diff --git a/pom.xml b/pom.xml
index 40c4a907..ea51ae27 100644
--- a/pom.xml
+++ b/pom.xml
@@ -11,7 +11,7 @@
 	<parent>
 		<groupId>org.springframework.cloud</groupId>
 		<artifactId>spring-cloud-build</artifactId>
-		<version>1.2.0.RELEASE</version>
+		<version>1.2.1.BUILD-SNAPSHOT</version>
 		<relativePath/> <!-- lookup parent from repository -->
 	</parent>
 	<scm>
diff --git a/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/EnvironmentController.java b/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/EnvironmentController.java
index 1f86c61b..2e27743c 100644
--- a/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/EnvironmentController.java
+++ b/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/EnvironmentController.java
@@ -152,7 +152,7 @@ public class EnvironmentController {
 			throws Exception {
 		validateProfiles(profiles);
 		Environment environment = labelled(name, profiles, label);
-		Map<String, Object> properties = convertToMap(environment);
+		Map<String, Object> properties = convertToMap(environment, resolvePlaceholders);
 		String json = this.objectMapper.writeValueAsString(properties);
 		if (resolvePlaceholders) {
 			json = resolvePlaceholders(prepareEnvironment(environment), json);
@@ -188,7 +188,7 @@ public class EnvironmentController {
 			throws Exception {
 		validateProfiles(profiles);
 		Environment environment = labelled(name, profiles, label);
-		Map<String, Object> result = convertToMap(environment);
+		Map<String, Object> result = convertToMap(environment, resolvePlaceholders);
 		if (this.stripDocument && result.size() == 1
 				&& result.keySet().iterator().next().equals("document")) {
 			Object value = result.get("document");
@@ -208,10 +208,13 @@ public class EnvironmentController {
 		return getSuccess(yaml);
 	}
 
-	private Map<String, Object> convertToMap(Environment input) throws BindException {
+	private Map<String, Object> convertToMap(Environment input, boolean resolvePlaceholders) throws BindException {
 		Map<String, Object> target = new LinkedHashMap<>();
 		PropertiesConfigurationFactory<Map<String, Object>> factory = new PropertiesConfigurationFactory<>(
 				target);
+		if (!resolvePlaceholders) {
+			factory.setResolvePlaceholders(false);
+		}
 		Map<String, Object> data = convertToProperties(input);
 		LinkedHashMap<String, Object> properties = new LinkedHashMap<>();
 		for (String key : data.keySet()) {
diff --git a/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/EnvironmentControllerTests.java b/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/EnvironmentControllerTests.java
index d429e7c9..bed6062b 100644
--- a/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/EnvironmentControllerTests.java
+++ b/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/EnvironmentControllerTests.java
@@ -138,7 +138,15 @@ public class EnvironmentControllerTests {
 	public void placeholdersNotResolvedInYamlFromSystemPropertiesWhenNotFlaggedWithDefault() throws Exception {
 		whenPlaceholdersSystemPropsWithDefault();
 		String yaml = this.controller.yaml("foo", "bar", false).getBody();
-		// If there is a default value we can't prevent the placeholder being resolved
+		// If there is a default value we prevent the placeholder being resolved
+		assertEquals("a:\n  b:\n    c: ${foo:spam}\n", yaml);
+	}
+
+	@Test
+	public void placeholdersResolvedInYamlFromSystemPropertiesWhenFlagged() throws Exception {
+		whenPlaceholdersSystemPropsWithDefault();
+		String yaml = this.controller.yaml("foo", "bar", true).getBody();
+		// If there is a default value we do not prevent the placeholder being resolved
 		assertEquals("a:\n  b:\n    c: spam\n", yaml);
 	}
 
@@ -335,10 +343,18 @@ public class EnvironmentControllerTests {
 	}
 
 	@Test
-	public void placeholdersResolvedInJsonFromSystemPropertiesWhenNotFlaggedWithDefault() throws Exception {
+	public void placeholdersNotResolvedInJsonFromSystemPropertiesWhenNotFlaggedWithDefault() throws Exception {
 		whenPlaceholdersSystemPropsWithDefault();
 		String json = this.controller.jsonProperties("foo", "bar", false).getBody();
-		// If there is a default value we can't prevent the placeholder being resolved
+		// If there is a default value we do not prevent the placeholder being resolved
+		assertEquals("{\"a\":{\"b\":{\"c\":\"${foo:spam}\"}}}", json);
+	}
+
+	@Test
+	public void placeholdersResolvedInJsonFromSystemPropertiesWhenFlagged() throws Exception {
+		whenPlaceholdersSystemPropsWithDefault();
+		String json = this.controller.jsonProperties("foo", "bar", true).getBody();
+		// If there is a default value we prevent the placeholder being resolved
 		assertEquals("{\"a\":{\"b\":{\"c\":\"spam\"}}}", json);
 	}