diff --git a/akka-actor-tests/src/test/scala/akka/actor/DeathWatchSpec.scala b/akka-actor-tests/src/test/scala/akka/actor/DeathWatchSpec.scala
index 7dc121604f..ea491dcbd1 100644
--- a/akka-actor-tests/src/test/scala/akka/actor/DeathWatchSpec.scala
+++ b/akka-actor-tests/src/test/scala/akka/actor/DeathWatchSpec.scala
@@ -5,7 +5,6 @@
 package akka.actor
 
 import language.postfixOps
-
 import akka.testkit._
 import scala.concurrent.util.duration._
 import java.util.concurrent.atomic._
@@ -18,8 +17,17 @@ class LocalDeathWatchSpec extends AkkaSpec with ImplicitSender with DefaultTimeo
 object DeathWatchSpec {
   def props(target: ActorRef, testActor: ActorRef) = Props(new Actor {
     context.watch(target)
-    def receive = { case x ⇒ testActor forward x }
+    def receive = {
+      case t: Terminated ⇒ testActor forward WrappedTerminated(t)
+      case x             ⇒ testActor forward x
+    }
   })
+
+  /**
+   * Forwarding `Terminated` to non-watching testActor is not possible,
+   * and therefore the `Terminated` message is wrapped.
+   */
+  case class WrappedTerminated(t: Terminated)
 }
 
 trait DeathWatchSpec { this: AkkaSpec with ImplicitSender with DefaultTimeout ⇒
@@ -32,7 +40,7 @@ trait DeathWatchSpec { this: AkkaSpec with ImplicitSender with DefaultTimeout 
 
   "The Death Watch" must {
     def expectTerminationOf(actorRef: ActorRef) = expectMsgPF(5 seconds, actorRef + ": Stopped or Already terminated when linking") {
-      case Terminated(`actorRef`) ⇒ true
+      case WrappedTerminated(Terminated(`actorRef`)) ⇒ true
     }
 
     "notify with one Terminated message when an Actor is stopped" in {
@@ -77,7 +85,7 @@ trait DeathWatchSpec { this: AkkaSpec with ImplicitSender with DefaultTimeout 
         context.unwatch(terminal)
         def receive = {
           case "ping"        ⇒ sender ! "pong"
-          case t: Terminated ⇒ testActor ! t
+          case t: Terminated ⇒ testActor ! WrappedTerminated(t)
         }
       }))
 
@@ -137,9 +145,9 @@ trait DeathWatchSpec { this: AkkaSpec with ImplicitSender with DefaultTimeout 
 
         failed ! Kill
         val result = receiveWhile(3 seconds, messages = 3) {
-          case FF(Failed(_: ActorKilledException, _)) if lastSender eq failed ⇒ 1
+          case FF(Failed(_: ActorKilledException, _)) if lastSender eq failed       ⇒ 1
           case FF(Failed(DeathPactException(`failed`), _)) if lastSender eq brother ⇒ 2
-          case Terminated(`brother`) ⇒ 3
+          case WrappedTerminated(Terminated(`brother`))                             ⇒ 3
         }
         testActor.isTerminated must not be true
         result must be(Seq(1, 2, 3))
@@ -165,6 +173,18 @@ trait DeathWatchSpec { this: AkkaSpec with ImplicitSender with DefaultTimeout 
       parent ! "NKOTB"
       expectMsg("GREEN")
     }
+
+    "only notify when watching" in {
+      val subject = system.actorOf(Props(new Actor { def receive = Actor.emptyBehavior }))
+      val observer = system.actorOf(Props(new Actor {
+        context.watch(subject)
+        def receive = { case x ⇒ testActor forward x }
+      }))
+
+      subject ! PoisonPill
+      // the testActor is not watching subject and will discard Terminated msg
+      expectNoMsg
+    }
   }
 
 }
diff --git a/akka-actor/src/main/scala/akka/actor/Actor.scala b/akka-actor/src/main/scala/akka/actor/Actor.scala
index 77e1add959..b5f2093f90 100644
--- a/akka-actor/src/main/scala/akka/actor/Actor.scala
+++ b/akka-actor/src/main/scala/akka/actor/Actor.scala
@@ -60,11 +60,26 @@ case object Kill extends Kill {
 }
 
 /**
- * When Death Watch is used, the watcher will receive a Terminated(watched) message when watched is terminated.
+ * When Death Watch is used, the watcher will receive a Terminated(watched)
+ * message when watched is terminated.
+ * Terminated message can't be forwarded to another actor, since that actor
+ * might not be watching the subject. Instead, if you need to forward Terminated
+ * to another actor you should send the information in your own message.
  */
 @SerialVersionUID(1L)
 case class Terminated private[akka] (@BeanProperty actor: ActorRef)(@BeanProperty val existenceConfirmed: Boolean) extends AutoReceivedMessage
 
+/**
+ * INTERNAL API
+ *
+ * Used for remote death watch. Failure detector publish this to the
+ * `eventStream` when a remote node is detected to be unreachable.
+ * The watcher ([[akka.actor.DeathWatch]]) subscribes to the `eventStream`
+ * and translates this event to [[akka.actor.Terminated]], which is sent itself.
+ */
+@SerialVersionUID(1L)
+private[akka] case class AddressTerminated(address: Address) extends AutoReceivedMessage
+
 abstract class ReceiveTimeout extends PossiblyHarmful
 
 /**
diff --git a/akka-actor/src/main/scala/akka/actor/ActorCell.scala b/akka-actor/src/main/scala/akka/actor/ActorCell.scala
index 1699a27505..19c6d9785c 100644
--- a/akka-actor/src/main/scala/akka/actor/ActorCell.scala
+++ b/akka-actor/src/main/scala/akka/actor/ActorCell.scala
@@ -125,6 +125,8 @@ trait ActorContext extends ActorRefFactory {
 
   /**
    * Registers this actor as a Monitor for the provided ActorRef.
+   * This actor will receive a Terminated(watched) message when watched
+   * is terminated.
    * @return the provided ActorRef
    */
   def watch(subject: ActorRef): ActorRef
@@ -316,9 +318,9 @@ private[akka] class ActorCell(
   @tailrec final def systemInvoke(message: SystemMessage): Unit = {
     /*
      * When recreate/suspend/resume are received while restarting (i.e. between
-     * preRestart and postRestart, waiting for children to terminate), these 
+     * preRestart and postRestart, waiting for children to terminate), these
      * must not be executed immediately, but instead queued and released after
-     * finishRecreate returns. This can only ever be triggered by 
+     * finishRecreate returns. This can only ever be triggered by
      * ChildTerminated, and ChildTerminated is not one of the queued message
      * types (hence the overwrite further down). Mailbox sets message.next=null
      * before systemInvoke, so this will only be non-null during such a replay.
@@ -375,13 +377,14 @@ private[akka] class ActorCell(
       publish(Debug(self.path.toString, clazz(actor), "received AutoReceiveMessage " + msg))
 
     msg.message match {
-      case Failed(cause, uid)       ⇒ handleFailure(sender, cause, uid)
-      case t: Terminated            ⇒ watchedActorTerminated(t.actor); receiveMessage(t)
-      case Kill                     ⇒ throw new ActorKilledException("Kill")
-      case PoisonPill               ⇒ self.stop()
-      case SelectParent(m)          ⇒ parent.tell(m, msg.sender)
-      case SelectChildName(name, m) ⇒ getChildByName(name) match { case Some(c: ChildRestartStats) ⇒ c.child.tell(m, msg.sender); case _ ⇒ }
-      case SelectChildPattern(p, m) ⇒ for (c ← children if p.matcher(c.path.name).matches) c.tell(m, msg.sender)
+      case Failed(cause, uid)         ⇒ handleFailure(sender, cause, uid)
+      case t: Terminated              ⇒ watchedActorTerminated(t)
+      case AddressTerminated(address) ⇒ addressTerminated(address)
+      case Kill                       ⇒ throw new ActorKilledException("Kill")
+      case PoisonPill                 ⇒ self.stop()
+      case SelectParent(m)            ⇒ parent.tell(m, msg.sender)
+      case SelectChildName(name, m)   ⇒ getChildByName(name) match { case Some(c: ChildRestartStats) ⇒ c.child.tell(m, msg.sender); case _ ⇒ }
+      case SelectChildPattern(p, m)   ⇒ for (c ← children if p.matcher(c.path.name).matches) c.tell(m, msg.sender)
     }
   }
 
diff --git a/akka-actor/src/main/scala/akka/actor/cell/DeathWatch.scala b/akka-actor/src/main/scala/akka/actor/cell/DeathWatch.scala
index 031019f3f6..f994e956c6 100644
--- a/akka-actor/src/main/scala/akka/actor/cell/DeathWatch.scala
+++ b/akka-actor/src/main/scala/akka/actor/cell/DeathWatch.scala
@@ -4,7 +4,7 @@
 
 package akka.actor.cell
 
-import akka.actor.{ Terminated, InternalActorRef, ActorRef, ActorCell, Actor }
+import akka.actor.{ Terminated, InternalActorRef, ActorRef, ActorCell, Actor, Address, AddressTerminated }
 import akka.dispatch.{ Watch, Unwatch }
 import akka.event.Logging.{ Warning, Error, Debug }
 import scala.util.control.NonFatal
@@ -17,8 +17,10 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
   override final def watch(subject: ActorRef): ActorRef = subject match {
     case a: InternalActorRef ⇒
       if (a != self && !watching.contains(a)) {
-        a.sendSystemMessage(Watch(a, self)) // ➡➡➡ NEVER SEND THE SAME SYSTEM MESSAGE OBJECT TO TWO ACTORS ⬅⬅⬅
-        watching += a
+        maintainAddressTerminatedSubscription(a) {
+          a.sendSystemMessage(Watch(a, self)) // ➡➡➡ NEVER SEND THE SAME SYSTEM MESSAGE OBJECT TO TWO ACTORS ⬅⬅⬅
+          watching += a
+        }
       }
       a
   }
@@ -26,13 +28,24 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
   override final def unwatch(subject: ActorRef): ActorRef = subject match {
     case a: InternalActorRef ⇒
       if (a != self && watching.contains(a)) {
-        a.sendSystemMessage(Unwatch(a, self)) // ➡➡➡ NEVER SEND THE SAME SYSTEM MESSAGE OBJECT TO TWO ACTORS ⬅⬅⬅
-        watching -= a
+        maintainAddressTerminatedSubscription(a) {
+          a.sendSystemMessage(Unwatch(a, self)) // ➡➡➡ NEVER SEND THE SAME SYSTEM MESSAGE OBJECT TO TWO ACTORS ⬅⬅⬅
+          watching -= a
+        }
       }
       a
   }
 
-  protected def watchedActorTerminated(ref: ActorRef): Unit = watching -= ref
+  /**
+   * When this actor is watching the subject of [[akka.actor.Terminated]] message
+   * it will be propagated to user's receive.
+   */
+  protected def watchedActorTerminated(t: Terminated): Unit = if (watching.contains(t.actor)) {
+    maintainAddressTerminatedSubscription(t.actor) {
+      watching -= t.actor
+    }
+    receiveMessage(t)
+  }
 
   protected def tellWatchersWeDied(actor: Actor): Unit = {
     if (!watchedBy.isEmpty) {
@@ -56,7 +69,10 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
             case NonFatal(t) ⇒ publish(Error(t, self.path.toString, clazz(actor), "deathwatch"))
           }
         }
-      } finally watching = ActorCell.emptyActorRefSet
+      } finally {
+        watching = ActorCell.emptyActorRefSet
+        unsubscribeAddressTerminated()
+      }
     }
   }
 
@@ -65,7 +81,7 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
     val watcherSelf = watcher == self
 
     if (watcheeSelf && !watcherSelf) {
-      if (!watchedBy.contains(watcher)) {
+      if (!watchedBy.contains(watcher)) maintainAddressTerminatedSubscription(watcher) {
         watchedBy += watcher
         if (system.settings.DebugLifecycle) publish(Debug(self.path.toString, clazz(actor), "now monitoring " + watcher))
       }
@@ -81,7 +97,7 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
     val watcherSelf = watcher == self
 
     if (watcheeSelf && !watcherSelf) {
-      if (watchedBy.contains(watcher)) {
+      if (watchedBy.contains(watcher)) maintainAddressTerminatedSubscription(watcher) {
         watchedBy -= watcher
         if (system.settings.DebugLifecycle) publish(Debug(self.path.toString, clazz(actor), "stopped monitoring " + watcher))
       }
@@ -92,4 +108,48 @@ private[akka] trait DeathWatch { this: ActorCell ⇒
     }
   }
 
+  protected def addressTerminated(address: Address): Unit = {
+    // cleanup watchedBy since we know they are dead
+    maintainAddressTerminatedSubscription() {
+      for (a ← watchedBy; if a.path.address == address) watchedBy -= a
+    }
+
+    // send Terminated to self for all matching subjects
+    // existenceConfirmed = false because we could have been watching a
+    // non-local ActorRef that had never resolved before the other node went down
+    for (a ← watching; if a.path.address == address) {
+      self ! Terminated(a)(existenceConfirmed = false)
+    }
+  }
+
+  /**
+   * Starts subscription to AddressTerminated if not already subscribing and the
+   * block adds a non-local ref to watching or watchedBy.
+   * Ends subscription to AddressTerminated if subscribing and the
+   * block removes the last non-local ref from watching and watchedBy.
+   */
+  private def maintainAddressTerminatedSubscription[T](change: ActorRef = null)(block: ⇒ T): T = {
+    def isNonLocal(ref: ActorRef) = ref match {
+      case null                              ⇒ true
+      case a: InternalActorRef if !a.isLocal ⇒ true
+      case _                                 ⇒ false
+    }
+
+    if (isNonLocal(change)) {
+      def hasNonLocalAddress: Boolean = ((watching exists isNonLocal) || (watchedBy exists isNonLocal))
+      val had = hasNonLocalAddress
+      val result = block
+      val has = hasNonLocalAddress
+      if (had && !has) unsubscribeAddressTerminated()
+      else if (!had && has) subscribeAddressTerminated()
+      result
+    } else {
+      block
+    }
+  }
+
+  private def unsubscribeAddressTerminated(): Unit = system.eventStream.unsubscribe(self, classOf[AddressTerminated])
+
+  private def subscribeAddressTerminated(): Unit = system.eventStream.subscribe(self, classOf[AddressTerminated])
+
 }
\ No newline at end of file
diff --git a/akka-cluster/src/main/scala/akka/cluster/ClusterEvent.scala b/akka-cluster/src/main/scala/akka/cluster/ClusterEvent.scala
index ae1bd6b6ac..4bb0105413 100644
--- a/akka-cluster/src/main/scala/akka/cluster/ClusterEvent.scala
+++ b/akka-cluster/src/main/scala/akka/cluster/ClusterEvent.scala
@@ -5,11 +5,11 @@ package akka.cluster
 
 import language.postfixOps
 import scala.collection.immutable.SortedSet
-
 import akka.actor.{ Actor, ActorLogging, ActorRef, Address }
 import akka.cluster.ClusterEvent._
 import akka.cluster.MemberStatus._
 import akka.event.EventStream
+import akka.actor.AddressTerminated
 
 /**
  * Domain events published to the event bus.
@@ -200,7 +200,14 @@ private[cluster] final class ClusterDomainEventPublisher extends Actor with Acto
   def publishChanges(oldGossip: Gossip, newGossip: Gossip): Unit = {
     // keep the latestGossip to be sent to new subscribers
     latestGossip = newGossip
-    diff(oldGossip, newGossip) foreach { eventStream publish }
+    diff(oldGossip, newGossip) foreach { event ⇒
+      eventStream publish event
+      // notify DeathWatch about unreachable node
+      event match {
+        case MemberUnreachable(m) ⇒ eventStream publish AddressTerminated(m.address)
+        case _                    ⇒
+      }
+    }
   }
 
   def publishInternalStats(currentStats: CurrentInternalStats): Unit = {
diff --git a/akka-cluster/src/multi-jvm/scala/akka/cluster/ClusterDeathWatchSpec.scala b/akka-cluster/src/multi-jvm/scala/akka/cluster/ClusterDeathWatchSpec.scala
new file mode 100644
index 0000000000..8fb7357289
--- /dev/null
+++ b/akka-cluster/src/multi-jvm/scala/akka/cluster/ClusterDeathWatchSpec.scala
@@ -0,0 +1,118 @@
+/**
+ *  Copyright (C) 2009-2012 Typesafe Inc. <http://www.typesafe.com>
+ */
+package akka.cluster
+
+import com.typesafe.config.ConfigFactory
+import org.scalatest.BeforeAndAfter
+import akka.remote.testkit.MultiNodeConfig
+import akka.remote.testkit.MultiNodeSpec
+import akka.testkit._
+import akka.actor.Props
+import akka.actor.Actor
+import akka.actor.Address
+import akka.actor.RootActorPath
+import akka.actor.Terminated
+import akka.actor.Address
+
+object ClusterDeathWatchMultiJvmSpec extends MultiNodeConfig {
+  val first = role("first")
+  val second = role("second")
+  val third = role("third")
+  val fourth = role("fourth")
+
+  commonConfig(debugConfig(on = false).withFallback(MultiNodeClusterSpec.clusterConfig))
+}
+
+class ClusterDeathWatchMultiJvmNode1 extends ClusterDeathWatchSpec with FailureDetectorPuppetStrategy
+class ClusterDeathWatchMultiJvmNode2 extends ClusterDeathWatchSpec with FailureDetectorPuppetStrategy
+class ClusterDeathWatchMultiJvmNode3 extends ClusterDeathWatchSpec with FailureDetectorPuppetStrategy
+class ClusterDeathWatchMultiJvmNode4 extends ClusterDeathWatchSpec with FailureDetectorPuppetStrategy
+
+abstract class ClusterDeathWatchSpec
+  extends MultiNodeSpec(ClusterDeathWatchMultiJvmSpec)
+  with MultiNodeClusterSpec {
+
+  import ClusterDeathWatchMultiJvmSpec._
+
+  "An actor watching a remote actor in the cluster" must {
+    "receive Terminated when watched node becomes unreachable" taggedAs LongRunningTest in {
+      awaitClusterUp(roles: _*)
+      enterBarrier("cluster-up")
+
+      runOn(first) {
+        enterBarrier("subjected-started")
+
+        val path2 = RootActorPath(second) / "user" / "subject"
+        val path3 = RootActorPath(third) / "user" / "subject"
+        val watchEstablished = TestLatch(1)
+        system.actorOf(Props(new Actor {
+          context.watch(context.actorFor(path2))
+          context.watch(context.actorFor(path3))
+          watchEstablished.countDown
+          def receive = {
+            case t: Terminated ⇒ testActor ! t.actor.path
+          }
+        }), name = "observer1")
+
+        watchEstablished.await
+        enterBarrier("watch-established")
+        expectMsg(path2)
+        expectNoMsg
+        enterBarrier("second-terminated")
+
+        markNodeAsUnavailable(third)
+        expectMsg(path3)
+        enterBarrier("third-terminated")
+
+      }
+
+      runOn(second, third, fourth) {
+        system.actorOf(Props(new Actor { def receive = Actor.emptyBehavior }), name = "subject")
+        enterBarrier("subjected-started")
+        enterBarrier("watch-established")
+        runOn(third) {
+          markNodeAsUnavailable(second)
+        }
+        enterBarrier("second-terminated")
+        enterBarrier("third-terminated")
+      }
+
+      enterBarrier("after-1")
+
+    }
+
+    "receive Terminated when watched node is unknown host" taggedAs LongRunningTest in {
+      runOn(first) {
+        val path = RootActorPath(Address("akka", system.name, "unknownhost", 2552)) / "user" / "subject"
+        system.actorOf(Props(new Actor {
+          context.watch(context.actorFor(path))
+          def receive = {
+            case t: Terminated ⇒ testActor ! t.actor.path
+          }
+        }), name = "observer2")
+
+        expectMsg(path)
+      }
+
+      enterBarrier("after-2")
+    }
+
+    "receive Terminated when watched path doesn't exist" taggedAs LongRunningTest in {
+      runOn(first) {
+        val path = RootActorPath(second) / "user" / "non-existing"
+        system.actorOf(Props(new Actor {
+          context.watch(context.actorFor(path))
+          def receive = {
+            case t: Terminated ⇒ testActor ! t.actor.path
+          }
+        }), name = "observer3")
+
+        expectMsg(path)
+      }
+
+      enterBarrier("after-3")
+    }
+
+  }
+}
diff --git a/akka-docs/project/migration-guide-2.0.x-2.1.x.rst b/akka-docs/project/migration-guide-2.0.x-2.1.x.rst
index 22f2c12fdd..2f0ac2d15f 100644
--- a/akka-docs/project/migration-guide-2.0.x-2.1.x.rst
+++ b/akka-docs/project/migration-guide-2.0.x-2.1.x.rst
@@ -287,3 +287,26 @@ stashed messages are put into the dead letters when the actor stops, make sure y
 super.postStop if you override it.
 
 
+Forward of Terminated message
+=============================
+
+Forward of ``Terminated`` message is no longer supported. Instead, if you forward
+``Terminated`` you should send the information in you own message.
+
+v2.0::
+
+  context.watch(subject)
+
+  def receive = {
+    case t @ Terminated => someone forward t
+  }
+
+v2.1::
+
+  case class MyTerminated(subject: ActorRef)
+
+  context.watch(subject)
+
+  def receive = {
+    case Terminated(s) => someone forward MyTerminated(s)
+  }
diff --git a/akka-remote/src/main/scala/akka/remote/RemoteActorRefProvider.scala b/akka-remote/src/main/scala/akka/remote/RemoteActorRefProvider.scala
index b118279ae1..c517fa8a14 100644
--- a/akka-remote/src/main/scala/akka/remote/RemoteActorRefProvider.scala
+++ b/akka-remote/src/main/scala/akka/remote/RemoteActorRefProvider.scala
@@ -235,6 +235,7 @@ private[akka] class RemoteActorRef private[akka] (
     catch {
       case e @ (_: InterruptedException | NonFatal(_)) ⇒
         remote.system.eventStream.publish(Error(e, path.toString, classOf[RemoteActorRef], "swallowing exception during message send"))
+        provider.deadLetters ! message
     }
 
   override def !(message: Any)(implicit sender: ActorRef = null): Unit =
@@ -242,6 +243,7 @@ private[akka] class RemoteActorRef private[akka] (
     catch {
       case e @ (_: InterruptedException | NonFatal(_)) ⇒
         remote.system.eventStream.publish(Error(e, path.toString, classOf[RemoteActorRef], "swallowing exception during message send"))
+        provider.deadLetters ! message
     }
 
   def suspend(): Unit = sendSystemMessage(Suspend())
diff --git a/akka-testkit/src/test/scala/akka/testkit/TestActorRefSpec.scala b/akka-testkit/src/test/scala/akka/testkit/TestActorRefSpec.scala
index 9d88c7b111..f033df302f 100644
--- a/akka-testkit/src/test/scala/akka/testkit/TestActorRefSpec.scala
+++ b/akka-testkit/src/test/scala/akka/testkit/TestActorRefSpec.scala
@@ -96,6 +96,12 @@ object TestActorRefSpec {
     }
   }
 
+  /**
+   * Forwarding `Terminated` to non-watching testActor is not possible,
+   * and therefore the `Terminated` message is wrapped.
+   */
+  case class WrappedTerminated(t: Terminated)
+
 }
 
 @org.junit.runner.RunWith(classOf[org.scalatest.junit.JUnitRunner])
@@ -169,11 +175,14 @@ class TestActorRefSpec extends AkkaSpec("disp1.type=Dispatcher") with BeforeAndA
         val a = TestActorRef(Props[WorkerActor])
         val forwarder = system.actorOf(Props(new Actor {
           context.watch(a)
-          def receive = { case x ⇒ testActor forward x }
+          def receive = {
+            case t: Terminated ⇒ testActor forward WrappedTerminated(t)
+            case x             ⇒ testActor forward x
+          }
         }))
         a.!(PoisonPill)(testActor)
         expectMsgPF(5 seconds) {
-          case Terminated(`a`) ⇒ true
+          case WrappedTerminated(Terminated(`a`)) ⇒ true
         }
         a.isTerminated must be(true)
         assertThread