diff --git a/api/client/commands.go b/api/client/commands.go
index fa0f69f3d6..7ee6248d3b 100644
--- a/api/client/commands.go
+++ b/api/client/commands.go
@@ -2027,12 +2027,7 @@ func (cli *DockerCli) createContainer(config *runconfig.Config, hostConfig *runc
 		containerValues.Set("name", name)
 	}
 
-	var data interface{}
-	if hostConfig != nil {
-		data = runconfig.MergeConfigs(config, hostConfig)
-	} else {
-		data = config
-	}
+	mergedConfig := runconfig.MergeConfigs(config, hostConfig)
 
 	var containerIDFile *cidFile
 	if cidfile != "" {
@@ -2044,7 +2039,7 @@ func (cli *DockerCli) createContainer(config *runconfig.Config, hostConfig *runc
 	}
 
 	//create the container
-	stream, statusCode, err := cli.call("POST", "/containers/create?"+containerValues.Encode(), data, false)
+	stream, statusCode, err := cli.call("POST", "/containers/create?"+containerValues.Encode(), mergedConfig, false)
 	//if image not found try to pull it
 	if statusCode == 404 {
 		fmt.Fprintf(cli.err, "Unable to find image '%s' locally\n", config.Image)
@@ -2053,7 +2048,7 @@ func (cli *DockerCli) createContainer(config *runconfig.Config, hostConfig *runc
 			return nil, err
 		}
 		// Retry
-		if stream, _, err = cli.call("POST", "/containers/create?"+containerValues.Encode(), data, false); err != nil {
+		if stream, _, err = cli.call("POST", "/containers/create?"+containerValues.Encode(), mergedConfig, false); err != nil {
 			return nil, err
 		}
 	} else if err != nil {
@@ -2155,7 +2150,7 @@ func (cli *DockerCli) CmdRun(args ...string) error {
 		sigProxy = false
 	}
 
-	runResult, err := cli.createContainer(config, nil, hostConfig.ContainerIDFile, *flName)
+	runResult, err := cli.createContainer(config, hostConfig, hostConfig.ContainerIDFile, *flName)
 	if err != nil {
 		return err
 	}
diff --git a/builder/internals.go b/builder/internals.go
index 1ca95c5933..63907a4e6b 100644
--- a/builder/internals.go
+++ b/builder/internals.go
@@ -173,7 +173,7 @@ func (b *Builder) runContextCommand(args []string, allowRemote bool, allowDecomp
 		return nil
 	}
 
-	container, _, err := b.Daemon.Create(b.Config, "")
+	container, _, err := b.Daemon.Create(b.Config, nil, "")
 	if err != nil {
 		return err
 	}
@@ -442,7 +442,7 @@ func (b *Builder) create() (*daemon.Container, error) {
 	config := *b.Config
 
 	// Create the container
-	c, warnings, err := b.Daemon.Create(b.Config, "")
+	c, warnings, err := b.Daemon.Create(b.Config, nil, "")
 	if err != nil {
 		return nil, err
 	}
diff --git a/daemon/create.go b/daemon/create.go
index a66831e786..3309d034c1 100644
--- a/daemon/create.go
+++ b/daemon/create.go
@@ -26,7 +26,16 @@ func (daemon *Daemon) ContainerCreate(job *engine.Job) engine.Status {
 		job.Errorf("Your kernel does not support swap limit capabilities. Limitation discarded.\n")
 		config.MemorySwap = -1
 	}
-	container, buildWarnings, err := daemon.Create(config, name)
+
+	var hostConfig *runconfig.HostConfig
+	if job.EnvExists("HostConfig") {
+		hostConfig = runconfig.ContainerHostConfigFromJob(job)
+	} else {
+		// Older versions of the API don't provide a HostConfig.
+		hostConfig = nil
+	}
+
+	container, buildWarnings, err := daemon.Create(config, hostConfig, name)
 	if err != nil {
 		if daemon.Graph().IsNotExist(err) {
 			_, tag := parsers.ParseRepositoryTag(config.Image)
@@ -51,18 +60,11 @@ func (daemon *Daemon) ContainerCreate(job *engine.Job) engine.Status {
 		job.Errorf("%s\n", warning)
 	}
 
-	if job.EnvExists("HostConfig") {
-		hostConfig := runconfig.ContainerHostConfigFromJob(job)
-		if err := daemon.setHostConfig(container, hostConfig); err != nil {
-			return job.Error(err)
-		}
-	}
-
 	return engine.StatusOK
 }
 
 // Create creates a new container from the given configuration with a given name.
-func (daemon *Daemon) Create(config *runconfig.Config, name string) (*Container, []string, error) {
+func (daemon *Daemon) Create(config *runconfig.Config, hostConfig *runconfig.HostConfig, name string) (*Container, []string, error) {
 	var (
 		container *Container
 		warnings  []string
@@ -84,6 +86,11 @@ func (daemon *Daemon) Create(config *runconfig.Config, name string) (*Container,
 	if err := daemon.createRootfs(container, img); err != nil {
 		return nil, nil, err
 	}
+	if hostConfig != nil {
+		if err := daemon.setHostConfig(container, hostConfig); err != nil {
+			return nil, nil, err
+		}
+	}
 	if err := container.ToDisk(); err != nil {
 		return nil, nil, err
 	}
diff --git a/daemon/start.go b/daemon/start.go
index 207dff85aa..f2c375ddc9 100644
--- a/daemon/start.go
+++ b/daemon/start.go
@@ -27,6 +27,8 @@ func (daemon *Daemon) ContainerStart(job *engine.Job) engine.Status {
 	}
 
 	// If no environment was set, then no hostconfig was passed.
+	// This is kept for backward compatibility - hostconfig should be passed when
+	// creating a container, not during start.
 	if len(job.Environ()) > 0 {
 		hostConfig := runconfig.ContainerHostConfigFromJob(job)
 		if err := daemon.setHostConfig(container, hostConfig); err != nil {
diff --git a/integration/container_test.go b/integration/container_test.go
index 6486c5ad4b..ab94cbc679 100644
--- a/integration/container_test.go
+++ b/integration/container_test.go
@@ -18,6 +18,7 @@ func TestRestartStdin(t *testing.T) {
 
 		OpenStdin: true,
 	},
+		&runconfig.HostConfig{},
 		"",
 	)
 	if err != nil {
@@ -94,6 +95,7 @@ func TestStdin(t *testing.T) {
 
 		OpenStdin: true,
 	},
+		&runconfig.HostConfig{},
 		"",
 	)
 	if err != nil {
@@ -139,6 +141,7 @@ func TestTty(t *testing.T) {
 
 		OpenStdin: true,
 	},
+		&runconfig.HostConfig{},
 		"",
 	)
 	if err != nil {
@@ -183,6 +186,7 @@ func BenchmarkRunSequential(b *testing.B) {
 			Image: GetTestImage(daemon).ID,
 			Cmd:   []string{"echo", "-n", "foo"},
 		},
+			&runconfig.HostConfig{},
 			"",
 		)
 		if err != nil {
@@ -216,6 +220,7 @@ func BenchmarkRunParallel(b *testing.B) {
 				Image: GetTestImage(daemon).ID,
 				Cmd:   []string{"echo", "-n", "foo"},
 			},
+				&runconfig.HostConfig{},
 				"",
 			)
 			if err != nil {
diff --git a/integration/runtime_test.go b/integration/runtime_test.go
index e592bb67f1..6720485e28 100644
--- a/integration/runtime_test.go
+++ b/integration/runtime_test.go
@@ -266,6 +266,7 @@ func TestDaemonCreate(t *testing.T) {
 		Image: GetTestImage(daemon).ID,
 		Cmd:   []string{"ls", "-al"},
 	},
+		&runconfig.HostConfig{},
 		"",
 	)
 	if err != nil {
@@ -309,14 +310,15 @@ func TestDaemonCreate(t *testing.T) {
 			Image: GetTestImage(daemon).ID,
 			Cmd:   []string{"ls", "-al"},
 		},
+		&runconfig.HostConfig{},
 		"conflictname",
 	)
-	if _, _, err := daemon.Create(&runconfig.Config{Image: GetTestImage(daemon).ID, Cmd: []string{"ls", "-al"}}, testContainer.Name); err == nil || !strings.Contains(err.Error(), utils.TruncateID(testContainer.ID)) {
+	if _, _, err := daemon.Create(&runconfig.Config{Image: GetTestImage(daemon).ID, Cmd: []string{"ls", "-al"}}, &runconfig.HostConfig{}, testContainer.Name); err == nil || !strings.Contains(err.Error(), utils.TruncateID(testContainer.ID)) {
 		t.Fatalf("Name conflict error doesn't include the correct short id. Message was: %s", err.Error())
 	}
 
 	// Make sure create with bad parameters returns an error
-	if _, _, err = daemon.Create(&runconfig.Config{Image: GetTestImage(daemon).ID}, ""); err == nil {
+	if _, _, err = daemon.Create(&runconfig.Config{Image: GetTestImage(daemon).ID}, &runconfig.HostConfig{}, ""); err == nil {
 		t.Fatal("Builder.Create should throw an error when Cmd is missing")
 	}
 
@@ -325,6 +327,7 @@ func TestDaemonCreate(t *testing.T) {
 			Image: GetTestImage(daemon).ID,
 			Cmd:   []string{},
 		},
+		&runconfig.HostConfig{},
 		"",
 	); err == nil {
 		t.Fatal("Builder.Create should throw an error when Cmd is empty")
@@ -335,7 +338,7 @@ func TestDaemonCreate(t *testing.T) {
 		Cmd:       []string{"/bin/ls"},
 		PortSpecs: []string{"80"},
 	}
-	container, _, err = daemon.Create(config, "")
+	container, _, err = daemon.Create(config, &runconfig.HostConfig{}, "")
 
 	_, err = daemon.Commit(container, "testrepo", "testtag", "", "", true, config)
 	if err != nil {
@@ -348,6 +351,7 @@ func TestDaemonCreate(t *testing.T) {
 		Cmd:       []string{"ls", "-al"},
 		PortSpecs: []string{"80:8000"},
 	},
+		&runconfig.HostConfig{},
 		"",
 	)
 	if err != nil {
@@ -365,7 +369,9 @@ func TestDestroy(t *testing.T) {
 	container, _, err := daemon.Create(&runconfig.Config{
 		Image: GetTestImage(daemon).ID,
 		Cmd:   []string{"ls", "-al"},
-	}, "")
+	},
+		&runconfig.HostConfig{},
+		"")
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -857,7 +863,9 @@ func TestDestroyWithInitLayer(t *testing.T) {
 	container, _, err := daemon.Create(&runconfig.Config{
 		Image: GetTestImage(daemon).ID,
 		Cmd:   []string{"ls", "-al"},
-	}, "")
+	},
+		&runconfig.HostConfig{},
+		"")
 
 	if err != nil {
 		t.Fatal(err)
diff --git a/integration/utils_test.go b/integration/utils_test.go
index fc80f19744..e1abfa72fc 100644
--- a/integration/utils_test.go
+++ b/integration/utils_test.go
@@ -263,7 +263,7 @@ func mkContainer(r *daemon.Daemon, args []string, t *testing.T) (*daemon.Contain
 	if config.Image == "_" {
 		config.Image = GetTestImage(r).ID
 	}
-	c, _, err := r.Create(config, "")
+	c, _, err := r.Create(config, nil, "")
 	if err != nil {
 		return nil, nil, err
 	}