diff --git a/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBean.java b/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBean.java
index aa85f33a2..bf537c2e6 100644
--- a/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBean.java
+++ b/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBean.java
@@ -16,13 +16,6 @@
 
 package org.springframework.batch.core.configuration.xml;
 
-import java.util.Collection;
-import java.util.HashMap;
-import java.util.HashSet;
-import java.util.LinkedHashSet;
-import java.util.Map;
-import java.util.Set;
-
 import org.springframework.batch.core.ChunkListener;
 import org.springframework.batch.core.ItemProcessListener;
 import org.springframework.batch.core.ItemReadListener;
@@ -76,6 +69,13 @@ import org.springframework.transaction.annotation.Propagation;
 import org.springframework.transaction.interceptor.DefaultTransactionAttribute;
 import org.springframework.util.Assert;
 
+import java.util.Collection;
+import java.util.HashMap;
+import java.util.HashSet;
+import java.util.LinkedHashSet;
+import java.util.Map;
+import java.util.Set;
+
 /**
  * This {@link FactoryBean} is used by the batch namespace parser to create {@link Step} objects. Stores all of the
  * properties that are configurable on the <step/> (and its inner <tasklet/>). Based on which properties are
@@ -312,6 +312,10 @@ class StepParserStepFactoryBean<I, O> implements FactoryBean, BeanNameAware {
 			builder.processorNonTransactional();
 		}
 
+		if (readerTransactionalQueue!=null && readerTransactionalQueue==true) {
+			builder.readerIsTransactionalQueue();
+		}
+
 		for (SkipListener<I, O> listener : skipListeners) {
 			builder.listener(listener);
 		}
diff --git a/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBeanTests.java b/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBeanTests.java
index 8c02fe0bb..c04023398 100644
--- a/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBeanTests.java
+++ b/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/StepParserStepFactoryBeanTests.java
@@ -16,12 +16,6 @@
 
 package org.springframework.batch.core.configuration.xml;
 
-import static org.junit.Assert.assertEquals;
-import static org.junit.Assert.assertTrue;
-
-import java.util.HashMap;
-import java.util.Map;
-
 import org.junit.Test;
 import org.springframework.aop.framework.Advised;
 import org.springframework.aop.framework.ProxyFactory;
@@ -50,6 +44,13 @@ import org.springframework.test.util.ReflectionTestUtils;
 import org.springframework.transaction.annotation.Isolation;
 import org.springframework.transaction.annotation.Propagation;
 
+import java.util.HashMap;
+import java.util.Map;
+
+import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertTrue;
+import static org.junit.Assert.assertFalse;
+
 /**
  * @author Dan Garrette
  * @since 2.0
@@ -248,6 +249,7 @@ public class StepParserStepFactoryBeanTests {
 		assertEquals(new Integer(10), throttleLimit);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		assertTrue(tasklet instanceof ChunkOrientedTasklet<?>);
+		assertFalse((Boolean) ReflectionTestUtils.getField(tasklet, "buffering"));
 		Object chunkProvider = ReflectionTestUtils.getField(tasklet, "chunkProvider");
 		Object repeatOperations = ReflectionTestUtils.getField(chunkProvider, "repeatOperations");
 		Object completionPolicy = ReflectionTestUtils.getField(repeatOperations, "completionPolicy");