diff --git a/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binding/ChannelBindingService.java b/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binding/ChannelBindingService.java
index 8c1dced5a..e907cbf56 100644
--- a/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binding/ChannelBindingService.java
+++ b/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binding/ChannelBindingService.java
@@ -45,8 +45,8 @@ public class ChannelBindingService {
 	public void bindConsumer(MessageChannel inputChannel, String inputChannelName) {
 		String channelBindingTarget = this.channelBindingProperties
 				.getBindingPath(inputChannelName);
-		if (isChannelPubSub(inputChannelName)) {
-			this.binder.bindPubSubConsumer(channelBindingTarget, inputChannel,
+		if (isChannelPubSub(channelBindingTarget)) {
+			this.binder.bindPubSubConsumer(removePrefix(channelBindingTarget), inputChannel,
 					this.channelBindingProperties.getConsumerProperties());
 		}
 		else {
@@ -58,8 +58,8 @@ public class ChannelBindingService {
 	public void bindProducer(MessageChannel outputChannel, String outputChannelName) {
 		String channelBindingTarget = this.channelBindingProperties
 				.getBindingPath(outputChannelName);
-		if (isChannelPubSub(outputChannelName)) {
-			this.binder.bindPubSubProducer(channelBindingTarget, outputChannel,
+		if (isChannelPubSub(channelBindingTarget)) {
+			this.binder.bindPubSubProducer(removePrefix(channelBindingTarget), outputChannel,
 					this.channelBindingProperties.getProducerProperties());
 		}
 		else {
@@ -68,10 +68,16 @@ public class ChannelBindingService {
 		}
 	}
 
-	private boolean isChannelPubSub(String channelName) {
-		Assert.isTrue(StringUtils.hasText(channelName),
-				"Channel name should not be empty/null.");
-		return channelName.startsWith("topic:");
+	private boolean isChannelPubSub(String bindingTarget) {
+		Assert.isTrue(StringUtils.hasText(bindingTarget),
+				"Binding target should not be empty/null.");
+		return bindingTarget.startsWith("topic:");
+	}
+
+	private String removePrefix(String bindingTarget) {
+		Assert.isTrue(StringUtils.hasText(bindingTarget),
+				"Binding target should not be empty/null.");
+		return bindingTarget.substring(bindingTarget.indexOf(":") + 1);
 	}
 
 	public void unbindConsumers(String inputChannelName) {
diff --git a/spring-cloud-stream/src/test/java/org/springframework/cloud/stream/binder/ProcessorBindingTestsWithPubSubBindingTargets.java b/spring-cloud-stream/src/test/java/org/springframework/cloud/stream/binder/ProcessorBindingTestsWithPubSubBindingTargets.java
new file mode 100644
index 000000000..069ca979c
--- /dev/null
+++ b/spring-cloud-stream/src/test/java/org/springframework/cloud/stream/binder/ProcessorBindingTestsWithPubSubBindingTargets.java
@@ -0,0 +1,69 @@
+/*
+ * Copyright 2015 the original author or authors.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.springframework.cloud.stream.binder;
+
+import static org.mockito.Matchers.eq;
+import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.verifyNoMoreInteractions;
+
+import java.util.Properties;
+
+import org.junit.Test;
+import org.junit.runner.RunWith;
+import org.mockito.Mockito;
+
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.boot.autoconfigure.EnableAutoConfiguration;
+import org.springframework.boot.test.SpringApplicationConfiguration;
+import org.springframework.cloud.stream.annotation.Bindings;
+import org.springframework.cloud.stream.annotation.EnableBinding;
+import org.springframework.cloud.stream.messaging.Processor;
+import org.springframework.cloud.stream.utils.MockBinderConfiguration;
+import org.springframework.context.annotation.Import;
+import org.springframework.context.annotation.PropertySource;
+import org.springframework.test.context.junit4.SpringJUnit4ClassRunner;
+
+/**
+ * @author Marius Bogoevici
+ */
+@RunWith(SpringJUnit4ClassRunner.class)
+@SpringApplicationConfiguration(ProcessorBindingTestsWithPubSubBindingTargets.TestProcessor.class)
+public class ProcessorBindingTestsWithPubSubBindingTargets {
+
+	@SuppressWarnings("rawtypes")
+	@Autowired
+	private Binder binder;
+
+	@Autowired @Bindings(TestProcessor.class)
+	private Processor testProcessor;
+
+	@SuppressWarnings("unchecked")
+	@Test
+	public void testSourceOutputChannelBound() {
+		verify(binder).bindPubSubConsumer(eq("testtock.0"), eq(testProcessor.input()), Mockito.<Properties>any());
+		verify(binder).bindPubSubProducer(eq("testtock.1"), eq(testProcessor.output()), Mockito.<Properties>any());
+		verifyNoMoreInteractions(binder);
+	}
+
+	@EnableBinding(Processor.class)
+	@EnableAutoConfiguration
+	@Import(MockBinderConfiguration.class)
+	@PropertySource("classpath:/org/springframework/cloud/stream/binder/processor-binding-test-pubsub.properties")
+	public static class TestProcessor {
+
+	}
+}
diff --git a/spring-cloud-stream/src/test/resources/org/springframework/cloud/stream/binder/processor-binding-test-pubsub.properties b/spring-cloud-stream/src/test/resources/org/springframework/cloud/stream/binder/processor-binding-test-pubsub.properties
new file mode 100644
index 000000000..cd9d0bc54
--- /dev/null
+++ b/spring-cloud-stream/src/test/resources/org/springframework/cloud/stream/binder/processor-binding-test-pubsub.properties
@@ -0,0 +1,2 @@
+spring.cloud.stream.bindings.input=topic:testtock.0
+spring.cloud.stream.bindings.output=topic:testtock.1