diff --git a/common/test.py b/common/test.py
index 8fc5c60..f6889ab 100644
--- a/common/test.py
+++ b/common/test.py
@@ -310,7 +310,8 @@
         while timeutils.delta_seconds(start,
                                       timeutils.utcnow()) < build_timeout:
             try:
-                stack = self.client.stacks.get(stack_identifier)
+                stack = self.client.stacks.get(stack_identifier,
+                                               resolve_outputs=False)
             except heat_exceptions.HTTPNotFound:
                 if success_on_not_found:
                     return
@@ -367,7 +368,7 @@
         stack_name = stack_identifier.split('/')[0]
 
         self.updated_time[stack_identifier] = self.client.stacks.get(
-            stack_identifier).updated_time
+            stack_identifier, resolve_outputs=False).updated_time
 
         self._handle_in_progress(
             self.client.stacks.update,
@@ -439,7 +440,7 @@
         nested_identifier = '/'.join(nested_href.split('/')[-2:])
         self.assertEqual(rsrc.physical_resource_id, nested_id)
 
-        nested_stack = self.client.stacks.get(nested_id)
+        nested_stack = self.client.stacks.get(nested_id, resolve_outputs=False)
         nested_identifier2 = '%s/%s' % (nested_stack.stack_name,
                                         nested_stack.id)
         self.assertEqual(nested_identifier, nested_identifier2)
@@ -453,7 +454,8 @@
         rsrc = self.client.resources.get(stack_identifier, group_name)
         physical_resource_id = rsrc.physical_resource_id
 
-        nested_stack = self.client.stacks.get(physical_resource_id)
+        nested_stack = self.client.stacks.get(physical_resource_id,
+                                              resolve_outputs=False)
         nested_identifier = '%s/%s' % (nested_stack.stack_name,
                                        nested_stack.id)
         parent_id = stack_identifier.split("/")[-1]
@@ -475,7 +477,8 @@
     def stack_create(self, stack_name=None, template=None, files=None,
                      parameters=None, environment=None, tags=None,
                      expected_status='CREATE_COMPLETE',
-                     disable_rollback=True, enable_cleanup=True):
+                     disable_rollback=True, enable_cleanup=True,
+                     environment_files=None):
         name = stack_name or self._stack_rand_name()
         templ = template or self.template
         templ_files = files or {}
@@ -488,12 +491,13 @@
             disable_rollback=disable_rollback,
             parameters=params,
             environment=env,
-            tags=tags
+            tags=tags,
+            environment_files=environment_files
         )
         if expected_status not in ['ROLLBACK_COMPLETE'] and enable_cleanup:
             self.addCleanup(self._stack_delete, name)
 
-        stack = self.client.stacks.get(name)
+        stack = self.client.stacks.get(name, resolve_outputs=False)
         stack_identifier = '%s/%s' % (name, stack.id)
         kwargs = {'stack_identifier': stack_identifier,
                   'status': expected_status}
@@ -524,8 +528,7 @@
             adopt_stack_data=adopt_data,
         )
         self.addCleanup(self._stack_delete, name)
-
-        stack = self.client.stacks.get(name)
+        stack = self.client.stacks.get(name, resolve_outputs=False)
         stack_identifier = '%s/%s' % (name, stack.id)
         self._wait_for_stack_status(stack_identifier, wait_for_status)
         return stack_identifier
diff --git a/functional/test_conditional_exposure.py b/functional/test_conditional_exposure.py
index c1175f1..f1b7d97 100644
--- a/functional/test_conditional_exposure.py
+++ b/functional/test_conditional_exposure.py
@@ -76,6 +76,20 @@
       ram: 20000
       vcpus: 10
 """
+    fl_tmpl_nested = """
+heat_template_version: 2015-10-15
+
+resources:
+  not4everyonerg:
+    type: OS::Heat::ResourceGroup
+    properties:
+        count: 1
+        resource_def:
+            type: OS::Nova::Flavor
+            properties:
+              ram: 20000
+              vcpus: 10
+"""
 
     def test_non_admin_forbidden_create_flavors(self):
         """Fail to create Flavor resource w/o admin role.
@@ -91,6 +105,14 @@
                                template=self.fl_tmpl)
         self.assertIn(self.forbidden_resource_type, ex.message)
 
+    def test_non_admin_forbidden_create_flavors_nested(self):
+        stack_name = self._stack_rand_name()
+        ex = self.assertRaises(exc.Forbidden,
+                               self.client.stacks.create,
+                               stack_name=stack_name,
+                               template=self.fl_tmpl_nested)
+        self.assertIn(self.forbidden_resource_type, ex.message)
+
     def test_forbidden_resource_not_listed(self):
         resources = self.client.resource_types.list()
         self.assertNotIn(self.forbidden_resource_type,
diff --git a/functional/test_env_merge.py b/functional/test_env_merge.py
new file mode 100644
index 0000000..5e222b8
--- /dev/null
+++ b/functional/test_env_merge.py
@@ -0,0 +1,95 @@
+#
+#    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.
+
+from heat_integrationtests.functional import functional_base
+
+
+TEMPLATE = '''
+    heat_template_version: 2015-04-30
+    parameters:
+      p0:
+        type: string
+        default: CORRECT
+      p1:
+        type: string
+        default: INCORRECT
+      p2:
+        type: string
+        default: INCORRECT
+    resources:
+      r1:
+        type: test::R1
+      r2:
+        type: test::R2
+      r3a:
+        type: test::R3
+      r3b:
+        type: test::R3
+'''
+
+ENV_1 = '''
+    parameters:
+      p1: CORRECT
+      p2: INCORRECT-E1
+    resource_registry:
+      test::R1: OS::Heat::RandomString
+      test::R2: BROKEN
+      test::R3: OS::Heat::None
+'''
+
+ENV_2 = '''
+    parameters:
+      p2: CORRECT
+    resource_registry:
+      test::R2: OS::Heat::RandomString
+      resources:
+        r3b:
+          test::R3: OS::Heat::RandomString
+'''
+
+
+class EnvironmentMergingTests(functional_base.FunctionalTestsBase):
+
+    def test_server_environment_merging(self):
+
+        # Setup
+        files = {'env1.yaml': ENV_1, 'env2.yaml': ENV_2}
+        environment_files = ['env1.yaml', 'env2.yaml']
+
+        # Test
+        stack_id = self.stack_create(stack_name='env_merge',
+                                     template=TEMPLATE,
+                                     files=files,
+                                     environment_files=environment_files)
+
+        # Verify
+
+        # Since there is no environment show, the registry overriding
+        # is partially verified by there being no error. If it wasn't
+        # working, test::R2 would remain mapped to BROKEN in env1.
+
+        # Sanity check
+        resources = self.list_resources(stack_id)
+        self.assertEqual(4, len(resources))
+
+        # Verify the parameters are correctly set
+        stack = self.client.stacks.get(stack_id)
+        self.assertEqual('CORRECT', stack.parameters['p0'])
+        self.assertEqual('CORRECT', stack.parameters['p1'])
+        self.assertEqual('CORRECT', stack.parameters['p2'])
+
+        # Verify that r3b has been overridden into a RandomString
+        # by checking to see that it has a value
+        r3b = self.client.resources.get(stack_id, 'r3b')
+        r3b_attrs = r3b.attributes
+        self.assertTrue('value' in r3b_attrs)