diff --git a/src/core/services/theming/theming.js b/src/core/services/theming/theming.js
index c378df9b3bc..3fe8fe42a1a 100644
--- a/src/core/services/theming/theming.js
+++ b/src/core/services/theming/theming.js
@@ -606,7 +606,7 @@ function ThemingProvider($mdColorPalette, $$mdMetaProvider) {
    */
 
   /* @ngInject */
-  function ThemingService($rootScope, $log) {
+  function ThemingService($rootScope, $mdUtil, $q, $log) {
         // Allow us to be invoked via a linking function signature.
     var applyTheme = function (scope, el) {
           if (el === undefined) { el = scope; scope = undefined; }
@@ -614,12 +614,45 @@ function ThemingProvider($mdColorPalette, $$mdMetaProvider) {
           applyTheme.inherit(el, el);
         };
 
-    applyTheme.THEMES = angular.extend({}, THEMES);
-    applyTheme.PALETTES = angular.extend({}, PALETTES);
+    Object.defineProperty(applyTheme, 'THEMES', {
+      get: function () {
+        return angular.extend({}, THEMES);
+      }
+    });
+    Object.defineProperty(applyTheme, 'PALETTES', {
+      get: function () {
+        return angular.extend({}, PALETTES);
+      }
+    });
     applyTheme.inherit = inheritTheme;
     applyTheme.registered = registered;
     applyTheme.defaultTheme = function() { return defaultTheme; };
     applyTheme.generateTheme = function(name) { generateTheme(THEMES[name], name, themeConfig.nonce); };
+    applyTheme.defineTheme = function(name, options) {
+      options = options || {};
+
+      var theme = registerTheme(name);
+
+      if (options.primary) {
+        theme.primaryPalette(options.primary);
+      }
+      if (options.accent) {
+        theme.accentPalette(options.accent);
+      }
+      if (options.warn) {
+        theme.warnPalette(options.warn);
+      }
+      if (options.background) {
+        theme.backgroundPalette(options.background);
+      }
+      if (options.dark){
+        theme.dark();
+      }
+
+      this.generateTheme(name);
+
+      return $q.resolve(name);
+    };
     applyTheme.setBrowserColor = enableBrowserColor;
 
     return applyTheme;
@@ -636,14 +669,24 @@ function ThemingProvider($mdColorPalette, $$mdMetaProvider) {
      * Get theme name for the element, then update with Theme CSS class
      */
     function inheritTheme (el, parent) {
-      var ctrl = parent.controller('mdTheme');
-      var attrThemeValue = el.attr('md-theme-watch');
-      var watchTheme = (alwaysWatchTheme || angular.isDefined(attrThemeValue)) && attrThemeValue != 'false';
+      var ctrl = parent.controller('mdTheme') || el.data('$mdThemeController');
 
       updateThemeClass(lookupThemeName());
 
-      if ((alwaysWatchTheme && !registerChangeCallback()) || (!alwaysWatchTheme && watchTheme)) {
-        el.on('$destroy', $rootScope.$watch(lookupThemeName, updateThemeClass) );
+      if (ctrl) {
+        var watchTheme =
+          alwaysWatchTheme || ctrl.$shouldWatch || $mdUtil.parseAttributeBoolean(el.attr('md-theme-watch'));
+
+        var unwatch = ctrl.registerChanges(function (name) {
+          updateThemeClass(name);
+
+          if (!watchTheme) {
+            unwatch();
+          }
+          else {
+            el.on('$destroy', unwatch);
+          }
+        });
       }
 
       /**
@@ -651,7 +694,6 @@ function ThemingProvider($mdColorPalette, $$mdMetaProvider) {
        */
       function lookupThemeName() {
         // As a few components (dialog) add their controllers later, we should also watch for a controller init.
-        ctrl = parent.controller('mdTheme') || el.data('$mdThemeController');
         return ctrl && ctrl.$mdTheme || (defaultTheme == 'default' ? '' : defaultTheme);
       }
 
@@ -674,24 +716,12 @@ function ThemingProvider($mdColorPalette, $$mdMetaProvider) {
           el.data('$mdThemeController', ctrl);
         }
       }
-
-      /**
-       * Register change callback with parent mdTheme controller
-       */
-      function registerChangeCallback() {
-        var parentController = parent.controller('mdTheme');
-        if (!parentController) return false;
-        el.on('$destroy', parentController.registerChanges( function() {
-          updateThemeClass(lookupThemeName());
-        }));
-        return true;
-      }
     }
 
   }
 }
 
-function ThemingDirective($mdTheming, $interpolate, $log) {
+function ThemingDirective($mdTheming, $interpolate, $parse, $mdUtil, $q, $log) {
   return {
     priority: 100,
     link: {
@@ -717,16 +747,39 @@ function ThemingDirective($mdTheming, $interpolate, $log) {
             if (!$mdTheming.registered(theme)) {
               $log.warn('attempted to use unregistered theme \'' + theme + '\'');
             }
+
+
             ctrl.$mdTheme = theme;
 
-            registeredCallbacks.forEach(function (cb) {
-              cb();
+            // Iterating backwards to support unregistering during iteration
+            // http://stackoverflow.com/a/9882349/890293
+            registeredCallbacks.reverse().forEach(function (cb) {
+              cb(theme);
             });
-          }
+          },
+          $shouldWatch: $mdUtil.parseAttributeBoolean(el.attr('md-theme-watch'))
         };
+
         el.data('$mdThemeController', ctrl);
-        ctrl.$setTheme($interpolate(attrs.mdTheme)(scope));
-        attrs.$observe('mdTheme', ctrl.$setTheme);
+
+        var getThemeInterpolation = function () { return $interpolate(attrs.mdTheme)(scope); };
+
+        var setParsedTheme = function (interpolation) {
+          var theme = $parse(interpolation)(scope) || interpolation;
+
+          if (typeof theme === 'string') {
+            return ctrl.$setTheme(theme);
+          }
+
+          $q.when( (typeof theme === 'function') ?  theme() : theme )
+            .then(function(name){
+              ctrl.$setTheme(name)
+            });
+        };
+
+        setParsedTheme(getThemeInterpolation());
+
+        scope.$watch(getThemeInterpolation, setParsedTheme);
       }
     }
   };
diff --git a/src/core/services/theming/theming.spec.js b/src/core/services/theming/theming.spec.js
index 3066421f444..a29b99ee6da 100644
--- a/src/core/services/theming/theming.spec.js
+++ b/src/core/services/theming/theming.spec.js
@@ -737,6 +737,17 @@ describe('$mdTheming service', function() {
     expect($mdTheming.defaultTheme()).toBe('default');
   }));
 
+  it('supports registering theme on the fly', inject(function ($mdTheming) {
+    expect($mdTheming.THEMES.hasOwnProperty('test')).toBeFalsy();
+
+    $mdTheming.defineTheme('test', {
+      primary: 'red',
+      warn: 'yellow'
+    });
+
+    expect($mdTheming.THEMES.hasOwnProperty('test')).toBeTruthy();
+  }));
+
   it('supports changing browser color on the fly', function() {
     var name = 'theme-color';
     var primaryPalette = $mdThemingProvider._THEMES.default.colors.primary.name;
@@ -758,7 +769,7 @@ describe('$mdTheming service', function() {
 describe('md-theme directive', function() {
   beforeEach(module('material.core'));
 
-  it('should observe and set mdTheme controller', inject(function($compile, $rootScope) {
+  it('should watch and set mdTheme controller', inject(function($compile, $rootScope) {
     $rootScope.themey = 'red';
     var el = $compile('<div md-theme="{{themey}}">')($rootScope);
     $rootScope.$apply();
@@ -768,23 +779,48 @@ describe('md-theme directive', function() {
     expect(ctrl.$mdTheme).toBe('blue');
   }));
 
-  it('warns when an unregistered theme is used', function() {
-    inject(function($log, $compile, $rootScope) {
-      spyOn($log, 'warn');
-      $compile('<div md-theme="unregistered"></div>')($rootScope);
-      $rootScope.$apply();
-      expect($log.warn).toHaveBeenCalled();
-    });
-  });
+  it('warns when an unregistered theme is used', inject(function ($log, $compile, $rootScope) {
+    spyOn($log, 'warn');
+    $compile('<div md-theme="unregistered"></div>')($rootScope);
+    $rootScope.$apply();
+    expect($log.warn).toHaveBeenCalled();
+  }));
+
+  it('does not warn when a registered theme is used', inject(function($log, $compile, $rootScope) {
+    spyOn($log, 'warn');
+    $compile('<div md-theme="default"></div>')($rootScope);
+    $rootScope.$apply();
+    expect($log.warn.calls.count()).toBe(0);
+  }));
 
-  it('does not warn when a registered theme is used', function() {
-    inject(function($log, $compile, $rootScope) {
-      spyOn($log, 'warn');
-      $compile('<div md-theme="default"></div>')($rootScope);
+  it('should accept string as a theme', inject(function($compile, $rootScope, $mdTheming) {
+    var el = $compile('<div md-theme="red"></div>')($rootScope);
+    $rootScope.$apply();
+    $mdTheming(el);
+    expect(el.hasClass('md-default-theme')).toBeFalsy();
+    expect(el.hasClass('md-red-theme')).toBeTruthy();
+  }));
+
+  it('should accept $q promise as a theme', inject(function($compile, $rootScope, $q, $mdTheming) {
+    $rootScope.promise = $mdTheming.defineTheme('red', { primary: 'red' });
+    var el = $compile('<div md-theme="promise"></div>')($rootScope);
+    $mdTheming(el);
+    $rootScope.$apply();
+    expect(el.hasClass('md-default-theme')).toBeFalsy();
+    expect(el.hasClass('md-red-theme')).toBeTruthy();
+  }));
+
+  it('should accept a function that returns a promise as a theme',
+    inject(function ($compile, $rootScope, $q, $mdTheming) {
+      $rootScope.func = function () {
+        return $mdTheming.defineTheme('red', {primary: 'red'});
+      };
+      var el = $compile('<div md-theme="func"></div>')($rootScope);
+      $mdTheming(el);
       $rootScope.$apply();
-      expect($log.warn.calls.count()).toBe(0);
-    });
-  });
+      expect(el.hasClass('md-default-theme')).toBeFalsy();
+      expect(el.hasClass('md-red-theme')).toBeTruthy();
+    }));
 });
 
 describe('md-themable directive', function() {