diff --git a/activerecord/lib/active_record/base.rb b/activerecord/lib/active_record/base.rb
index c84f1c7778..623e5a30e9 100755
--- a/activerecord/lib/active_record/base.rb
+++ b/activerecord/lib/active_record/base.rb
@@ -1522,25 +1522,29 @@ module ActiveRecord #:nodoc:
 
       # Turns this record into XML 
       def to_xml(options = {})
-        options[:root] ||= self.class.to_s.underscore
-        options[:except] = Array(options[:except]) << self.class.inheritance_column unless options[:only]
-        only_or_except   = { :only => options[:only], :except => options[:except] }
+        options[:root]    ||= self.class.to_s.underscore
+        options[:except]    = Array(options[:except]) << self.class.inheritance_column unless options[:only]
+        root_only_or_except = { :only => options[:only], :except => options[:except] }
 
-        attributes_for_xml = attributes(only_or_except)
+        attributes_for_xml = attributes(root_only_or_except)
         
         if include_associations = options.delete(:include)
-          for association in Array(include_associations)
+          include_has_options = include_associations.is_a?(Hash)
+          
+          for association in include_has_options ? include_associations.keys : Array(include_associations)
+            association_options = include_has_options ? include_associations[association] : root_only_or_except
+
             case self.class.reflect_on_association(association).macro
               when :has_many, :has_and_belongs_to_many
                 records = send(association).to_a
                 unless records.empty?
                   attributes_for_xml[association] = records.collect do |record| 
-                    record.attributes(only_or_except)
+                    record.attributes(association_options)
                   end
                 end
               when :has_one, :belongs_to
                 if record = send(association)
-                  attributes_for_xml[association] = record.attributes(only_or_except)
+                  attributes_for_xml[association] = record.attributes(association_options)
                 end
             end
           end
diff --git a/activerecord/test/base_test.rb b/activerecord/test/base_test.rb
index 3ad2d6e960..ba2c3130bf 100755
--- a/activerecord/test/base_test.rb
+++ b/activerecord/test/base_test.rb
@@ -1202,6 +1202,17 @@ class BasicsTest < Test::Unit::TestCase
     assert xml.include?(%(<account>))
     assert xml.include?(%(<clients><client>))
   end
+
+  def test_to_xml_including_multiple_associations_with_options
+    xml = companies(:first_firm).to_xml(
+      :indent  => 0, :skip_instruct => true, 
+      :include => { :clients => { :only => :name } }
+    )
+    
+    assert_equal "<firm>", xml.first(6)
+    assert xml.include?(%(<client><name>Summit</name></client>))
+    assert xml.include?(%(<clients><client>))
+  end
   
   def test_except_attributes
     assert_equal(