diff --git a/actionpack/lib/action_dispatch/routing/route_set.rb b/actionpack/lib/action_dispatch/routing/route_set.rb
index 99a3019f3a..32f41934f1 100644
--- a/actionpack/lib/action_dispatch/routing/route_set.rb
+++ b/actionpack/lib/action_dispatch/routing/route_set.rb
@@ -1,6 +1,7 @@
 require 'rack/mount'
 require 'forwardable'
 require 'active_support/core_ext/object/to_query'
+require 'active_support/core_ext/hash/slice'
 
 module ActionDispatch
   module Routing
diff --git a/railties/lib/rails/application.rb b/railties/lib/rails/application.rb
index 0e85e6d1d5..2db131261c 100644
--- a/railties/lib/rails/application.rb
+++ b/railties/lib/rails/application.rb
@@ -85,13 +85,24 @@ module Rails
     end
 
     def reload_routes!
-      _routes = self.routes
-      _routes.disable_clear_and_finalize = true
-      _routes.clear!
+      routes_to_reload.each do |_routes, draw_block|
+        _routes = self.routes
+        _routes.disable_clear_and_finalize = true
+        _routes.clear!
+        _routes.draw(&draw_block) if draw_block
+      end
       routes_reloader.paths.each { |path| load(path) }
-      ActiveSupport.on_load(:action_controller) { _routes.finalize! }
+      routes_to_reload.each do |_routes, draw_block|
+        ActiveSupport.on_load(:action_controller) { _routes.finalize! }
+      end
     ensure
-      _routes.disable_clear_and_finalize = false
+      routes_to_reload.each do |_routes, draw_block|
+        _routes.disable_clear_and_finalize = false
+      end
+    end
+
+    def routes_to_reload
+      @routes_to_reload ||= {}
     end
 
     def initialize!
diff --git a/railties/lib/rails/engine.rb b/railties/lib/rails/engine.rb
index ababf6a242..aa82a82b19 100644
--- a/railties/lib/rails/engine.rb
+++ b/railties/lib/rails/engine.rb
@@ -399,8 +399,10 @@ module Rails
       }
     end
 
-    def routes
+    def routes(&block)
       @routes ||= ActionDispatch::Routing::RouteSet.new
+      self.routes_draw_block = block if block_given?
+      @routes
     end
 
     def initializers
@@ -447,6 +449,7 @@ module Rails
     end
 
     initializer :add_routing_paths do |app|
+      app.routes_to_reload[self.routes] = routes_draw_block
       paths.config.routes.to_a.each do |route|
         app.routes_reloader.paths.unshift(route) if File.exists?(route)
       end
@@ -499,6 +502,8 @@ module Rails
     end
 
   protected
+    attr_accessor :routes_draw_block
+
     def find_root_with_flag(flag, default=nil)
       root_path = self.class.called_from
 
diff --git a/railties/test/railties/engine_test.rb b/railties/test/railties/engine_test.rb
index 17bffe05e1..2b9d728b0c 100644
--- a/railties/test/railties/engine_test.rb
+++ b/railties/test/railties/engine_test.rb
@@ -663,5 +663,45 @@ module RailtiesTest
 
       assert_equal AppTemplate._railtie, AppTemplate::Engine
     end
+
+    test "properly reload routes" do
+      # when routes are inside application class definition
+      # they should not be reloaded when engine's routes
+      # file has changed
+      add_to_config <<-RUBY
+        routes do
+          mount lambda{|env| [200, {}, ["foo"]]} => "/foo"
+          mount Bukkits::Engine => "/bukkits"
+        end
+      RUBY
+
+      FileUtils.rm(File.join(app_path, "config/routes.rb"))
+
+      @plugin.write "config/routes.rb", <<-RUBY
+        Bukkits::Engine.routes.draw do
+          mount lambda{|env| [200, {}, ["bar"]]} => "/bar"
+        end
+      RUBY
+
+      @plugin.write "lib/bukkits.rb", <<-RUBY
+        module Bukkits
+          class Engine < ::Rails::Engine
+            namespace(Bukkits)
+          end
+        end
+      RUBY
+
+      require 'rack/test'
+      extend Rack::Test::Methods
+
+      boot_rails
+
+      require "#{rails_root}/config/environment"
+      get "/foo"
+      assert_equal "foo", last_response.body
+
+      get "/bukkits/bar"
+      assert_equal "bar", last_response.body
+    end
   end
 end