diff --git a/packages/spacebars-compiler/codegen.js b/packages/spacebars-compiler/codegen.js
index 4a4d1a41f9..f6ac43a820 100644
--- a/packages/spacebars-compiler/codegen.js
+++ b/packages/spacebars-compiler/codegen.js
@@ -7,10 +7,10 @@
 var CodeGen = SpacebarsCompiler.CodeGen = function () {};
 
 var builtInBlockHelpers = SpacebarsCompiler._builtInBlockHelpers = {
-  'if': 'UI.If',
-  'unless': 'UI.Unless',
-  'with': 'Spacebars.With',
-  'each': 'UI.Each'
+  'if': 'Blaze.If',
+  'unless': 'Blaze.Unless',
+  'with': 'Spacebars.With2',
+  'each': 'Spacebars.Each'
 };
 
 // These must be prefixed with `UI.` when you use them in a template.
@@ -36,80 +36,89 @@ _.extend(CodeGen.prototype, {
   codeGenTemplateTag: function (tag) {
     var self = this;
     if (tag.position === HTMLTools.TEMPLATE_TAG_POSITION.IN_START_TAG) {
+      // Special dynamic attributes: `<div {{attrs}}>...`
       // only `tag.type === 'DOUBLE'` allowed (by earlier validation)
-      return BlazeTools.EmitCode('function () { return ' +
-                                 self.codeGenMustache(tag.path, tag.args, 'attrMustache')
-                                 + '; }');
+      return BlazeTools.EmitCode(
+        'Blaze.Var(function () { return ' +
+          self.codeGenMustache(tag.path, tag.args, 'attrMustache')
+          + '; })');
     } else {
       if (tag.type === 'DOUBLE') {
-        return BlazeTools.EmitCode('function () { return ' +
-                                   self.codeGenMustache(tag.path, tag.args) + '; }');
+        return BlazeTools.EmitCode('Blaze.Isolate(function () { return ' +
+                                   self.codeGenMustache(tag.path, tag.args) + '; })');
       } else if (tag.type === 'TRIPLE') {
-        return BlazeTools.EmitCode('function () { return Spacebars.makeRaw(' +
-                                   self.codeGenMustache(tag.path, tag.args) + '); }');
+        return BlazeTools.EmitCode('Blaze.Isolate(function () { return Spacebars.makeRaw(' +
+                                   self.codeGenMustache(tag.path, tag.args) + '); })');
       } else if (tag.type === 'INCLUSION' || tag.type === 'BLOCKOPEN') {
         var path = tag.path;
-        
+
         if (tag.type === 'BLOCKOPEN' &&
             builtInBlockHelpers.hasOwnProperty(path[0])) {
           // if, unless, with, each.
           //
           // If someone tries to do `{{> if}}`, we don't
           // get here, but an error is thrown when we try to codegen the path.
-          
+
           // Note: If we caught these errors earlier, while scanning, we'd be able to
           // provide nice line numbers.
           if (path.length > 1)
             throw new Error("Unexpected dotted path beginning with " + path[0]);
           if (! tag.args.length)
             throw new Error("#" + path[0] + " requires an argument");
-          
-          var codeParts = self.codeGenInclusionParts(tag);
-          var dataFunc = codeParts.dataFunc; // must exist (tag.args.length > 0)
-          var contentBlock = codeParts.content; // must exist
-          var elseContentBlock = codeParts.elseContent; // may not exist
-          
-          var callArgs = [dataFunc, contentBlock];
+
+          // `args` must exist (tag.args.length > 0)
+          var dataCode = self.codeGenInclusionArgs(tag.args);
+          // `content` must exist
+          var contentBlock = (('content' in tag) ?
+                              self.codeGenBlock(tag.content) : null);
+          // `elseContent` may not exist
+          var elseContentBlock = (('elseContent' in tag) ?
+                                  self.codeGenBlock(tag.elseContent) : null);
+
+          var callArgs = ['function () { return ' + dataCode + '; }',
+                          contentBlock];
           if (elseContentBlock)
             callArgs.push(elseContentBlock);
-          
+
           return BlazeTools.EmitCode(
             builtInBlockHelpers[path[0]] + '(' + callArgs.join(', ') + ')');
-          
+
         } else {
           var compCode = self.codeGenPath(path, {lookupTemplate: true});
-          
+
           if (path.length !== 1) {
             // path code may be reactive; wrap it
             compCode = 'function () { return ' + compCode + '; }';
           }
-          
-          var codeParts = self.codeGenInclusionParts(tag);
-          var dataFunc = codeParts.dataFunc;
-          var content = codeParts.content;
-          var elseContent = codeParts.elseContent;
-          
+
+          var dataCode = self.codeGenInclusionArgs(tag.args);
+          var content = (('content' in tag) ?
+                         self.codeGenBlock(tag.content) : null);
+          var elseContent = (('elseContent' in tag) ?
+                             self.codeGenBlock(tag.elseContent) : null);
+
           var includeArgs = [compCode];
           if (content) {
             includeArgs.push(content);
             if (elseContent)
               includeArgs.push(elseContent);
           }
-          
+
           var includeCode =
                 'Spacebars.include(' + includeArgs.join(', ') + ')';
-          
-          if (dataFunc) {
+
+          if (dataCode) {
             includeCode =
-              'Spacebars.TemplateWith(' + dataFunc + ', UI.block(' +
+              'Spacebars.TemplateWith(function () { return ' +
+              dataCode + '; }, UI.block(' +
               SpacebarsCompiler.codeGen(BlazeTools.EmitCode(includeCode)) + '))';
           }
-          
+
           if (path[0] === 'UI' &&
               (path[1] === 'contentBlock' || path[1] === 'elseBlock')) {
             includeCode = 'UI.InTemplateScope(template, ' + includeCode + ')';
           }
-          
+
           return BlazeTools.EmitCode(includeCode);
         }
       } else {
@@ -147,11 +156,11 @@ _.extend(CodeGen.prototype, {
       return builtInLexicals[path[1]];
     }
 
-    var args = [BlazeTools.toJSLiteral(path[0])];
+    var args = [BlazeTools.toJSLiteral(path[0]), 'self2'];
     var lookupMethod = 'lookup';
     if (opts && opts.lookupTemplate && path.length === 1)
       lookupMethod = 'lookupTemplate';
-    var code = 'self.' + lookupMethod + '(' + args.join(', ') + ')';
+    var code = 'Blaze.' + lookupMethod + '(' + args.join(', ') + ')';
 
     if (path.length > 1) {
       code = 'Spacebars.dot(' + code + ', ' +
@@ -168,7 +177,7 @@ _.extend(CodeGen.prototype, {
   // more than one element) and is not wrapped in a closure.
   codeGenArgValue: function (arg) {
     var self = this;
-    
+
     var argType = arg[0];
     var argValue = arg[1];
 
@@ -196,7 +205,7 @@ _.extend(CodeGen.prototype, {
   // one for fine-grained reactivity.
   codeGenMustache: function (path, args, mustacheType) {
     var self = this;
-    
+
     var nameCode = self.codeGenPath(path);
     var argCode = self.codeGenMustacheArgs(args);
     var mustache = (mustacheType || 'mustache');
@@ -209,7 +218,7 @@ _.extend(CodeGen.prototype, {
   // args at all.
   codeGenMustacheArgs: function (tagArgs) {
     var self = this;
-    
+
     var kwArgs = null; // source -> source
     var args = null; // [source]
 
@@ -237,6 +246,10 @@ _.extend(CodeGen.prototype, {
     return args;
   },
 
+  codeGenBlock: function (content) {
+    return SpacebarsCompiler.codeGen(content);
+  },
+
   // Takes an inclusion tag and returns an object containing these properties,
   // all optional, whose values are JS source code:
   //
@@ -245,25 +258,14 @@ _.extend(CodeGen.prototype, {
   // - `elseContent` - source code of an elseContent block
   //
   // Implements the calling convention for inclusions.
-  codeGenInclusionParts: function (tag) {
+  codeGenInclusionArgs: function (args) {
     var self = this;
-    var ret = {};
-
-    if ('content' in tag) {
-      ret.content = (
-        'UI.block(' + SpacebarsCompiler.codeGen(tag.content) + ')');
-    }
-    if ('elseContent' in tag) {
-      ret.elseContent = (
-        'UI.block(' + SpacebarsCompiler.codeGen(tag.elseContent) + ')');
-    }
 
     var dataFuncCode = null;
 
-    var args = tag.args;
     if (! args.length) {
       // e.g. `{{#foo}}`
-      return ret;
+      return null;
     } else if (args[0].length === 3) {
       // keyword arguments only, e.g. `{{> point x=1 y=2}}`
       var dataProps = {};
@@ -288,9 +290,7 @@ _.extend(CodeGen.prototype, {
                                           'dataMustache');
     }
 
-    ret.dataFunc = 'function () { return ' + dataFuncCode + '; }';
-
-    return ret;
+    return dataFuncCode;
   }
-  
+
 });
diff --git a/packages/spacebars-compiler/codegen2.js b/packages/spacebars-compiler/codegen2.js
deleted file mode 100644
index 3c563b6d71..0000000000
--- a/packages/spacebars-compiler/codegen2.js
+++ /dev/null
@@ -1,296 +0,0 @@
-// ============================================================
-// Code-generation of template tags
-
-// The `CodeGen` class currently has no instance state, but in theory
-// it could be useful to track per-function state, like whether we
-// need to emit `var self = this` or not.
-var CodeGen2 = SpacebarsCompiler.CodeGen2 = function () {};
-
-var builtInBlockHelpers = SpacebarsCompiler._builtInBlockHelpers = {
-  'if': 'Blaze.If',
-  'unless': 'Blaze.Unless',
-  'with': 'Spacebars.With2',
-  'each': 'Spacebars.Each'
-};
-
-// These must be prefixed with `UI.` when you use them in a template.
-var builtInLexicals = SpacebarsCompiler._builtInLexicals = {
-  'contentBlock': 'template.__content',
-  'elseBlock': 'template.__elseContent'
-};
-
-// A "reserved name" can't be used as a <template> name.  This
-// function is used by the template file scanner.
-SpacebarsCompiler.isReservedName = function (name) {
-  return builtInBlockHelpers.hasOwnProperty(name);
-};
-
-var makeObjectLiteral = function (obj) {
-  var parts = [];
-  for (var k in obj)
-    parts.push(BlazeTools.toObjectLiteralKey(k) + ': ' + obj[k]);
-  return '{' + parts.join(', ') + '}';
-};
-
-_.extend(CodeGen2.prototype, {
-  codeGenTemplateTag: function (tag) {
-    var self = this;
-    if (tag.position === HTMLTools.TEMPLATE_TAG_POSITION.IN_START_TAG) {
-      // Special dynamic attributes: `<div {{attrs}}>...`
-      // only `tag.type === 'DOUBLE'` allowed (by earlier validation)
-      return BlazeTools.EmitCode(
-        'Blaze.Var(function () { return ' +
-          self.codeGenMustache(tag.path, tag.args, 'attrMustache')
-          + '; })');
-    } else {
-      if (tag.type === 'DOUBLE') {
-        return BlazeTools.EmitCode('Blaze.Isolate(function () { return ' +
-                                   self.codeGenMustache(tag.path, tag.args) + '; })');
-      } else if (tag.type === 'TRIPLE') {
-        return BlazeTools.EmitCode('Blaze.Isolate(function () { return Spacebars.makeRaw(' +
-                                   self.codeGenMustache(tag.path, tag.args) + '); })');
-      } else if (tag.type === 'INCLUSION' || tag.type === 'BLOCKOPEN') {
-        var path = tag.path;
-
-        if (tag.type === 'BLOCKOPEN' &&
-            builtInBlockHelpers.hasOwnProperty(path[0])) {
-          // if, unless, with, each.
-          //
-          // If someone tries to do `{{> if}}`, we don't
-          // get here, but an error is thrown when we try to codegen the path.
-
-          // Note: If we caught these errors earlier, while scanning, we'd be able to
-          // provide nice line numbers.
-          if (path.length > 1)
-            throw new Error("Unexpected dotted path beginning with " + path[0]);
-          if (! tag.args.length)
-            throw new Error("#" + path[0] + " requires an argument");
-
-          // `args` must exist (tag.args.length > 0)
-          var dataCode = self.codeGenInclusionArgs(tag.args);
-          // `content` must exist
-          var contentBlock = (('content' in tag) ?
-                              self.codeGenBlock(tag.content) : null);
-          // `elseContent` may not exist
-          var elseContentBlock = (('elseContent' in tag) ?
-                                  self.codeGenBlock(tag.elseContent) : null);
-
-          var callArgs = ['function () { return ' + dataCode + '; }',
-                          contentBlock];
-          if (elseContentBlock)
-            callArgs.push(elseContentBlock);
-
-          return BlazeTools.EmitCode(
-            builtInBlockHelpers[path[0]] + '(' + callArgs.join(', ') + ')');
-
-        } else {
-          var compCode = self.codeGenPath(path, {lookupTemplate: true});
-
-          if (path.length !== 1) {
-            // path code may be reactive; wrap it
-            compCode = 'function () { return ' + compCode + '; }';
-          }
-
-          var dataCode = self.codeGenInclusionArgs(tag.args);
-          var content = (('content' in tag) ?
-                         self.codeGenBlock(tag.content) : null);
-          var elseContent = (('elseContent' in tag) ?
-                             self.codeGenBlock(tag.elseContent) : null);
-
-          var includeArgs = [compCode];
-          if (content) {
-            includeArgs.push(content);
-            if (elseContent)
-              includeArgs.push(elseContent);
-          }
-
-          var includeCode =
-                'Spacebars.include(' + includeArgs.join(', ') + ')';
-
-          if (dataCode) {
-            includeCode =
-              'Spacebars.TemplateWith(function () { return ' +
-              dataCode + '; }, UI.block(' +
-              SpacebarsCompiler.codeGen(BlazeTools.EmitCode(includeCode)) + '))';
-          }
-
-          if (path[0] === 'UI' &&
-              (path[1] === 'contentBlock' || path[1] === 'elseBlock')) {
-            includeCode = 'UI.InTemplateScope(template, ' + includeCode + ')';
-          }
-
-          return BlazeTools.EmitCode(includeCode);
-        }
-      } else {
-        // Can't get here; TemplateTag validation should catch any
-        // inappropriate tag types that might come out of the parser.
-        throw new Error("Unexpected template tag type: " + tag.type);
-      }
-    }
-  },
-
-  // `path` is an array of at least one string.
-  //
-  // If `path.length > 1`, the generated code may be reactive
-  // (i.e. it may invalidate the current computation).
-  //
-  // No code is generated to call the result if it's a function.
-  //
-  // Options:
-  //
-  // - lookupTemplate {Boolean} If true, generated code also looks in
-  //   the list of templates. (After helpers, before data context).
-  //   Used when generating code for `{{> foo}}` or `{{#foo}}`. Only
-  //   used for non-dotted paths.
-  codeGenPath: function (path, opts) {
-    if (builtInBlockHelpers.hasOwnProperty(path[0]))
-      throw new Error("Can't use the built-in '" + path[0] + "' here");
-    // Let `{{#if UI.contentBlock}}` check whether this template was invoked via
-    // inclusion or as a block helper, in addition to supporting
-    // `{{> UI.contentBlock}}`.
-    if (path.length >= 2 &&
-        path[0] === 'UI' && builtInLexicals.hasOwnProperty(path[1])) {
-      if (path.length > 2)
-        throw new Error("Unexpected dotted path beginning with " +
-                        path[0] + '.' + path[1]);
-      return builtInLexicals[path[1]];
-    }
-
-    var args = [BlazeTools.toJSLiteral(path[0]), 'self2'];
-    var lookupMethod = 'lookup';
-    if (opts && opts.lookupTemplate && path.length === 1)
-      lookupMethod = 'lookupTemplate';
-    var code = 'Blaze.' + lookupMethod + '(' + args.join(', ') + ')';
-
-    if (path.length > 1) {
-      code = 'Spacebars.dot(' + code + ', ' +
-        _.map(path.slice(1), BlazeTools.toJSLiteral).join(', ') + ')';
-    }
-
-    return code;
-  },
-
-  // Generates code for an `[argType, argValue]` argument spec,
-  // ignoring the third element (keyword argument name) if present.
-  //
-  // The resulting code may be reactive (in the case of a PATH of
-  // more than one element) and is not wrapped in a closure.
-  codeGenArgValue: function (arg) {
-    var self = this;
-
-    var argType = arg[0];
-    var argValue = arg[1];
-
-    var argCode;
-    switch (argType) {
-    case 'STRING':
-    case 'NUMBER':
-    case 'BOOLEAN':
-    case 'NULL':
-      argCode = BlazeTools.toJSLiteral(argValue);
-      break;
-    case 'PATH':
-      argCode = self.codeGenPath(argValue);
-      break;
-    default:
-      // can't get here
-      throw new Error("Unexpected arg type: " + argType);
-    }
-
-    return argCode;
-  },
-
-  // Generates a call to `Spacebars.fooMustache` on evaluated arguments.
-  // The resulting code has no function literals and must be wrapped in
-  // one for fine-grained reactivity.
-  codeGenMustache: function (path, args, mustacheType) {
-    var self = this;
-
-    var nameCode = self.codeGenPath(path);
-    var argCode = self.codeGenMustacheArgs(args);
-    var mustache = (mustacheType || 'mustache');
-
-    return 'Spacebars.' + mustache + '(' + nameCode +
-      (argCode ? ', ' + argCode.join(', ') : '') + ')';
-  },
-
-  // returns: array of source strings, or null if no
-  // args at all.
-  codeGenMustacheArgs: function (tagArgs) {
-    var self = this;
-
-    var kwArgs = null; // source -> source
-    var args = null; // [source]
-
-    // tagArgs may be null
-    _.each(tagArgs, function (arg) {
-      var argCode = self.codeGenArgValue(arg);
-
-      if (arg.length > 2) {
-        // keyword argument (represented as [type, value, name])
-        kwArgs = (kwArgs || {});
-        kwArgs[arg[2]] = argCode;
-      } else {
-        // positional argument
-        args = (args || []);
-        args.push(argCode);
-      }
-    });
-
-    // put kwArgs in options dictionary at end of args
-    if (kwArgs) {
-      args = (args || []);
-      args.push('Spacebars.kw(' + makeObjectLiteral(kwArgs) + ')');
-    }
-
-    return args;
-  },
-
-  codeGenBlock: function (content) {
-    return SpacebarsCompiler.codeGen(content, {codegen2: true});
-  },
-
-  // Takes an inclusion tag and returns an object containing these properties,
-  // all optional, whose values are JS source code:
-  //
-  // - `dataFunc` - source code of a data function literal
-  // - `content` - source code of a content block
-  // - `elseContent` - source code of an elseContent block
-  //
-  // Implements the calling convention for inclusions.
-  codeGenInclusionArgs: function (args) {
-    var self = this;
-
-    var dataFuncCode = null;
-
-    if (! args.length) {
-      // e.g. `{{#foo}}`
-      return null;
-    } else if (args[0].length === 3) {
-      // keyword arguments only, e.g. `{{> point x=1 y=2}}`
-      var dataProps = {};
-      _.each(args, function (arg) {
-        var argKey = arg[2];
-        dataProps[argKey] = 'Spacebars.call(' + self.codeGenArgValue(arg) + ')';
-      });
-      dataFuncCode = makeObjectLiteral(dataProps);
-    } else if (args[0][0] !== 'PATH') {
-      // literal first argument, e.g. `{{> foo "blah"}}`
-      //
-      // tag validation has confirmed, in this case, that there is only
-      // one argument (`args.length === 1`)
-      dataFuncCode = self.codeGenArgValue(args[0]);
-    } else if (args.length === 1) {
-      // one argument, must be a PATH
-      dataFuncCode = 'Spacebars.call(' + self.codeGenPath(args[0][1]) + ')';
-    } else {
-      // Multiple positional arguments; treat them as a nested
-      // "data mustache"
-      dataFuncCode = self.codeGenMustache(args[0][1], args.slice(1),
-                                          'dataMustache');
-    }
-
-    return dataFuncCode;
-  }
-
-});
diff --git a/packages/spacebars-compiler/compiler.js b/packages/spacebars-compiler/compiler.js
index ee33aaf35d..5b3ec23562 100644
--- a/packages/spacebars-compiler/compiler.js
+++ b/packages/spacebars-compiler/compiler.js
@@ -44,9 +44,7 @@ SpacebarsCompiler.codeGen = function (parseTree, options) {
     tree = SpacebarsCompiler.optimize(tree);
   }
 
-  var codegen = ((options && options.codegen2) ?
-                 new SpacebarsCompiler.CodeGen2 :
-                 new SpacebarsCompiler.CodeGen);
+  var codegen = new SpacebarsCompiler.CodeGen;
   tree = (new SpacebarsCompiler._TemplateTagReplacer(
     {codegen: codegen})).visit(tree);
 
diff --git a/packages/spacebars-compiler/package.js b/packages/spacebars-compiler/package.js
index e5404a6fac..b18fc8cfca 100644
--- a/packages/spacebars-compiler/package.js
+++ b/packages/spacebars-compiler/package.js
@@ -18,7 +18,6 @@ Package.on_use(function (api) {
   api.add_files(['templatetag.js',
                  'optimizer.js',
                  'codegen.js',
-                 'codegen2.js',
                  'compiler.js']);
 });
 
diff --git a/packages/templating/plugin/html_scanner.js b/packages/templating/plugin/html_scanner.js
index 71c44197e9..4ca8f0276b 100644
--- a/packages/templating/plugin/html_scanner.js
+++ b/packages/templating/plugin/html_scanner.js
@@ -158,8 +158,7 @@ html_scanner = {
         var renderFuncCode = SpacebarsCompiler.compile(
           contents, {
             isTemplate: true,
-            sourceName: 'Template "' + name + '"',
-            codegen2: true
+            sourceName: 'Template "' + name + '"'
           });
 
         results.js += "\nTemplate.__define__(" + JSON.stringify(name) +
@@ -172,8 +171,7 @@ html_scanner = {
         var renderFuncCode = SpacebarsCompiler.compile(
           contents, {
             isBody: true,
-            sourceName: "<body>",
-            codegen2: true
+            sourceName: "<body>"
           });
 
         // We may be one of many `<body>` tags.
diff --git a/packages/webapp/webapp_server.js b/packages/webapp/webapp_server.js
index 0929326154..4bbdb6900d 100644
--- a/packages/webapp/webapp_server.js
+++ b/packages/webapp/webapp_server.js
@@ -619,7 +619,7 @@ var runWebAppServer = function () {
 
     var boilerplateTemplateSource = Assets.getText("boilerplate.html");
     var boilerplateRenderCode = SpacebarsCompiler.compile(
-      boilerplateTemplateSource, { isBody: true, codegen2: true });
+      boilerplateTemplateSource, { isBody: true });
 
     // Note that we are actually depending on eval's local environment capture
     // so that UI and HTML are visible to the eval'd code.