diff --git a/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/AggregatorParser.java b/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/AggregatorParser.java
index d3aa8d53d7..3227929228 100644
--- a/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/AggregatorParser.java
+++ b/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/AggregatorParser.java
@@ -18,6 +18,7 @@ package org.springframework.integration.config.xml;
 
 import org.w3c.dom.Element;
 
+import org.springframework.beans.factory.config.BeanDefinition;
 import org.springframework.beans.factory.support.BeanDefinitionBuilder;
 import org.springframework.beans.factory.support.BeanDefinitionReaderUtils;
 import org.springframework.beans.factory.xml.ParserContext;
@@ -29,6 +30,7 @@ import org.springframework.util.StringUtils;
  * 
  * @author Marius Bogoevici
  * @author Mark Fisher
+ * @author Oleg Zhurakousky
  */
 public class AggregatorParser extends AbstractConsumerEndpointParser {
 
@@ -59,21 +61,30 @@ public class AggregatorParser extends AbstractConsumerEndpointParser {
 
 	@Override
 	protected BeanDefinitionBuilder parseHandler(Element element, ParserContext parserContext) {
-		BeanDefinitionBuilder builder;
+		BeanDefinition innerHandlerDefinition = this.parseInnerHandlerDefinition(element, parserContext);
 		String ref = element.getAttribute(REF_ATTRIBUTE);
-		if (StringUtils.hasText(ref)) {
+		BeanDefinitionBuilder builder;
+		
+		if (innerHandlerDefinition != null || StringUtils.hasText(ref)){
 			builder = BeanDefinitionBuilder.genericBeanDefinition(
 					IntegrationNamespaceUtils.BASE_PACKAGE + ".aggregator.MethodInvokingAggregator");
-			builder.addConstructorArgReference(ref);
-			if (StringUtils.hasText(element.getAttribute(METHOD_ATTRIBUTE))) {
-				String method = element.getAttribute(METHOD_ATTRIBUTE);
-				builder.getRawBeanDefinition().getConstructorArgumentValues().addGenericArgumentValue(method, "java.lang.String");
-			}
-		}
-		else {
+		} else {
 			builder = BeanDefinitionBuilder.genericBeanDefinition(
 					IntegrationNamespaceUtils.BASE_PACKAGE + ".aggregator.DefaultMessageAggregator");
 		}
+		
+		if (innerHandlerDefinition != null){
+			builder.addConstructorArgValue(innerHandlerDefinition);
+		} else {
+			if (StringUtils.hasText(ref)) {		
+				builder.addConstructorArgReference(ref);			
+			}
+		}
+		if (StringUtils.hasText(element.getAttribute(METHOD_ATTRIBUTE))) {
+			String method = element.getAttribute(METHOD_ATTRIBUTE);
+			builder.getRawBeanDefinition().getConstructorArgumentValues().addGenericArgumentValue(method, "java.lang.String");
+		}
+		
 		IntegrationNamespaceUtils.setReferenceIfAttributeDefined(builder, element,
 				DISCARD_CHANNEL_ATTRIBUTE);
 		IntegrationNamespaceUtils.setValueIfAttributeDefined(builder, element,
diff --git a/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/spring-integration-1.0.xsd b/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/spring-integration-1.0.xsd
index d815694f17..e54c58409d 100644
--- a/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/spring-integration-1.0.xsd
+++ b/org.springframework.integration/src/main/java/org/springframework/integration/config/xml/spring-integration-1.0.xsd
@@ -967,7 +967,10 @@
 				</xsd:documentation>
 			</xsd:annotation>
 			<xsd:complexContent>
-				<xsd:extension base="handlerEndpointType">
+				<xsd:extension base="handlerEndpointType">  
+					<xsd:choice>
+						<xsd:element ref="beans:bean" minOccurs="0" maxOccurs="1" />
+					</xsd:choice>
 					<xsd:attribute name="completion-strategy" type="xsd:string">
 						<xsd:annotation>
 							<xsd:appinfo>
diff --git a/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/InnerDefinitionHandlerAwareEndpointParserTests.java b/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/InnerDefinitionHandlerAwareEndpointParserTests.java
index 324f91829d..a5af3caa8d 100644
--- a/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/InnerDefinitionHandlerAwareEndpointParserTests.java
+++ b/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/InnerDefinitionHandlerAwareEndpointParserTests.java
@@ -15,8 +15,13 @@
  */
 package org.springframework.integration.config.xml;
 
+import static org.junit.Assert.assertEquals;
+
 import java.io.ByteArrayInputStream;
 import java.util.Collection;
+import java.util.HashMap;
+import java.util.List;
+import java.util.Map;
 import java.util.Properties;
 
 import junit.framework.Assert;
@@ -31,7 +36,10 @@ import org.springframework.core.io.InputStreamResource;
 import org.springframework.integration.channel.DirectChannel;
 import org.springframework.integration.channel.PollableChannel;
 import org.springframework.integration.core.Message;
+import org.springframework.integration.core.MessageChannel;
+import org.springframework.integration.core.MessageHeaders;
 import org.springframework.integration.endpoint.EventDrivenConsumer;
+import org.springframework.integration.message.GenericMessage;
 import org.springframework.integration.message.MessageBuilder;
 import org.springframework.test.context.ContextConfiguration;
 import org.springframework.test.context.junit4.SpringJUnit4ClassRunner;
@@ -130,6 +138,32 @@ public class InnerDefinitionHandlerAwareEndpointParserTests {
 		reader.setValidationMode(XmlBeanDefinitionReader.VALIDATION_XSD);
 		reader.loadBeanDefinitions(new InputStreamResource(stream));
 	}
+	
+	@Test
+	public void testInnerAggregatorDefinitionSuccess(){
+		String configProperty = testConfigurations.getProperty("aggregator-inner-success");
+		this.testAggregatorDefinitionSuccess(configProperty);
+	}
+	@Test
+	public void testInnerConcurrentAggregatorDefinitionSuccess(){
+		String configProperty = testConfigurations.getProperty("aggregator-inner-concurrent-success");
+		this.testAggregatorDefinitionSuccess(configProperty);
+	}
+	@Test
+	public void testRefAggregatorDefinitionSuccess(){
+		String configProperty = testConfigurations.getProperty("aggregator-ref-success");
+		this.testAggregatorDefinitionSuccess(configProperty);
+	}
+	@Test(expected=BeanDefinitionStoreException.class)
+	public void testInnerAggregatorDefinitionFailureRefAndInner(){
+		String xmlConfig = testConfigurations.getProperty("aggregator-failure-refAndBean");
+		ByteArrayInputStream stream = new ByteArrayInputStream(xmlConfig.getBytes());
+		GenericApplicationContext ac = new GenericApplicationContext();
+		XmlBeanDefinitionReader reader = new XmlBeanDefinitionReader(ac);
+		reader.setValidationMode(XmlBeanDefinitionReader.VALIDATION_XSD);
+		reader.loadBeanDefinitions(new InputStreamResource(stream));
+	}
+	
 	private void testSplitterDefinitionSuccess(String configProperty){
 		ByteArrayInputStream stream = new ByteArrayInputStream(configProperty.getBytes());
 		GenericApplicationContext ac = new GenericApplicationContext();
@@ -199,6 +233,33 @@ public class InnerDefinitionHandlerAwareEndpointParserTests {
 		PollableChannel channel1 = (PollableChannel) ac.getBean("outChannel");
 		Assert.assertTrue(channel1.receive().getPayload().equals("1"));
 	}
+	private void testAggregatorDefinitionSuccess(String configProperty){
+		ByteArrayInputStream stream = new ByteArrayInputStream(configProperty.getBytes());
+		GenericApplicationContext ac = new GenericApplicationContext();
+		XmlBeanDefinitionReader reader = new XmlBeanDefinitionReader(ac);
+		reader.setValidationMode(XmlBeanDefinitionReader.VALIDATION_XSD);
+		reader.loadBeanDefinitions(new InputStreamResource(stream));
+		ac.refresh();
+		ac.start();
+		MessageChannel inChannel = (MessageChannel) ac.getBean("inChannel");
+		for (int i = 0; i < 5; i++) {
+			Map<String, Object> headers = stubHeaders(i, 5, 1);
+			Message message = new GenericMessage<Integer>(i, headers);
+			inChannel.send(message);
+		}
+		PollableChannel output = (PollableChannel) ac.getBean("outChannel");
+		assertEquals(0 + 1 + 2 + 3 + 4, output.receive().getPayload());
+		System.out.println();
+	}
+	
+	private Map<String, Object> stubHeaders(int sequenceNumber, int sequenceSize, int correllationId) {
+		Map<String, Object> headers = new HashMap<String, Object>();
+		headers.put(MessageHeaders.SEQUENCE_NUMBER, sequenceNumber);
+		headers.put(MessageHeaders.SEQUENCE_SIZE, sequenceSize);
+		headers.put(MessageHeaders.CORRELATION_ID, correllationId);
+		headers.put(MessageHeaders.ID, 1);
+		return headers;
+	}
 
 	public static class TestSplitter{
 		public Collection split(String[] payload){
@@ -222,5 +283,15 @@ public class InnerDefinitionHandlerAwareEndpointParserTests {
 			return value;
 		}
 	}
+	
+	public static class TestAggregator{
+		public Integer sum(List<Integer> numbers) {
+			int result = 0;
+			for (Integer number : numbers) {
+				result += number;
+			}
+			return result;
+		}
+	}
 		
 }
diff --git a/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/innerdefaware.properties b/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/innerdefaware.properties
index a0229f8e74..88d1c7160a 100644
--- a/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/innerdefaware.properties
+++ b/org.springframework.integration/src/test/java/org/springframework/integration/config/xml/innerdefaware.properties
@@ -192,4 +192,75 @@ sa-failure-refAndBean=\
 		<beans:bean class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestServiceActivator" /> \
 	</service-activator>  \
 	<beans:bean id="testServiceActivatorBean" class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestServiceActivator" /> \
+</beans:beans>
+aggregator-inner-success=\
+<?xml version="1.0" encoding="UTF-8"?> \
+<beans:beans xmlns="http://www.springframework.org/schema/integration" \
+	xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:beans="http://www.springframework.org/schema/beans" \
+	xsi:schemaLocation="http://www.springframework.org/schema/beans \
+			http://www.springframework.org/schema/beans/spring-beans-2.5.xsd \
+			http://www.springframework.org/schema/integration \
+			http://www.springframework.org/schema/integration/spring-integration-1.0.xsd"> \
+	<channel id="inChannel"/> \
+	<channel id="outChannel"> \
+		<queue capacity="5" /> \
+	</channel> \
+	<aggregator input-channel="inChannel" method="sum" output-channel="outChannel"> \
+		<beans:bean class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestAggregator"/> \
+	</aggregator> \
+</beans:beans>
+aggregator-ref-success=\
+<?xml version="1.0" encoding="UTF-8"?> \
+<beans:beans xmlns="http://www.springframework.org/schema/integration" \
+	xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:beans="http://www.springframework.org/schema/beans" \
+	xsi:schemaLocation="http://www.springframework.org/schema/beans \
+			http://www.springframework.org/schema/beans/spring-beans-2.5.xsd \
+			http://www.springframework.org/schema/integration \
+			http://www.springframework.org/schema/integration/spring-integration-1.0.xsd"> \
+	<channel id="inChannel"> \
+	</channel> \
+	<channel id="outChannel"> \
+		<queue capacity="5" /> \
+	</channel> \
+	<aggregator input-channel="inChannel" ref="aggregator" method="sum" output-channel="outChannel"/> \
+    <beans:bean id="aggregator" class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestAggregator"/> \
+</beans:beans>
+aggregator-inner-concurrent-success=\
+<?xml version="1.0" encoding="UTF-8"?> \
+<beans:beans xmlns="http://www.springframework.org/schema/integration" \
+	xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:beans="http://www.springframework.org/schema/beans" \
+	xsi:schemaLocation="http://www.springframework.org/schema/beans \
+			http://www.springframework.org/schema/beans/spring-beans-2.5.xsd \
+			http://www.springframework.org/schema/integration \
+			http://www.springframework.org/schema/integration/spring-integration-1.0.xsd"> \
+	<channel id="inChannel"> \
+		<queue capacity="5" /> \
+	</channel> \
+	<channel id="outChannel"> \
+		<queue capacity="5" /> \
+	</channel> \
+	<aggregator input-channel="inChannel" method="sum" output-channel="outChannel"> \
+	    <poller task-executor="executor" max-messages-per-poll="5"> \
+			<interval-trigger interval="20" /> \
+		</poller> \
+		<beans:bean class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestAggregator"/> \
+	</aggregator> \
+	<thread-pool-task-executor id="executor" core-size="5" /> \
+</beans:beans>
+aggregator-failure-refAndBean=\
+<?xml version="1.0" encoding="UTF-8"?> \
+<beans:beans xmlns="http://www.springframework.org/schema/integration" \
+	xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:beans="http://www.springframework.org/schema/beans" \
+	xsi:schemaLocation="http://www.springframework.org/schema/beans \
+			http://www.springframework.org/schema/beans/spring-beans-2.5.xsd \
+			http://www.springframework.org/schema/integration \
+			http://www.springframework.org/schema/integration/spring-integration-1.0.xsd"> \
+	<channel id="inChannel"/> \
+	<channel id="outChannel"> \
+		<queue capacity="5" /> \
+	</channel> \
+	<aggregator input-channel="inChannel" ref="aggregator" method="sum" output-channel="outChannel"> \
+		<beans:bean class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestAggregator"/> \
+	</aggregator> \
+	<beans:bean id="aggregator" class="org.springframework.integration.config.xml.InnerDefinitionHandlerAwareEndpointParserTests$TestAggregator"/> \
 </beans:beans>
\ No newline at end of file