livedata/stream_server.js
index 566dc0574b..160d11e9e8 100644
--- a/packages/livedata/stream_server.js
+++ b/packages/livedata/stream_server.js
@@ -1,12 +1,3 @@
-// unique id for this instantiation of the server. If this changes
-// between client reconnects, the client will reload. You can set the
-// environment variable "SERVER_ID" to control this. For example, if
-// you want to only force a reload on major changes, you can use a
-// custom serverId which you only change when something worth pushing
-// to clients immediately happens.
-__meteor_runtime_config__.serverId =
-  process.env.SERVER_ID ? process.env.SERVER_ID : Random.id();
-
 var pathPrefix = __meteor_runtime_config__.ROOT_URL_PATH_PREFIX ||  "";
 
 StreamServer = function () {
@@ -74,10 +65,12 @@ StreamServer = function () {
     });
     self.open_sockets.push(socket);
 
-
-    // Send a welcome message with the serverId. Client uses this to
-    // reload if needed.
-    socket.send(JSON.stringify({server_id: __meteor_runtime_config__.serverId}));
+    // DEPRECATED. Send the old style welcome message, which will force
+    // old clients to reload. Remove this once we're not concerned about
+    // people upgrading from a pre-0.6.7 release. Also, remove the
+    // clause in the client that ignores the welcome message
+    // (livedata_connection.js)
+    socket.send(JSON.stringify({server_id: "0"}));
 
     // call all our callbacks when we get a new socket. they will do the
     // work of setting up handlers and such for specific messages.
diff --git a/packages/standard-app-packages/package.js b/packages/standard-app-packages/package.js
index 147674e8e5..5510982ad2 100644
--- a/packages/standard-app-packages/package.js
+++ b/packages/standard-app-packages/package.js
@@ -42,4 +42,13 @@ Package.on_use(function(api) {
     // People like being able to clone objects.
     'ejson'
   ]);
+
+  // These are useful too!  But you don't have to see their exports
+  // unless you want to.
+  api.use([
+    // We can reload the client without messing up methods in flight.
+    'reload',
+    // And update automatically when new client code is available!
+    'autoupdate'
+  ], ['client', 'server']);
 });
diff --git a/packages/test-in-browser/autoupdate.js b/packages/test-in-browser/autoupdate.js
new file mode 100644
index 0000000000..b97d27fd4d
--- /dev/null
+++ b/packages/test-in-browser/autoupdate.js
@@ -0,0 +1,7 @@
+// autoupdate normally won't reload on server-only changes, but when
+// running tests in the browser it's nice to have server changes cause
+// the tests to reload.  Setting the auto update version to a
+// different value when the server restarts accomplishes this.
+
+if (Package.autoupdate)
+  Package.autoupdate.AutoUpdate.autoUpdateVersion = Random.id();
diff --git a/packages/test-in-browser/package.js b/packages/test-in-browser/package.js
index 61eaf8980b..cfe84ca858 100644
--- a/packages/test-in-browser/package.js
+++ b/packages/test-in-browser/package.js
@@ -21,4 +21,8 @@ Package.on_use(function (api) {
     'driver.html',
     'driver.js'
   ], "client");
+
+  api.use('autoupdate', 'server', {weak: true});
+  api.use('random', 'server');
+  api.add_files('autoupdate.js', 'server');
 });
diff --git a/packages/webapp/webapp_server.js b/packages/webapp/webapp_server.js
index 8225fa3f2b..36f469d74d 100644
--- a/packages/webapp/webapp_server.js
+++ b/packages/webapp/webapp_server.js
@@ -151,6 +151,50 @@ var appUrl = function (url) {
   return true;
 };
 
+
+// Calculate a hash of all the client resources downloaded by the
+// browser, including the application HTML, runtime config, code, and
+// static files.
+//
+// This hash *must* change if any resources seen by the browser
+// change, and ideally *doesn't* change for any server-only changes
+// (but the second is a performance enhancement, not a hard
+// requirement).
+
+var calculateClientHash = function () {
+  var hash = crypto.createHash('sha1');
+  hash.update(JSON.stringify(__meteor_runtime_config__), 'utf8');
+  _.each(WebApp.clientProgram.manifest, function (resource) {
+    if (resource.where === 'client' || resource.where === 'internal') {
+      hash.update(resource.hash);
+    }
+  });
+  return hash.digest('hex');
+};
+
+
+// We need to calculate the client hash after all packages have loaded
+// to give them a chance to populate __meteor_runtime_config__.
+//
+// Calculating the hash during startup means that packages can only
+// populate __meteor_runtime_config__ during load, not during startup.
+//
+// Calculating instead it at the beginning of main after all startup
+// hooks had run would allow packages to also populate
+// __meteor_runtime_config__ during startup, but that's too late for
+// autoupdate because it needs to have the client hash at startup to
+// insert the auto update version itself into
+// __meteor_runtime_config__ to get it to the client.
+//
+// An alternative would be to give autoupdate a "post-start,
+// pre-listen" hook to allow it to insert the auto update version at
+// the right moment.
+
+Meteor.startup(function () {
+  WebApp.clientHash = calculateClientHash();
+});
+
+
 var runWebAppServer = function () {
   var shuttingDown = false;
   // read the control for the client we'll be serving up