diff --git a/common/test.py b/common/test.py
index 43336a9..7478f64 100644
--- a/common/test.py
+++ b/common/test.py
@@ -17,6 +17,7 @@
 import re
 import six
 import subprocess
+import testscenarios
 import testtools
 import time
 
@@ -63,7 +64,8 @@
         return randbits
 
 
-class HeatIntegrationTest(testtools.TestCase):
+class HeatIntegrationTest(testscenarios.WithScenarios,
+                          testtools.TestCase):
 
     def setUp(self):
         super(HeatIntegrationTest, self).setUp()
diff --git a/functional/test_default_parameters.py b/functional/test_default_parameters.py
new file mode 100644
index 0000000..138a13e
--- /dev/null
+++ b/functional/test_default_parameters.py
@@ -0,0 +1,107 @@
+#    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.
+
+import yaml
+
+from heat_integrationtests.common import test
+
+
+class DefaultParametersTest(test.HeatIntegrationTest):
+
+    template = '''
+heat_template_version: 2013-05-23
+parameters:
+  length:
+    type: string
+    default: 40
+resources:
+  random1:
+    type: nested_random.yaml
+  random2:
+    type: OS::Heat::RandomString
+    properties:
+      length: {get_param: length}
+outputs:
+  random1:
+    value: {get_attr: [random1, random1_value]}
+  random2:
+    value: {get_resource: random2}
+'''
+    nested_template = '''
+heat_template_version: 2013-05-23
+parameters:
+  length:
+    type: string
+    default: 50
+resources:
+  random1:
+    type: OS::Heat::RandomString
+    properties:
+      length: {get_param: length}
+outputs:
+  random1_value:
+    value: {get_resource: random1}
+'''
+
+    scenarios = [
+        ('none', dict(param=None, default=None, temp_def=True,
+                      expect1=50, expect2=40)),
+        ('default', dict(param=None, default=12, temp_def=True,
+                         expect1=12, expect2=12)),
+        ('both', dict(param=15, default=12, temp_def=True,
+                      expect1=12, expect2=15)),
+        ('no_temp_default', dict(param=None, default=12, temp_def=False,
+                                 expect1=12, expect2=12)),
+    ]
+
+    def setUp(self):
+        super(DefaultParametersTest, self).setUp()
+        self.client = self.orchestration_client
+
+    def test_defaults(self):
+        stack_name = self._stack_rand_name()
+
+        env = {'parameters': {}, 'parameter_defaults': {}}
+        if self.param:
+            env['parameters'] = {'length': self.param}
+        if self.default:
+            env['parameter_defaults'] = {'length': self.default}
+
+        if not self.temp_def:
+            # remove the default from the parameter in the nested template.
+            ntempl = yaml.load(self.nested_template)
+            del ntempl['parameters']['length']['default']
+            nested_template = yaml.dump(ntempl)
+        else:
+            nested_template = self.nested_template
+
+        self.client.stacks.create(
+            stack_name=stack_name,
+            template=self.template,
+            files={'nested_random.yaml': nested_template},
+            disable_rollback=True,
+            parameters={},
+            environment=env
+        )
+        self.addCleanup(self.client.stacks.delete, stack_name)
+
+        stack = self.client.stacks.get(stack_name)
+        stack_identifier = '%s/%s' % (stack_name, stack.id)
+
+        self._wait_for_stack_status(stack_identifier, 'CREATE_COMPLETE')
+
+        stack = self.client.stacks.get(stack_name)
+        for out in stack.outputs:
+            if out['output_key'] == 'random1':
+                self.assertEqual(self.expect1, len(out['output_value']))
+            if out['output_key'] == 'random2':
+                self.assertEqual(self.expect2, len(out['output_value']))
diff --git a/functional/test_instance_group.py b/functional/test_instance_group.py
new file mode 100644
index 0000000..33367fc
--- /dev/null
+++ b/functional/test_instance_group.py
@@ -0,0 +1,204 @@
+#    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.
+
+import copy
+import logging
+import yaml
+
+from heatclient import exc
+
+from heat_integrationtests.common import test
+
+
+LOG = logging.getLogger(__name__)
+
+
+class InstanceGroupTest(test.HeatIntegrationTest):
+
+    template = '''
+{
+  "AWSTemplateFormatVersion" : "2010-09-09",
+  "Description" : "Template to create multiple instances.",
+  "Parameters" : {"size": {"Type": "String", "Default": "1"},
+                  "AZ": {"Type": "String", "Default": "nova"},
+                  "image": {"Type": "String"},
+                  "flavor": {"Type": "String"},
+                  "keyname": {"Type": "String"}},
+  "Resources": {
+    "JobServerGroup": {
+      "Type": "OS::Heat::InstanceGroup",
+      "Properties": {
+        "LaunchConfigurationName" : {"Ref": "JobServerConfig"},
+        "Size" : {"Ref": "size"},
+        "AvailabilityZones" : [{"Ref": "AZ"}]
+      }
+    },
+
+    "JobServerConfig" : {
+      "Type" : "AWS::AutoScaling::LaunchConfiguration",
+      "Metadata": {"foo": "bar"},
+      "Properties": {
+        "ImageId"           : {"Ref": "image"},
+        "InstanceType"      : {"Ref": "flavor"},
+        "KeyName"           : {"Ref": "keyname"},
+        "SecurityGroups"    : [ "sg-1" ],
+        "UserData"          : "jsconfig data",
+      }
+    }
+  },
+  "Outputs": {
+    "InstanceList": {"Value": {
+      "Fn::GetAtt": ["JobServerGroup", "InstanceList"]}}
+  }
+}
+'''
+
+    instance_template = '''
+heat_template_version: 2013-05-23
+parameters:
+  ImageId: {type: string}
+  InstanceType: {type: string}
+  KeyName: {type: string}
+  SecurityGroups: {type: comma_delimited_list}
+  UserData: {type: string}
+  Tags: {type: comma_delimited_list}
+
+resources:
+  random1:
+    type: OS::Heat::RandomString
+
+outputs:
+  PublicIp:
+    value: {get_attr: [random1, value]}
+'''
+
+    def setUp(self):
+        super(InstanceGroupTest, self).setUp()
+        self.client = self.orchestration_client
+        if not self.conf.image_ref:
+            raise self.skipException("No image configured to test")
+        if not self.conf.keypair_name:
+            raise self.skipException("No keyname configured to test")
+        if not self.conf.instance_type:
+            raise self.skipException("No flavor configured to test")
+
+    def assert_instance_count(self, stack, expected_count):
+        inst_list = self._stack_output(stack, 'InstanceList')
+        self.assertEqual(expected_count, len(inst_list.split(',')))
+
+    def test_basic_create_works(self):
+        """Make sure the working case is good.
+        Note this combines test_override_aws_ec2_instance into this test as
+        well, which is:
+        If AWS::EC2::Instance is overridden, InstanceGroup will automatically
+        use that overridden resource type.
+        """
+
+        files = {'provider.yaml': self.instance_template}
+        env = {'resource_registry': {'AWS::EC2::Instance': 'provider.yaml'},
+               'parameters': {'size': 4,
+                              'image': self.conf.image_ref,
+                              'keyname': self.conf.keypair_name,
+                              'flavor': self.conf.instance_type}}
+        stack_identifier = self.stack_create(template=self.template,
+                                             files=files, environment=env)
+        initial_resources = {
+            'JobServerConfig': 'AWS::AutoScaling::LaunchConfiguration',
+            'JobServerGroup': 'OS::Heat::InstanceGroup'}
+        self.assertEqual(initial_resources,
+                         self.list_resources(stack_identifier))
+
+        stack = self.client.stacks.get(stack_identifier)
+        self.assert_instance_count(stack, 4)
+
+    def test_create_config_prop_validation(self):
+        """Make sure that during a group create the instance
+        properties are validated. And an error causes the group to fail.
+        """
+        stack_name = self._stack_rand_name()
+
+        # add a property without a default and don't provide a value.
+        # we use this to make the instance fail on a property validation
+        # error.
+        broken = yaml.load(copy.copy(self.instance_template))
+        broken['parameters']['no_default'] = {'type': 'string'}
+        files = {'provider.yaml': yaml.dump(broken)}
+        env = {'resource_registry': {'AWS::EC2::Instance': 'provider.yaml'},
+               'parameters': {'size': 4,
+                              'image': self.conf.image_ref,
+                              'keyname': self.conf.keypair_name,
+                              'flavor': self.conf.instance_type}}
+
+        # now with static nested stack validation, this gets raised quickly.
+        excp = self.assertRaises(exc.HTTPBadRequest, self.client.stacks.create,
+                                 stack_name=stack_name, template=self.template,
+                                 files=files, disable_rollback=True,
+                                 parameters={}, environment=env)
+        self.assertIn('Property no_default not assigned', str(excp))
+
+    def test_size_updates_work(self):
+        files = {'provider.yaml': self.instance_template}
+        env = {'resource_registry': {'AWS::EC2::Instance': 'provider.yaml'},
+               'parameters': {'size': 2,
+                              'image': self.conf.image_ref,
+                              'keyname': self.conf.keypair_name,
+                              'flavor': self.conf.instance_type}}
+
+        stack_identifier = self.stack_create(template=self.template,
+                                             files=files,
+                                             environment=env)
+        stack = self.client.stacks.get(stack_identifier)
+        self.assert_instance_count(stack, 2)
+
+        # Increase min size to 5
+        env2 = {'resource_registry': {'AWS::EC2::Instance': 'provider.yaml'},
+                'parameters': {'size': 5,
+                               'image': self.conf.image_ref,
+                               'keyname': self.conf.keypair_name,
+                               'flavor': self.conf.instance_type}}
+        self.update_stack(stack_identifier, self.template,
+                          environment=env2, files=files)
+        self._wait_for_stack_status(stack_identifier, 'UPDATE_COMPLETE')
+        stack = self.client.stacks.get(stack_identifier)
+        self.assert_instance_count(stack, 5)
+
+    def test_update_group_replace(self):
+        """Make sure that during a group update the non updatable
+        properties cause a replacement.
+        """
+        files = {'provider.yaml': self.instance_template}
+        env = {'resource_registry':
+               {'AWS::EC2::Instance': 'provider.yaml'},
+               'parameters': {'size': 1,
+                              'image': self.conf.image_ref,
+                              'keyname': self.conf.keypair_name,
+                              'flavor': self.conf.instance_type}}
+
+        stack_identifier = self.stack_create(template=self.template,
+                                             files=files,
+                                             environment=env)
+        rsrc = self.client.resources.get(stack_identifier, 'JobServerGroup')
+        orig_asg_id = rsrc.physical_resource_id
+
+        env2 = {'resource_registry':
+                {'AWS::EC2::Instance': 'provider.yaml'},
+                'parameters': {'size': '2',
+                               'AZ': 'wibble',
+                               'image': self.conf.image_ref,
+                               'keyname': self.conf.keypair_name,
+                               'flavor': self.conf.instance_type}}
+        self.update_stack(stack_identifier, self.template,
+                          environment=env2, files=files)
+
+        # replacement will cause the resource physical_resource_id to change.
+        rsrc = self.client.resources.get(stack_identifier, 'JobServerGroup')
+        self.assertNotEqual(orig_asg_id, rsrc.physical_resource_id)