diff --git a/railties/lib/generators/rails/observer/USAGE b/railties/lib/generators/rails/observer/USAGE
new file mode 100644
index 0000000000000000000000000000000000000000..fca4907ca6ed08a86dcbe9b4d598f988961b4ffa
--- /dev/null
+++ b/railties/lib/generators/rails/observer/USAGE
@@ -0,0 +1,13 @@
+Description:
+    Stubs out a new observer. Pass the observer name, either CamelCased or
+    under_scored, as an argument.
+
+    The generator creates an observer class in app/models and a unit test in
+    the configured test framework.
+
+Example:
+    `./script/generate observer Account`
+
+    creates an Account observer and invoke the test framework:
+        Observer:   app/models/account_observer.rb
+        TestUnit:   test/unit/account_observer_test.rb
diff --git a/railties/lib/generators/rails/observer/observer_generator.rb b/railties/lib/generators/rails/observer/observer_generator.rb
new file mode 100644
index 0000000000000000000000000000000000000000..9a5253a0ad99b582769f0c46f792f898cc8af35c
--- /dev/null
+++ b/railties/lib/generators/rails/observer/observer_generator.rb
@@ -0,0 +1,14 @@
+module Rails
+  module Generators
+    class ObserverGenerator < NamedBase
+      # TODO Check class collisions
+      # class_collisions "#{class_name}Observer", "#{class_name}ObserverTest"
+
+      def create_observer_file
+        template 'observer.rb', File.join('app/models', class_path, "#{file_name}_observer.rb")
+      end
+
+      add_and_invoke_test_framework_option!
+    end
+  end
+end
diff --git a/railties/lib/generators/rails/observer/templates/observer.rb b/railties/lib/generators/rails/observer/templates/observer.rb
new file mode 100644
index 0000000000000000000000000000000000000000..b9a3004161a1a297058d0772477ae6216eb97c4c
--- /dev/null
+++ b/railties/lib/generators/rails/observer/templates/observer.rb
@@ -0,0 +1,2 @@
+class <%= class_name %>Observer < ActiveRecord::Observer
+end
diff --git a/railties/lib/generators/rails/plugin/plugin_generator.rb b/railties/lib/generators/rails/plugin/plugin_generator.rb
index 58079fa5c9ec180f53c5cca4af72f557bdd2cb8a..eb36cea0f11e0218ca4b451e5e7556f3a178f02a 100644
--- a/railties/lib/generators/rails/plugin/plugin_generator.rb
+++ b/railties/lib/generators/rails/plugin/plugin_generator.rb
@@ -8,6 +8,7 @@ class PluginGenerator < NamedBase
                                     :desc => "When supplied creates generator base files."
 
       # TODO Check class collision
+      # class_collision class_name
 
       def create_root
         self.root = File.expand_path("vendor/plugins/#{file_name}", root)
diff --git a/railties/lib/generators/test_unit/observer/observer_generator.rb b/railties/lib/generators/test_unit/observer/observer_generator.rb
new file mode 100644
index 0000000000000000000000000000000000000000..1f0613007be8fa474eead408aa500568ba6e505f
--- /dev/null
+++ b/railties/lib/generators/test_unit/observer/observer_generator.rb
@@ -0,0 +1,14 @@
+module TestUnit
+  module Generators
+    class ObserverGenerator < Base
+      desc <<DESC
+Description:
+    Create TestUnit files for observer generator.
+DESC
+
+      def create_test_files
+        template 'unit_test.rb',  File.join('test', 'unit', class_path, "#{file_name}_observer_test.rb")
+      end
+    end
+  end
+end
diff --git a/railties/lib/generators/test_unit/observer/templates/unit_test.rb b/railties/lib/generators/test_unit/observer/templates/unit_test.rb
new file mode 100644
index 0000000000000000000000000000000000000000..03f6d5666e557f2292a243d0ae11d22512d3b3f2
--- /dev/null
+++ b/railties/lib/generators/test_unit/observer/templates/unit_test.rb
@@ -0,0 +1,8 @@
+require 'test_helper'
+
+class <%= class_name %>ObserverTest < ActiveSupport::TestCase
+  # Replace this with your real tests.
+  test "the truth" do
+    assert true
+  end
+end
diff --git a/railties/test/generators/observer_generator_test.rb b/railties/test/generators/observer_generator_test.rb
new file mode 100644
index 0000000000000000000000000000000000000000..85c95c9dc7632ab428f1adaa1b216d634dd398a4
--- /dev/null
+++ b/railties/test/generators/observer_generator_test.rb
@@ -0,0 +1,34 @@
+require 'abstract_unit'
+require 'generators/generators_test_helper'
+require 'generators/rails/observer/observer_generator'
+require 'generators/test_unit/observer/observer_generator'
+
+class ObserverGeneratorTest < GeneratorsTestCase
+
+  def test_observer_skeleton_is_created
+    run_generator
+    assert_file "app/models/account_observer.rb", /class AccountObserver < ActiveRecord::Observer/
+  end
+
+  def test_observer_with_class_path_skeleton_is_created
+    run_generator ["admin/account"]
+    assert_file "app/models/admin/account_observer.rb", /class Admin::AccountObserver < ActiveRecord::Observer/
+  end
+
+  def test_invokes_default_test_framework
+    run_generator
+    assert_file "test/unit/account_observer_test.rb"
+  end
+
+  def test_logs_if_the_test_framework_cannot_be_found
+    content = run_generator ["account", "--test-framework=unknown"]
+    assert_match /Could not find and invoke 'unknown:generators:observer'/, content
+  end
+
+  protected
+
+    def run_generator(args=["account"])
+      silence(:stdout) { Rails::Generators::ObserverGenerator.start args, :root => destination_root }
+    end
+
+end