diff --git a/railties/lib/generators/active_record/model/model_generator.rb b/railties/lib/generators/active_record/model/model_generator.rb
index 45e773fde1..53592c222f 100644
--- a/railties/lib/generators/active_record/model/model_generator.rb
+++ b/railties/lib/generators/active_record/model/model_generator.rb
@@ -8,7 +8,7 @@ module ActiveRecord
       conditional_class_option :timestamps
       conditional_class_option :migration
 
-      class_option :parent, :type => :string, :default => "ActiveRecord::Base",
+      class_option :parent, :type => :string,
                    :desc => "The parent class for the generated model"
 
       def create_model_file
@@ -17,13 +17,19 @@ module ActiveRecord
 
       # TODO Add migration support
       def create_migration_file
-#        unless options[:skip_migration]
+        if options[:migration] && options[:parent].nil?
 #          m.migration_template 'migration.rb', 'db/migrate', :assigns => {
 #            :migration_name => "Create#{class_name.pluralize.gsub(/::/, '')}"
 #          }, :migration_file_name => "create_#{file_path.gsub(/\//, '_').pluralize}"
-#        end
+        end
       end
 
+      protected
+
+        def parent_class_name
+          options[:parent] || "ActiveRecord::Base"
+        end
+
     end
   end
 end
diff --git a/railties/lib/generators/active_record/model/templates/model.rb b/railties/lib/generators/active_record/model/templates/model.rb
index fb337d10e6..21ae29e9f2 100644
--- a/railties/lib/generators/active_record/model/templates/model.rb
+++ b/railties/lib/generators/active_record/model/templates/model.rb
@@ -1,4 +1,4 @@
-class <%= class_name %> < <%= options[:parent] %>
+class <%= class_name %> < <%= parent_class_name.classify %>
 <% attributes.select {|attr| attr.reference? }.each do |attribute| -%>
   belongs_to :<%= attribute.name %>
 <% end -%>
diff --git a/railties/lib/generators/rails/model/USAGE b/railties/lib/generators/rails/model/USAGE
index 73c8b69153..b056d5df8b 100644
--- a/railties/lib/generators/rails/model/USAGE
+++ b/railties/lib/generators/rails/model/USAGE
@@ -12,6 +12,9 @@ Description:
     This generator invokes your configured ORM and test framework, which
     defaults to ActiveRecord and TestUnit.
 
+    Finally, if --parent option is given, it's used as superclass of the
+    created model. This allows you create Single Table Inheritance models.
+
 Examples:
     `./script/generate model account`
 
diff --git a/railties/lib/generators/rails/model_subclass/model_subclass_generator.rb b/railties/lib/generators/rails/model_subclass/model_subclass_generator.rb
new file mode 100644
index 0000000000..4649709780
--- /dev/null
+++ b/railties/lib/generators/rails/model_subclass/model_subclass_generator.rb
@@ -0,0 +1,11 @@
+module Rails
+  module Generators
+    class ModelSubclassGenerator < Base
+      desc "model_subclass is deprecated. Invoke model with --parent option instead."
+
+      def say_deprecation_warn
+         say self.class.desc
+      end
+    end
+  end
+end
diff --git a/railties/test/generators/model_generator_test.rb b/railties/test/generators/model_generator_test.rb
index 55c08d0199..62ad1d9305 100644
--- a/railties/test/generators/model_generator_test.rb
+++ b/railties/test/generators/model_generator_test.rb
@@ -16,6 +16,11 @@ class ModelGeneratorTest < GeneratorsTestCase
     assert_file "app/models/account.rb", /class Account < Admin::Account/
   end
 
+  def test_orm_with_underscored_parent_option
+    run_generator ["account", "--parent", "admin/account"]
+    assert_file "app/models/account.rb", /class Account < Admin::Account/
+  end
+
   def test_invokes_default_test_framework
     run_generator
     assert_file "test/unit/account_test.rb", /class AccountTest < ActiveSupport::TestCase/