diff --git a/spring-integration-core/src/main/java/org/springframework/integration/config/MessageBusParser.java b/spring-integration-core/src/main/java/org/springframework/integration/config/MessageBusParser.java
index c696957320..e4cd9d5da8 100644
--- a/spring-integration-core/src/main/java/org/springframework/integration/config/MessageBusParser.java
+++ b/spring-integration-core/src/main/java/org/springframework/integration/config/MessageBusParser.java
@@ -42,8 +42,6 @@ import org.springframework.util.StringUtils;
  */
 public class MessageBusParser extends AbstractSimpleBeanDefinitionParser {
 
-	private static final String REFERENCE_ATTRIBUTE = "ref";
-
 	public static final String MESSAGE_BUS_BEAN_NAME = "internal.MessageBus";
 
 	public static final String MESSAGE_BUS_AWARE_POST_PROCESSOR_BEAN_NAME = "internal.MessageBusAwareBeanPostProcessor";
@@ -55,10 +53,9 @@ public class MessageBusParser extends AbstractSimpleBeanDefinitionParser {
 	private static final String DEFAULT_CONCURRENCY_ELEMENT = "default-concurrency";
 
 	private static final String DEFAULT_CONCURRENCY_PROPERTY = "defaultConcurrencyPolicy";
-	
-	private static final String CHANNEL_FACTORY_ELEMENT = "channel-factory";
-	
-	private static final String CHANNEL_FACTORY_PROPERTY = "channelFactory";
+
+	private static final String CHANNEL_FACTORY_ATTRIBUTE = "channel-factory";
+
 
 	@Override
 	protected String resolveId(Element element, AbstractBeanDefinition definition, ParserContext parserContext)
@@ -77,7 +74,9 @@ public class MessageBusParser extends AbstractSimpleBeanDefinitionParser {
 
 	@Override
 	protected boolean isEligibleAttribute(String attributeName) {
-		return !ERROR_CHANNEL_ATTRIBUTE.equals(attributeName) && super.isEligibleAttribute(attributeName);
+		return !ERROR_CHANNEL_ATTRIBUTE.equals(attributeName) &&
+				!CHANNEL_FACTORY_ATTRIBUTE.equals(attributeName) &&
+				super.isEligibleAttribute(attributeName);
 	}
 
 	@Override
@@ -87,10 +86,15 @@ public class MessageBusParser extends AbstractSimpleBeanDefinitionParser {
 			beanDefinition.addPropertyReference(Conventions.attributeNameToPropertyName(
 					ERROR_CHANNEL_ATTRIBUTE), errorChannelRef);
 		}
-		this.processAdditionalChildElements(beanDefinition, element);
+		String channelFactoryRef = element.getAttribute(CHANNEL_FACTORY_ATTRIBUTE);
+		if (StringUtils.hasText(channelFactoryRef)) {
+			beanDefinition.addPropertyReference(Conventions.attributeNameToPropertyName(
+					CHANNEL_FACTORY_ATTRIBUTE), channelFactoryRef);
+		}
+		this.processChildElements(beanDefinition, element);
 	}
 
-	private void processAdditionalChildElements(BeanDefinitionBuilder beanDefinition, Element element) {
+	private void processChildElements(BeanDefinitionBuilder beanDefinition, Element element) {
 		NodeList childNodes = element.getChildNodes();
 		for (int i = 0; i < childNodes.getLength(); i++) {
 			Node child = childNodes.item(i);
@@ -100,10 +104,6 @@ public class MessageBusParser extends AbstractSimpleBeanDefinitionParser {
 					beanDefinition.addPropertyValue(DEFAULT_CONCURRENCY_PROPERTY,
 							IntegrationNamespaceUtils.parseConcurrencyPolicy((Element) child));
 				}
-				else if (CHANNEL_FACTORY_ELEMENT.equals(localName)) {
-					beanDefinition.addPropertyReference(CHANNEL_FACTORY_PROPERTY,
-							((Element) child).getAttribute(REFERENCE_ATTRIBUTE));
-				}
 			}
 		}
 	}
diff --git a/spring-integration-core/src/main/java/org/springframework/integration/config/spring-integration-core-1.0.xsd b/spring-integration-core/src/main/java/org/springframework/integration/config/spring-integration-core-1.0.xsd
index 90891a2710..bc32f7a68f 100644
--- a/spring-integration-core/src/main/java/org/springframework/integration/config/spring-integration-core-1.0.xsd
+++ b/spring-integration-core/src/main/java/org/springframework/integration/config/spring-integration-core-1.0.xsd
@@ -26,10 +26,10 @@
 			</xsd:annotation>
 			<xsd:sequence>
 				<xsd:element name="default-concurrency" type="concurrencyType" minOccurs="0" maxOccurs="1"/>
-				<xsd:element name="channel-factory" type="channelFactoryType" minOccurs="0" maxOccurs="1"/>
 			</xsd:sequence>
 			<xsd:attribute name="auto-startup" type="xsd:boolean"/>
 			<xsd:attribute name="auto-create-channels" type="xsd:boolean"/>
+			<xsd:attribute name="channel-factory" type="xsd:string"/>
 			<xsd:attribute name="error-channel" type="xsd:string"/>
 			<xsd:attribute name="dispatcher-pool-size" type="xsd:int"/>
 		</xsd:complexType>
@@ -44,7 +44,7 @@
 			</xsd:annotation>
 		</xsd:complexType>
 	</xsd:element>
-	
+
 	<xsd:element name="channel" type="channelType">
 		<xsd:annotation>
 			<xsd:documentation>
@@ -266,15 +266,6 @@
 			<xsd:attribute name="should-fail-on-rejection-limit" type="xsd:boolean"/>
 		</xsd:complexType>
 	</xsd:element>
-	
-	<xsd:complexType name="channelFactoryType">
-		<xsd:annotation>
-			<xsd:documentation>
-	Defines a channel factory.
-			</xsd:documentation>
-		</xsd:annotation>
-		<xsd:attribute name="ref" type="xsd:string" use="optional"/>
-	</xsd:complexType>
 
 	<xsd:complexType name="concurrencyType">
 		<xsd:annotation>
diff --git a/spring-integration-core/src/test/java/org/springframework/integration/config/messageBusWithChannelFactory.xml b/spring-integration-core/src/test/java/org/springframework/integration/config/messageBusWithChannelFactory.xml
index e02f9dda0b..141e1a03c1 100644
--- a/spring-integration-core/src/test/java/org/springframework/integration/config/messageBusWithChannelFactory.xml
+++ b/spring-integration-core/src/test/java/org/springframework/integration/config/messageBusWithChannelFactory.xml
@@ -7,14 +7,12 @@
 			http://www.springframework.org/schema/integration
 			http://www.springframework.org/schema/integration/spring-integration-core-1.0.xsd">
 
+	<message-bus channel-factory="synchronousChannelFactory"/>
 
-	<message-bus>
-		<channel-factory ref="synchronousChannelFactory"/>
-	</message-bus>
-	
 	<beans:bean id="synchronousChannelFactory" class="org.springframework.integration.channel.factory.SynchronousChannelFactory"/>	
 
     <channel id="defaultTypeChannel"/>
+
     <queue-channel id="specifiedTypeChannel"/>
 
 </beans:beans>