diff --git a/functional/test_instance_group.py b/functional/test_instance_group.py
new file mode 100644
index 0000000..e60575b
--- /dev/null
+++ b/functional/test_instance_group.py
@@ -0,0 +1,128 @@
+#    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 logging
+
+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 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.
+        """
+
+        stack_name = self._stack_rand_name()
+        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}}
+
+        self.client.stacks.create(
+            stack_name=stack_name,
+            template=self.template,
+            files=files,
+            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')
+        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_name)
+        inst_list = self._stack_output(stack, 'InstanceList')
+        self.assertEqual(4, len(inst_list.split(',')))