diff --git a/pkg/controller/endpoint/endpoints_controller.go b/pkg/controller/endpoint/endpoints_controller.go
index 78cf37a95a..27d43f11bc 100644
--- a/pkg/controller/endpoint/endpoints_controller.go
+++ b/pkg/controller/endpoint/endpoints_controller.go
@@ -515,7 +515,7 @@ func addEndpointSubset(subsets []v1.EndpointSubset, pod *v1.Pod, epa v1.Endpoint
 			Ports:     []v1.EndpointPort{epp},
 		})
 		readyEps++
-	} else {
+	} else if shouldPodBeInEndpoints(pod) {
 		glog.V(5).Infof("Pod is out of service: %v/%v", pod.Namespace, pod.Name)
 		subsets = append(subsets, v1.EndpointSubset{
 			NotReadyAddresses: []v1.EndpointAddress{epa},
@@ -525,3 +525,14 @@ func addEndpointSubset(subsets []v1.EndpointSubset, pod *v1.Pod, epa v1.Endpoint
 	}
 	return subsets, readyEps, notReadyEps
 }
+
+func shouldPodBeInEndpoints(pod *v1.Pod) bool {
+	switch pod.Spec.RestartPolicy {
+	case v1.RestartPolicyNever:
+		return pod.Status.Phase != v1.PodFailed && pod.Status.Phase != v1.PodSucceeded
+	case v1.RestartPolicyOnFailure:
+		return pod.Status.Phase != v1.PodSucceeded
+	default:
+		return true
+	}
+}
diff --git a/pkg/controller/endpoint/endpoints_controller_test.go b/pkg/controller/endpoint/endpoints_controller_test.go
index 9a45cd84e2..89a181557a 100644
--- a/pkg/controller/endpoint/endpoints_controller_test.go
+++ b/pkg/controller/endpoint/endpoints_controller_test.go
@@ -76,6 +76,38 @@ func addPods(store cache.Store, namespace string, nPods int, nPorts int, nNotRea
 	}
 }
 
+func addNotReadyPodsWithSpecifiedRestartPolicyAndPhase(store cache.Store, namespace string, nPods int, nPorts int, restartPolicy v1.RestartPolicy, podPhase v1.PodPhase) {
+	for i := 0; i < nPods; i++ {
+		p := &v1.Pod{
+			TypeMeta: metav1.TypeMeta{APIVersion: api.Registry.GroupOrDie(v1.GroupName).GroupVersion.String()},
+			ObjectMeta: metav1.ObjectMeta{
+				Namespace: namespace,
+				Name:      fmt.Sprintf("pod%d", i),
+				Labels:    map[string]string{"foo": "bar"},
+			},
+			Spec: v1.PodSpec{
+				RestartPolicy: restartPolicy,
+				Containers:    []v1.Container{{Ports: []v1.ContainerPort{}}},
+			},
+			Status: v1.PodStatus{
+				PodIP: fmt.Sprintf("1.2.3.%d", 4+i),
+				Phase: podPhase,
+				Conditions: []v1.PodCondition{
+					{
+						Type:   v1.PodReady,
+						Status: v1.ConditionFalse,
+					},
+				},
+			},
+		}
+		for j := 0; j < nPorts; j++ {
+			p.Spec.Containers[0].Ports = append(p.Spec.Containers[0].Ports,
+				v1.ContainerPort{Name: fmt.Sprintf("port%d", i), ContainerPort: int32(8080 + j)})
+		}
+		store.Add(p)
+	}
+}
+
 type serverResponse struct {
 	statusCode int
 	obj        interface{}
@@ -661,3 +693,202 @@ func TestSyncEndpointsHeadlessService(t *testing.T) {
 	endpointsHandler.ValidateRequestCount(t, 1)
 	endpointsHandler.ValidateRequest(t, testapi.Default.ResourcePath("endpoints", ns, "foo"), "PUT", &data)
 }
+
+func TestSyncEndpointsItemsExcludeNotReadyPodsWithRestartPolicyNeverAndPhaseFailed(t *testing.T) {
+	ns := "other"
+	testServer, endpointsHandler := makeTestServer(t, ns)
+	defer testServer.Close()
+	endpoints := newController(testServer.URL)
+	endpoints.endpointsStore.Add(&v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+			Labels: map[string]string{
+				"foo": "bar",
+			},
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	addNotReadyPodsWithSpecifiedRestartPolicyAndPhase(endpoints.podStore, ns, 1, 1, v1.RestartPolicyNever, v1.PodFailed)
+	endpoints.serviceStore.Add(&v1.Service{
+		ObjectMeta: metav1.ObjectMeta{Name: "foo", Namespace: ns},
+		Spec: v1.ServiceSpec{
+			Selector: map[string]string{"foo": "bar"},
+			Ports:    []v1.ServicePort{{Port: 80, Protocol: "TCP", TargetPort: intstr.FromInt(8080)}},
+		},
+	})
+	endpoints.syncService(ns + "/foo")
+	data := runtime.EncodeOrDie(testapi.Default.Codec(), &v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	endpointsHandler.ValidateRequest(t, testapi.Default.ResourcePath("endpoints", ns, "foo"), "PUT", &data)
+}
+
+func TestSyncEndpointsItemsExcludeNotReadyPodsWithRestartPolicyNeverAndPhaseSucceeded(t *testing.T) {
+	ns := "other"
+	testServer, endpointsHandler := makeTestServer(t, ns)
+	defer testServer.Close()
+	endpoints := newController(testServer.URL)
+	endpoints.endpointsStore.Add(&v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+			Labels: map[string]string{
+				"foo": "bar",
+			},
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	addNotReadyPodsWithSpecifiedRestartPolicyAndPhase(endpoints.podStore, ns, 1, 1, v1.RestartPolicyNever, v1.PodSucceeded)
+	endpoints.serviceStore.Add(&v1.Service{
+		ObjectMeta: metav1.ObjectMeta{Name: "foo", Namespace: ns},
+		Spec: v1.ServiceSpec{
+			Selector: map[string]string{"foo": "bar"},
+			Ports:    []v1.ServicePort{{Port: 80, Protocol: "TCP", TargetPort: intstr.FromInt(8080)}},
+		},
+	})
+	endpoints.syncService(ns + "/foo")
+	data := runtime.EncodeOrDie(testapi.Default.Codec(), &v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	endpointsHandler.ValidateRequest(t, testapi.Default.ResourcePath("endpoints", ns, "foo"), "PUT", &data)
+}
+
+func TestSyncEndpointsItemsExcludeNotReadyPodsWithRestartPolicyOnFailureAndPhaseSucceeded(t *testing.T) {
+	ns := "other"
+	testServer, endpointsHandler := makeTestServer(t, ns)
+	defer testServer.Close()
+	endpoints := newController(testServer.URL)
+	endpoints.endpointsStore.Add(&v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+			Labels: map[string]string{
+				"foo": "bar",
+			},
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	addNotReadyPodsWithSpecifiedRestartPolicyAndPhase(endpoints.podStore, ns, 1, 1, v1.RestartPolicyOnFailure, v1.PodSucceeded)
+	endpoints.serviceStore.Add(&v1.Service{
+		ObjectMeta: metav1.ObjectMeta{Name: "foo", Namespace: ns},
+		Spec: v1.ServiceSpec{
+			Selector: map[string]string{"foo": "bar"},
+			Ports:    []v1.ServicePort{{Port: 80, Protocol: "TCP", TargetPort: intstr.FromInt(8080)}},
+		},
+	})
+	endpoints.syncService(ns + "/foo")
+	data := runtime.EncodeOrDie(testapi.Default.Codec(), &v1.Endpoints{
+		ObjectMeta: metav1.ObjectMeta{
+			Name:            "foo",
+			Namespace:       ns,
+			ResourceVersion: "1",
+		},
+		Subsets: []v1.EndpointSubset{},
+	})
+	endpointsHandler.ValidateRequest(t, testapi.Default.ResourcePath("endpoints", ns, "foo"), "PUT", &data)
+}
+
+// There are 3*5 possibilities(3 types of RestartPolicy by 5 types of PodPhase). Not list them all here.
+// Just list all of the 3 false cases and 3 of the 12 true cases.
+func TestShouldPodBeInEndpoints(t *testing.T) {
+	testCases := []struct {
+		name     string
+		pod      *v1.Pod
+		expected bool
+	}{
+		// Pod should not be in endpoints cases:
+		{
+			name: "Failed pod with Never RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyNever,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodFailed,
+				},
+			},
+			expected: false,
+		},
+		{
+			name: "Succeeded pod with Never RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyNever,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodSucceeded,
+				},
+			},
+			expected: false,
+		},
+		{
+			name: "Succeeded pod with OnFailure RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyOnFailure,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodSucceeded,
+				},
+			},
+			expected: false,
+		},
+		// Pod should be in endpoints cases:
+		{
+			name: "Failed pod with Always RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyAlways,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodFailed,
+				},
+			},
+			expected: true,
+		},
+		{
+			name: "Pending pod with Never RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyNever,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodPending,
+				},
+			},
+			expected: true,
+		},
+		{
+			name: "Unknown pod with OnFailure RestartPolicy",
+			pod: &v1.Pod{
+				Spec: v1.PodSpec{
+					RestartPolicy: v1.RestartPolicyOnFailure,
+				},
+				Status: v1.PodStatus{
+					Phase: v1.PodUnknown,
+				},
+			},
+			expected: true,
+		},
+	}
+	for _, test := range testCases {
+		result := shouldPodBeInEndpoints(test.pod)
+		if result != test.expected {
+			t.Errorf("%s: expected : %t, got: %t", test.name, test.expected, result)
+		}
+	}
+}