diff --git a/activerecord/lib/active_record/base.rb b/activerecord/lib/active_record/base.rb
index 2c162a6fc812c5fd343b4cedea0f553f1df3dbbf..4136868b39c140501b556d91c660d61c0569a534 100644
--- a/activerecord/lib/active_record/base.rb
+++ b/activerecord/lib/active_record/base.rb
@@ -504,8 +504,7 @@ def create(attributes = nil, options = {}, &block)
         if attributes.is_a?(Array)
           attributes.collect { |attr| create(attr, options, &block) }
         else
-          object = new(attributes, options)
-          yield(object) if block_given?
+          object = new(attributes, options, &block)
           object.save
           object
         end
diff --git a/activerecord/test/cases/base_test.rb b/activerecord/test/cases/base_test.rb
index 8b4e7dd799788490d7c84e20babe6d0bc4a57718..f2f5b736261b00c900be938b9db0b1f57f21ec6e 100644
--- a/activerecord/test/cases/base_test.rb
+++ b/activerecord/test/cases/base_test.rb
@@ -21,6 +21,7 @@
 require 'models/person'
 require 'models/edge'
 require 'models/joke'
+require 'models/bulb'
 require 'rexml/document'
 require 'active_support/core_ext/exception'
 
@@ -260,6 +261,18 @@ def test_initialize_with_invalid_attribute
     end
   end
 
+  def test_create_after_initialize_without_block
+    cb = CustomBulb.create(:name => 'Dude')
+    assert_equal('Dude', cb.name)
+    assert_equal(true, cb.frickinawesome)
+  end
+
+  def test_create_after_initialize_with_block
+    cb = CustomBulb.create {|c| c.name = 'Dude' }
+    assert_equal('Dude', cb.name)
+    assert_equal(true, cb.frickinawesome)
+  end
+
   def test_load
     topics = Topic.find(:all, :order => 'id')
     assert_equal(4, topics.size)
diff --git a/activerecord/test/models/bulb.rb b/activerecord/test/models/bulb.rb
index efb98b66e76c1ee1f078dc34909625db052146bd..888afc7604d27c015c48b9bbb9041c1d84479549 100644
--- a/activerecord/test/models/bulb.rb
+++ b/activerecord/test/models/bulb.rb
@@ -33,4 +33,9 @@ def self.new(attributes = {}, options = {}, &block)
 end
 
 class CustomBulb < Bulb
+  after_initialize :set_awesomeness
+
+  def set_awesomeness
+    self.frickinawesome = true if name == 'Dude'
+  end
 end