diff --git a/pkg/registry/etcd/etcd.go b/pkg/registry/etcd/etcd.go
index 0cb49c0246..d63ea71d96 100644
--- a/pkg/registry/etcd/etcd.go
+++ b/pkg/registry/etcd/etcd.go
@@ -184,7 +184,7 @@ func (r *Registry) setPodHostTo(ctx api.Context, podID, oldMachine, machine stri
 	if err != nil {
 		return nil, err
 	}
-	err = r.AtomicUpdate(podKey, &api.Pod{}, func(obj runtime.Object) (runtime.Object, error) {
+	err = r.AtomicUpdate(podKey, &api.Pod{}, false, func(obj runtime.Object) (runtime.Object, error) {
 		pod, ok := obj.(*api.Pod)
 		if !ok {
 			return nil, fmt.Errorf("unexpected object: %#v", obj)
@@ -211,7 +211,7 @@ func (r *Registry) assignPod(ctx api.Context, podID string, machine string) erro
 	}
 	// Doing the constraint check this way provides atomicity guarantees.
 	contKey := makeBoundPodsKey(machine)
-	err = r.AtomicUpdate(contKey, &api.BoundPods{}, func(in runtime.Object) (runtime.Object, error) {
+	err = r.AtomicUpdate(contKey, &api.BoundPods{}, true, func(in runtime.Object) (runtime.Object, error) {
 		boundPodList := in.(*api.BoundPods)
 		boundPodList.Items = append(boundPodList.Items, *boundPod)
 		if errors := constraint.Allowed(boundPodList.Items); len(errors) > 0 {
@@ -261,7 +261,7 @@ func (r *Registry) UpdatePod(ctx api.Context, pod *api.Pod) error {
 	}
 
 	containerKey := makeBoundPodsKey(podOut.Status.Host)
-	return r.AtomicUpdate(containerKey, &api.BoundPods{}, func(in runtime.Object) (runtime.Object, error) {
+	return r.AtomicUpdate(containerKey, &api.BoundPods{}, true, func(in runtime.Object) (runtime.Object, error) {
 		boundPods := in.(*api.BoundPods)
 		for ix := range boundPods.Items {
 			if boundPods.Items[ix].Name == pod.Name {
@@ -299,7 +299,7 @@ func (r *Registry) DeletePod(ctx api.Context, podID string) error {
 	}
 	// Next, remove the pod from the machine atomically.
 	contKey := makeBoundPodsKey(machine)
-	return r.AtomicUpdate(contKey, &api.BoundPods{}, func(in runtime.Object) (runtime.Object, error) {
+	return r.AtomicUpdate(contKey, &api.BoundPods{}, true, func(in runtime.Object) (runtime.Object, error) {
 		pods := in.(*api.BoundPods)
 		newPods := make([]api.BoundPod, 0, len(pods.Items))
 		found := false
@@ -553,7 +553,7 @@ func (r *Registry) UpdateEndpoints(ctx api.Context, endpoints *api.Endpoints) er
 		return err
 	}
 	// TODO: this is a really bad misuse of AtomicUpdate, need to compute a diff inside the loop.
-	err = r.AtomicUpdate(key, &api.Endpoints{},
+	err = r.AtomicUpdate(key, &api.Endpoints{}, true,
 		func(input runtime.Object) (runtime.Object, error) {
 			// TODO: racy - label query is returning different results for two simultaneous updaters
 			return endpoints, nil
diff --git a/pkg/tools/etcd_tools.go b/pkg/tools/etcd_tools.go
index 1e5e832423..1aeb7cd939 100644
--- a/pkg/tools/etcd_tools.go
+++ b/pkg/tools/etcd_tools.go
@@ -310,7 +310,7 @@ type EtcdUpdateFunc func(input runtime.Object) (output runtime.Object, err error
 // Example:
 //
 // h := &util.EtcdHelper{client, encoding, versioning}
-// err := h.AtomicUpdate("myKey", &MyType{}, func(input runtime.Object) (runtime.Object, error) {
+// err := h.AtomicUpdate("myKey", &MyType{}, true, func(input runtime.Object) (runtime.Object, error) {
 //	// Before this function is called, currentObj has been reset to etcd's current
 //	// contents for "myKey".
 //
@@ -323,7 +323,7 @@ type EtcdUpdateFunc func(input runtime.Object) (output runtime.Object, err error
 //	return cur, nil
 // })
 //
-func (h *EtcdHelper) AtomicUpdate(key string, ptrToType runtime.Object, tryUpdate EtcdUpdateFunc) error {
+func (h *EtcdHelper) AtomicUpdate(key string, ptrToType runtime.Object, ignoreNotFound bool, tryUpdate EtcdUpdateFunc) error {
 	v, err := conversion.EnforcePtr(ptrToType)
 	if err != nil {
 		// Panic is appropriate, because this is a programming error.
@@ -331,7 +331,7 @@ func (h *EtcdHelper) AtomicUpdate(key string, ptrToType runtime.Object, tryUpdat
 	}
 	for {
 		obj := reflect.New(v.Type()).Interface().(runtime.Object)
-		origBody, index, err := h.bodyAndExtractObj(key, obj, true)
+		origBody, index, err := h.bodyAndExtractObj(key, obj, ignoreNotFound)
 		if err != nil {
 			return err
 		}
diff --git a/pkg/tools/etcd_tools_test.go b/pkg/tools/etcd_tools_test.go
index fadcd06202..621ede84ba 100644
--- a/pkg/tools/etcd_tools_test.go
+++ b/pkg/tools/etcd_tools_test.go
@@ -456,7 +456,7 @@ func TestAtomicUpdate(t *testing.T) {
 	// Create a new node.
 	fakeClient.ExpectNotFoundGet("/some/key")
 	obj := &TestResource{ObjectMeta: api.ObjectMeta{Name: "foo"}, Value: 1}
-	err := helper.AtomicUpdate("/some/key", &TestResource{}, func(in runtime.Object) (runtime.Object, error) {
+	err := helper.AtomicUpdate("/some/key", &TestResource{}, true, func(in runtime.Object) (runtime.Object, error) {
 		return obj, nil
 	})
 	if err != nil {
@@ -475,7 +475,7 @@ func TestAtomicUpdate(t *testing.T) {
 	// Update an existing node.
 	callbackCalled := false
 	objUpdate := &TestResource{ObjectMeta: api.ObjectMeta{Name: "foo"}, Value: 2}
-	err = helper.AtomicUpdate("/some/key", &TestResource{}, func(in runtime.Object) (runtime.Object, error) {
+	err = helper.AtomicUpdate("/some/key", &TestResource{}, true, func(in runtime.Object) (runtime.Object, error) {
 		callbackCalled = true
 
 		if in.(*TestResource).Value != 1 {
@@ -510,7 +510,7 @@ func TestAtomicUpdateNoChange(t *testing.T) {
 	// Create a new node.
 	fakeClient.ExpectNotFoundGet("/some/key")
 	obj := &TestResource{ObjectMeta: api.ObjectMeta{Name: "foo"}, Value: 1}
-	err := helper.AtomicUpdate("/some/key", &TestResource{}, func(in runtime.Object) (runtime.Object, error) {
+	err := helper.AtomicUpdate("/some/key", &TestResource{}, true, func(in runtime.Object) (runtime.Object, error) {
 		return obj, nil
 	})
 	if err != nil {
@@ -521,7 +521,7 @@ func TestAtomicUpdateNoChange(t *testing.T) {
 	callbackCalled := false
 	objUpdate := &TestResource{ObjectMeta: api.ObjectMeta{Name: "foo"}, Value: 1}
 	fakeClient.Err = errors.New("should not be called")
-	err = helper.AtomicUpdate("/some/key", &TestResource{}, func(in runtime.Object) (runtime.Object, error) {
+	err = helper.AtomicUpdate("/some/key", &TestResource{}, true, func(in runtime.Object) (runtime.Object, error) {
 		callbackCalled = true
 		return objUpdate, nil
 	})
@@ -533,6 +533,32 @@ func TestAtomicUpdateNoChange(t *testing.T) {
 	}
 }
 
+func TestAtomicUpdateKeyNotFound(t *testing.T) {
+	fakeClient := NewFakeEtcdClient(t)
+	fakeClient.TestIndex = true
+	helper := EtcdHelper{fakeClient, codec, versioner}
+
+	// Create a new node.
+	fakeClient.ExpectNotFoundGet("/some/key")
+	obj := &TestResource{ObjectMeta: api.ObjectMeta{Name: "foo"}, Value: 1}
+
+	f := func(in runtime.Object) (runtime.Object, error) {
+		return obj, nil
+	}
+
+	ignoreNotFound := false
+	err := helper.AtomicUpdate("/some/key", &TestResource{}, ignoreNotFound, f)
+	if err == nil {
+		t.Errorf("Expected error for key not found.")
+	}
+
+	ignoreNotFound = true
+	err = helper.AtomicUpdate("/some/key", &TestResource{}, ignoreNotFound, f)
+	if err != nil {
+		t.Errorf("Unexpected error %v.", err)
+	}
+}
+
 func TestAtomicUpdate_CreateCollision(t *testing.T) {
 	fakeClient := NewFakeEtcdClient(t)
 	fakeClient.TestIndex = true
@@ -552,7 +578,7 @@ func TestAtomicUpdate_CreateCollision(t *testing.T) {
 			defer wgDone.Done()
 
 			firstCall := true
-			err := helper.AtomicUpdate("/some/key", &TestResource{}, func(in runtime.Object) (runtime.Object, error) {
+			err := helper.AtomicUpdate("/some/key", &TestResource{}, true, func(in runtime.Object) (runtime.Object, error) {
 				defer func() { firstCall = false }()
 
 				if firstCall {