diff --git a/cluster/saltbase/salt/etcd/init.sls b/cluster/saltbase/salt/etcd/init.sls
index d759a8815c..71ccfdcce8 100644
--- a/cluster/saltbase/salt/etcd/init.sls
+++ b/cluster/saltbase/salt/etcd/init.sls
@@ -10,10 +10,10 @@
 #    shasum <tar>
 # 6. Update this file with new tar version and new hash
 
-{% set etcd_version="v0.4.6" %}
+{% set etcd_version="v2.0.0" %}
 {% set etcd_tar_url="https://storage.googleapis.com/kubernetes-release/etcd/etcd-%s-linux-amd64.tar.gz"
   | format(etcd_version)  %}
-{% set etcd_tar_hash="sha1=5db514e30b9f340eda00671230d5136855ae14d7" %}
+{% set etcd_tar_hash="sha1=b3cd41d1748bf882a58a98c9585fd5849b943811" %}
 
 etcd-tar:
   archive:
diff --git a/cluster/saltbase/salt/etcd/initd b/cluster/saltbase/salt/etcd/initd
index c8d89b3a7a..fc2f140e91 100755
--- a/cluster/saltbase/salt/etcd/initd
+++ b/cluster/saltbase/salt/etcd/initd
@@ -16,7 +16,9 @@ PATH=/sbin:/usr/sbin:/bin:/usr/bin
 DESC="The etcd key-value share configuration service"
 NAME=etcd
 DAEMON=/usr/local/bin/$NAME
-DAEMON_ARGS="-peer-addr $HOSTNAME:7001 -name $HOSTNAME"
+# DAEMON_ARGS="-peer-addr $HOSTNAME:7001 -name $HOSTNAME"
+host_ip=$(hostname -i)
+DAEMON_ARGS="-addr ${host_ip}:4001 -bind-addr ${host_ip}:4001 -data-dir /var/etcd -initial-advertise-peer-urls http://${HOSTNAME}:2380 -name ${HOSTNAME} -initial-cluster ${HOSTNAME}=http://${HOSTNAME}:2380"
 DAEMON_LOG_FILE=/var/log/$NAME.log
 PIDFILE=/var/run/$NAME.pid
 SCRIPTNAME=/etc/init.d/$NAME
diff --git a/hack/lib/etcd.sh b/hack/lib/etcd.sh
index a783454e6e..984bc540a0 100644
--- a/hack/lib/etcd.sh
+++ b/hack/lib/etcd.sh
@@ -30,12 +30,26 @@ kube::etcd::start() {
     exit 1
   fi
 
+  version=$(etcd -version | cut -d " " -f 3)
+  if [[ "${version}" < "2.0.0" ]]; then
+   kube::log::usage "etcd version 2.0.0 or greater required."
+   exit 1
+  fi
+
   # Start etcd
   ETCD_DIR=$(mktemp -d -t test-etcd.XXXXXX)
-  etcd -name test -data-dir ${ETCD_DIR} -addr ${host}:${port} >/dev/null 2>/dev/null &
+  kube::log::usage "etcd -data-dir ${ETCD_DIR} -addr ${host}:${port} >/dev/null 2>/dev/null"
+  etcd -data-dir ${ETCD_DIR} -addr ${host}:${port} >/dev/null 2>/dev/null &
   ETCD_PID=$!
+ 
+  echo "Waiting for etcd to come up." 
+  while true; do
+    if curl -L http://127.0.0.1:4001/v2/keys/test -XPUT -d value="test"; then
+      break
+    fi
+  done
 
-  kube::util::wait_for_url "http://${host}:${port}/v2/keys/" "etcd: "
+  kube::util::wait_for_url "http://${host}:${port}/v2/keys/test" "etcd: "
 }
 
 kube::etcd::cleanup() {
diff --git a/hack/travis/install-etcd.sh b/hack/travis/install-etcd.sh
index 8024288d94..b030fe3555 100755
--- a/hack/travis/install-etcd.sh
+++ b/hack/travis/install-etcd.sh
@@ -20,7 +20,7 @@ set -o pipefail
 
 KUBE_ROOT=$(dirname "${BASH_SOURCE}")/../..
 
-ETCD_VERSION=${ETCD_VERSION:-v0.4.6}
+ETCD_VERSION=${ETCD_VERSION:-v2.0.0}
 
 cd "${KUBE_ROOT}/third_party"
 curl -sL https://github.com/coreos/etcd/releases/download/${ETCD_VERSION}/etcd-${ETCD_VERSION}-linux-amd64.tar.gz \