diff --git a/lib/ansible/runner/__init__.py b/lib/ansible/runner/__init__.py
index 6867699229..f9c91c4f41 100644
--- a/lib/ansible/runner/__init__.py
+++ b/lib/ansible/runner/__init__.py
@@ -648,7 +648,7 @@ class Runner(object):
         inject.update(host_variables)
         inject.update(self.module_vars)
 
-        conditional = utils.double_template(self.conditional, inject, self.setup_cache)
+        conditional = utils.template(self.conditional, inject, self.setup_cache)
         if not eval(conditional):
             result = utils.smjson(dict(skipped=True))
             self.callbacks.on_skipped(host)
diff --git a/lib/ansible/utils.py b/lib/ansible/utils.py
index a29f7ea254..fefdb87df1 100644
--- a/lib/ansible/utils.py
+++ b/lib/ansible/utils.py
@@ -265,7 +265,7 @@ def varReplace(raw, vars):
 
     return ''.join(done)
 
-def template(text, vars, setup_cache=None, no_engine=True):
+def _template(text, vars, setup_cache=None, no_engine=True):
     ''' run a text buffer through the templating engine '''
     vars = vars.copy()
     vars['hostvars'] = setup_cache
@@ -281,8 +281,14 @@ def template(text, vars, setup_cache=None, no_engine=True):
             res = res + '\n'
         return res
 
-def double_template(text, vars, setup_cache):
-    return template(template(text, vars, setup_cache), vars, setup_cache)
+def template(text, vars, setup_cache=None, no_engine=True):
+    ''' run a text buffer through the templating engine 
+        until it no longer changes '''
+    prev_text = ''
+    while prev_text != text:
+        prev_text = text
+        text = _template(text, vars, setup_cache, no_engine)
+    return text
 
 def template_from_file(path, vars, setup_cache, no_engine=True):
     ''' run a file through the templating engine '''
diff --git a/test/TestUtils.py b/test/TestUtils.py
index 006a687e8b..b83dcb0312 100644
--- a/test/TestUtils.py
+++ b/test/TestUtils.py
@@ -236,6 +236,17 @@ class TestUtils(unittest.TestCase):
 
         assert res == u'hello wórld'
 
+    def test_template_varReplace_iterated(self):
+        template = 'hello $who'
+        vars = {
+            'who': 'oh great $person',
+            'person': 'one',
+        }
+
+        res = ansible.utils.template(template, vars)
+
+        assert res == u'hello oh great one'
+
     #####################################
     ### key-value parsing