diff --git a/app/helpers/groups_helper.rb b/app/helpers/groups_helper.rb
index 82bceddf1f0..676c1d1988b 100644
--- a/app/helpers/groups_helper.rb
+++ b/app/helpers/groups_helper.rb
@@ -7,7 +7,12 @@ module GroupsHelper
     can?(current_user, :change_share_with_group_lock, group)
   end
 
-  def group_icon(group)
+  def group_icon(group, options = {})
+    img_path = group_icon_url(group, options)
+    image_tag img_path, options
+  end
+
+  def group_icon_url(group, options = {})
     if group.is_a?(String)
       group = Group.find_by_full_path(group)
     end
@@ -89,7 +94,7 @@ module GroupsHelper
     link_to(group_path(group), class: "group-path #{'breadcrumb-item-text' unless for_dropdown} js-breadcrumb-item-text #{'hidable' if hidable}") do
       output =
         if (group.try(:avatar_url) || show_avatar) && !Rails.env.test?
-          image_tag(group_icon(group), class: "avatar-tile", width: 15, height: 15)
+          group_icon(group, class: "avatar-tile", width: 15, height: 15)
         else
           ""
         end
diff --git a/app/helpers/lazy_image_tag_helper.rb b/app/helpers/lazy_image_tag_helper.rb
index 2c5619ac41b..603b9438e35 100644
--- a/app/helpers/lazy_image_tag_helper.rb
+++ b/app/helpers/lazy_image_tag_helper.rb
@@ -10,6 +10,7 @@ module LazyImageTagHelper
     unless options.delete(:lazy) == false
       options[:data] ||= {}
       options[:data][:src] = path_to_image(source)
+
       options[:class] ||= ""
       options[:class] << " lazy"
 
diff --git a/app/models/concerns/avatarable.rb b/app/models/concerns/avatarable.rb
index 8fbfed11bdf..2ec70203710 100644
--- a/app/models/concerns/avatarable.rb
+++ b/app/models/concerns/avatarable.rb
@@ -11,7 +11,7 @@ module Avatarable
 
     # If asset_host is set then it is expected that assets are handled by a standalone host.
     # That means we do not want to get GitLab's relative_url_root option anymore.
-    host = asset_host.present? ? asset_host : gitlab_host
+    host = (asset_host.present? && (!respond_to?(:public?) || public?)) ? asset_host : gitlab_host
 
     [host, avatar.url].join
   end
diff --git a/app/serializers/group_entity.rb b/app/serializers/group_entity.rb
index 7c872a3e986..6d8466da902 100644
--- a/app/serializers/group_entity.rb
+++ b/app/serializers/group_entity.rb
@@ -45,6 +45,6 @@ class GroupEntity < Grape::Entity
   end
 
   expose :avatar_url do |group|
-    group_icon(group)
+    group_icon_url(group)
   end
 end
diff --git a/app/views/admin/groups/_group.html.haml b/app/views/admin/groups/_group.html.haml
index e3a77dfdf10..47cc2d4d27e 100644
--- a/app/views/admin/groups/_group.html.haml
+++ b/app/views/admin/groups/_group.html.haml
@@ -20,7 +20,7 @@
       = visibility_level_icon(group.visibility_level, fw: false)
 
   .avatar-container.s40
-    = image_tag group_icon(group), class: "avatar s40 hidden-xs"
+    = group_icon(group, class: "avatar s40 hidden-xs")
   .title
     = link_to [:admin, group], class: 'group-name' do
       = group.full_name
diff --git a/app/views/admin/groups/show.html.haml b/app/views/admin/groups/show.html.haml
index 3e02f7b1e16..2545cecc721 100644
--- a/app/views/admin/groups/show.html.haml
+++ b/app/views/admin/groups/show.html.haml
@@ -16,7 +16,7 @@
       %ul.well-list
         %li
           .avatar-container.s60
-            = image_tag group_icon(@group), class: "avatar s60"
+            = group_icon(@group, class: "avatar s60")
         %li
           %span.light Name:
           %strong= @group.name
diff --git a/app/views/groups/_home_panel.html.haml b/app/views/groups/_home_panel.html.haml
index 181c7bee702..a0760c2073b 100644
--- a/app/views/groups/_home_panel.html.haml
+++ b/app/views/groups/_home_panel.html.haml
@@ -1,7 +1,7 @@
 .group-home-panel.text-center
   %div{ class: container_class }
     .avatar-container.s70.group-avatar
-      = image_tag group_icon(@group), class: "avatar s70 avatar-tile"
+      = group_icon(@group, class: "avatar s70 avatar-tile")
     %h1.group-title
       = @group.name
       %span.visibility-icon.has-tooltip{ data: { container: 'body' }, title: visibility_icon_description(@group) }
diff --git a/app/views/groups/edit.html.haml b/app/views/groups/edit.html.haml
index 15606dd30fd..16038ef2f79 100644
--- a/app/views/groups/edit.html.haml
+++ b/app/views/groups/edit.html.haml
@@ -10,7 +10,7 @@
       .form-group
         .col-sm-offset-2.col-sm-10
           .avatar-container.s160
-            = image_tag group_icon(@group), alt: '', class: 'avatar group-avatar s160'
+            = group_icon(@group, alt: '', class: 'avatar group-avatar s160')
           %p.light
             - if @group.avatar?
               You can change your group avatar here
diff --git a/app/views/layouts/nav/sidebar/_group.html.haml b/app/views/layouts/nav/sidebar/_group.html.haml
index 8cba495f7e4..0bf318b0b66 100644
--- a/app/views/layouts/nav/sidebar/_group.html.haml
+++ b/app/views/layouts/nav/sidebar/_group.html.haml
@@ -6,7 +6,7 @@
     .context-header
       = link_to group_path(@group), title: @group.name do
         .avatar-container.s40.group-avatar
-          = image_tag group_icon(@group), class: "avatar s40 avatar-tile"
+          = group_icon(@group, class: "avatar s40 avatar-tile")
         .sidebar-context-title
           = @group.name
     %ul.sidebar-top-level-items
diff --git a/app/views/shared/groups/_group.html.haml b/app/views/shared/groups/_group.html.haml
index b361ec86ced..63f62eb476e 100644
--- a/app/views/shared/groups/_group.html.haml
+++ b/app/views/shared/groups/_group.html.haml
@@ -28,7 +28,7 @@
 
   .avatar-container.s40
     = link_to group do
-      = image_tag group_icon(group), class: "avatar s40 hidden-xs"
+      = group_icon(group, class: "avatar s40 hidden-xs")
   .title
     = link_to group_name, group, class: 'group-name'
 
diff --git a/app/views/shared/members/_group.html.haml b/app/views/shared/members/_group.html.haml
index bcdad3c153a..5868c52566d 100644
--- a/app/views/shared/members/_group.html.haml
+++ b/app/views/shared/members/_group.html.haml
@@ -4,7 +4,7 @@
 - dom_id = "group_member_#{group_link.id}"
 %li.member.group_member{ id: dom_id }
   %span.list-item-name
-    = image_tag group_icon(group), class: "avatar s40", alt: ''
+    = group_icon(group, class: "avatar s40", alt: '')
     %strong
       = link_to group.full_name, group_path(group)
     .cgray
diff --git a/app/views/users/_groups.html.haml b/app/views/users/_groups.html.haml
index eff6c80d144..55799e10a46 100644
--- a/app/views/users/_groups.html.haml
+++ b/app/views/users/_groups.html.haml
@@ -2,4 +2,4 @@
   - groups.each do |group|
     = link_to group, class: 'profile-groups-avatars inline', title: group.name do
       .avatar-container.s40
-        = image_tag group_icon(group), class: 'avatar group-avatar s40'
+        = group_icon(group, class: 'avatar group-avatar s40')
diff --git a/spec/helpers/application_helper_spec.rb b/spec/helpers/application_helper_spec.rb
index 10bc5f2ecd2..87ae1fa5660 100644
--- a/spec/helpers/application_helper_spec.rb
+++ b/spec/helpers/application_helper_spec.rb
@@ -57,15 +57,17 @@ describe ApplicationHelper do
   end
 
   describe 'project_icon' do
+    let(:asset_host) { 'http://assets' }
+
     it 'returns an url for the avatar' do
-      project = create(:project, avatar: File.open(uploaded_image_temp_path))
+      project = create(:project, :public, avatar: File.open(uploaded_image_temp_path))
       avatar_url = "/uploads/-/system/project/avatar/#{project.id}/banana_sample.gif"
 
       expect(helper.project_icon(project.full_path).to_s)
         .to eq "<img data-src=\"#{avatar_url}\" class=\" lazy\" src=\"#{LazyImageTagHelper.placeholder_image}\" />"
 
-      allow(ActionController::Base).to receive(:asset_host).and_return(gitlab_host)
-      avatar_url = "#{gitlab_host}/uploads/-/system/project/avatar/#{project.id}/banana_sample.gif"
+      allow(ActionController::Base).to receive(:asset_host).and_return(asset_host)
+      avatar_url = "#{asset_host}/uploads/-/system/project/avatar/#{project.id}/banana_sample.gif"
 
       expect(helper.project_icon(project.full_path).to_s)
         .to eq "<img data-src=\"#{avatar_url}\" class=\" lazy\" src=\"#{LazyImageTagHelper.placeholder_image}\" />"
diff --git a/spec/helpers/groups_helper_spec.rb b/spec/helpers/groups_helper_spec.rb
index 76e5964ccf7..97f0ed4904e 100644
--- a/spec/helpers/groups_helper_spec.rb
+++ b/spec/helpers/groups_helper_spec.rb
@@ -3,6 +3,8 @@ require 'spec_helper'
 describe GroupsHelper do
   include ApplicationHelper
 
+  let(:asset_host) { 'http://assets' }
+
   describe 'group_icon' do
     avatar_file_path = File.join(Rails.root, 'spec', 'fixtures', 'banana_sample.gif')
 
@@ -10,14 +12,53 @@ describe GroupsHelper do
       group = create(:group)
       group.avatar = fixture_file_upload(avatar_file_path)
       group.save!
-      expect(group_icon(group.path).to_s)
+
+      avatar_url = "/uploads/-/system/group/avatar/#{group.id}/banana_sample.gif"
+
+      expect(helper.group_icon(group).to_s)
+        .to eq "<img data-src=\"#{avatar_url}\" class=\" lazy\" src=\"#{LazyImageTagHelper.placeholder_image}\" />"
+
+      allow(ActionController::Base).to receive(:asset_host).and_return(asset_host)
+      avatar_url = "#{asset_host}/uploads/-/system/group/avatar/#{group.id}/banana_sample.gif"
+
+      expect(helper.group_icon(group).to_s)
+        .to eq "<img data-src=\"#{avatar_url}\" class=\" lazy\" src=\"#{LazyImageTagHelper.placeholder_image}\" />"
+    end
+  end
+
+  describe 'group_icon_url' do
+    avatar_file_path = File.join(Rails.root, 'spec', 'fixtures', 'banana_sample.gif')
+
+    it 'returns an url for the avatar' do
+      group = create(:group)
+      group.avatar = fixture_file_upload(avatar_file_path)
+      group.save!
+      expect(group_icon_url(group.path).to_s)
+        .to match("/uploads/-/system/group/avatar/#{group.id}/banana_sample.gif")
+    end
+
+    it 'returns an CDN url for the avatar' do
+      allow(ActionController::Base).to receive(:asset_host).and_return(asset_host)
+      group = create(:group)
+      group.avatar = fixture_file_upload(avatar_file_path)
+      group.save!
+      expect(group_icon_url(group.path).to_s)
+        .to match("#{asset_host}/uploads/-/system/group/avatar/#{group.id}/banana_sample.gif")
+    end
+
+    it 'returns an based url for the avatar if private' do
+      allow(ActionController::Base).to receive(:asset_host).and_return(asset_host)
+      group = create(:group, :private)
+      group.avatar = fixture_file_upload(avatar_file_path)
+      group.save!
+      expect(group_icon_url(group.path).to_s)
         .to match("/uploads/-/system/group/avatar/#{group.id}/banana_sample.gif")
     end
 
     it 'gives default avatar_icon when no avatar is present' do
       group = create(:group)
       group.save!
-      expect(group_icon(group.path)).to match_asset_path('group_avatar.png')
+      expect(group_icon_url(group.path)).to match_asset_path('group_avatar.png')
     end
   end
 
diff --git a/spec/models/project_spec.rb b/spec/models/project_spec.rb
index a26c71e5155..cf26dbfea49 100644
--- a/spec/models/project_spec.rb
+++ b/spec/models/project_spec.rb
@@ -874,7 +874,7 @@ describe Project do
     let(:project) { create(:project) }
 
     context 'when avatar file is uploaded' do
-      let(:project) { create(:project, :with_avatar) }
+      let(:project) { create(:project, :public, :with_avatar) }
       let(:avatar_path) { "/uploads/-/system/project/avatar/#{project.id}/dk.png" }
       let(:gitlab_host) { "http://#{Gitlab.config.gitlab.host}" }