diff --git a/cmd/kube-controller-manager/app/extensions.go b/cmd/kube-controller-manager/app/extensions.go
index f349ecbe212..a3218496fa7 100644
--- a/cmd/kube-controller-manager/app/extensions.go
+++ b/cmd/kube-controller-manager/app/extensions.go
@@ -36,7 +36,6 @@ func startDaemonSetController(ctx ControllerContext) (bool, error) {
 		ctx.InformerFactory.Core().V1().Pods(),
 		ctx.InformerFactory.Core().V1().Nodes(),
 		ctx.ClientBuilder.ClientOrDie("daemon-set-controller"),
-		int(ctx.Options.LookupCacheSizeForDaemonSet),
 	).Run(int(ctx.Options.ConcurrentDaemonSetSyncs), ctx.Stop)
 	return true, nil
 }
diff --git a/cmd/kube-controller-manager/app/options/options.go b/cmd/kube-controller-manager/app/options/options.go
index 92d851e9cc3..b0a3cb0cb85 100644
--- a/cmd/kube-controller-manager/app/options/options.go
+++ b/cmd/kube-controller-manager/app/options/options.go
@@ -134,7 +134,9 @@ func (s *CMServer) AddFlags(fs *pflag.FlagSet, allControllers []string, disabled
 	fs.Int32Var(&s.ConcurrentSATokenSyncs, "concurrent-serviceaccount-token-syncs", s.ConcurrentSATokenSyncs, "The number of service account token objects that are allowed to sync concurrently. Larger number = more responsive token generation, but more CPU (and network) load")
 	fs.Int32Var(&s.LookupCacheSizeForRC, "replication-controller-lookup-cache-size", s.LookupCacheSizeForRC, "This flag is deprecated and will be removed in future releases. ReplicationController no longer requires a lookup cache.")
 	fs.Int32Var(&s.LookupCacheSizeForRS, "replicaset-lookup-cache-size", s.LookupCacheSizeForRS, "This flag is deprecated and will be removed in future releases. ReplicaSet no longer requires a lookup cache.")
-	fs.Int32Var(&s.LookupCacheSizeForDaemonSet, "daemonset-lookup-cache-size", s.LookupCacheSizeForDaemonSet, "The the size of lookup cache for daemonsets. Larger number = more responsive daemonsets, but more MEM load.")
+	// TODO: Remove the following flag 6 months after v1.6.0 is released.
+	fs.Int32Var(&s.LookupCacheSizeForDaemonSet, "daemonset-lookup-cache-size", s.LookupCacheSizeForDaemonSet, "This flag is deprecated and will be removed in future releases. DaemonSet no longer requires a lookup cache.")
+	fs.MarkDeprecated("daemonset-lookup-cache-size", "This flag is deprecated and will be removed in future releases. DaemonSet no longer requires a lookup cache.")
 	fs.DurationVar(&s.ServiceSyncPeriod.Duration, "service-sync-period", s.ServiceSyncPeriod.Duration, "The period for syncing services with their external load balancers")
 	fs.DurationVar(&s.NodeSyncPeriod.Duration, "node-sync-period", 0, ""+
 		"This flag is deprecated and will be removed in future releases. See node-monitor-period for Node health checking or "+
diff --git a/pkg/apis/componentconfig/types.go b/pkg/apis/componentconfig/types.go
index 9c6d6afbf37..e3d229d7d4e 100644
--- a/pkg/apis/componentconfig/types.go
+++ b/pkg/apis/componentconfig/types.go
@@ -690,6 +690,7 @@ type KubeControllerManagerConfiguration struct {
 	LookupCacheSizeForRS int32
 	// lookupCacheSizeForDaemonSet is the size of lookup cache for daemonsets.
 	// Larger number = more responsive daemonset, but more MEM load.
+	// DEPRECATED: This is no longer used.
 	LookupCacheSizeForDaemonSet int32
 	// serviceSyncPeriod is the period for syncing services with their external
 	// load balancers.
diff --git a/pkg/client/listers/extensions/internalversion/daemonset_expansion.go b/pkg/client/listers/extensions/internalversion/daemonset_expansion.go
index c5073f3bca6..15c7cc7ea89 100644
--- a/pkg/client/listers/extensions/internalversion/daemonset_expansion.go
+++ b/pkg/client/listers/extensions/internalversion/daemonset_expansion.go
@@ -35,8 +35,9 @@ type DaemonSetListerExpansion interface {
 // DaemonSetNamespaeLister.
 type DaemonSetNamespaceListerExpansion interface{}
 
-// GetPodDaemonSets returns a list of daemon sets managing a pod.
-// Returns an error if and only if no matching daemon sets are found.
+// GetPodDaemonSets returns a list of DaemonSets that potentially match a pod.
+// Only the one specified in the Pod's ControllerRef will actually manage it.
+// Returns an error only if no matching DaemonSets are found.
 func (s *daemonSetLister) GetPodDaemonSets(pod *api.Pod) ([]*extensions.DaemonSet, error) {
 	var selector labels.Selector
 	var daemonSet *extensions.DaemonSet
diff --git a/pkg/client/listers/extensions/v1beta1/daemonset_expansion.go b/pkg/client/listers/extensions/v1beta1/daemonset_expansion.go
index d3497414e99..b2144df4afc 100644
--- a/pkg/client/listers/extensions/v1beta1/daemonset_expansion.go
+++ b/pkg/client/listers/extensions/v1beta1/daemonset_expansion.go
@@ -35,8 +35,9 @@ type DaemonSetListerExpansion interface {
 // DaemonSetNamespaeLister.
 type DaemonSetNamespaceListerExpansion interface{}
 
-// GetPodDaemonSets returns a list of daemon sets managing a pod.
-// Returns an error if and only if no matching daemon sets are found.
+// GetPodDaemonSets returns a list of DaemonSets that potentially match a pod.
+// Only the one specified in the Pod's ControllerRef will actually manage it.
+// Returns an error only if no matching DaemonSets are found.
 func (s *daemonSetLister) GetPodDaemonSets(pod *v1.Pod) ([]*v1beta1.DaemonSet, error) {
 	var selector labels.Selector
 	var daemonSet *v1beta1.DaemonSet
diff --git a/pkg/controller/controller_utils.go b/pkg/controller/controller_utils.go
index e090ee93fbf..48d963b7951 100644
--- a/pkg/controller/controller_utils.go
+++ b/pkg/controller/controller_utils.go
@@ -400,8 +400,9 @@ func (r RealRSControl) PatchReplicaSet(namespace, name string, data []byte) erro
 type PodControlInterface interface {
 	// CreatePods creates new pods according to the spec.
 	CreatePods(namespace string, template *v1.PodTemplateSpec, object runtime.Object) error
-	// CreatePodsOnNode creates a new pod according to the spec on the specified node.
-	CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object) error
+	// CreatePodsOnNode creates a new pod according to the spec on the specified node,
+	// and sets the ControllerRef.
+	CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object, controllerRef *metav1.OwnerReference) error
 	// CreatePodsWithControllerRef creates new pods according to the spec, and sets object as the pod's controller.
 	CreatePodsWithControllerRef(namespace string, template *v1.PodTemplateSpec, object runtime.Object, controllerRef *metav1.OwnerReference) error
 	// DeletePod deletes the pod identified by podID.
@@ -466,11 +467,7 @@ func getPodsPrefix(controllerName string) string {
 	return prefix
 }
 
-func (r RealPodControl) CreatePods(namespace string, template *v1.PodTemplateSpec, object runtime.Object) error {
-	return r.createPods("", namespace, template, object, nil)
-}
-
-func (r RealPodControl) CreatePodsWithControllerRef(namespace string, template *v1.PodTemplateSpec, controllerObject runtime.Object, controllerRef *metav1.OwnerReference) error {
+func validateControllerRef(controllerRef *metav1.OwnerReference) error {
 	if controllerRef == nil {
 		return fmt.Errorf("controllerRef is nil")
 	}
@@ -481,16 +478,30 @@ func (r RealPodControl) CreatePodsWithControllerRef(namespace string, template *
 		return fmt.Errorf("controllerRef has empty Kind")
 	}
 	if controllerRef.Controller == nil || *controllerRef.Controller != true {
-		return fmt.Errorf("controllerRef.Controller is not set")
+		return fmt.Errorf("controllerRef.Controller is not set to true")
 	}
 	if controllerRef.BlockOwnerDeletion == nil || *controllerRef.BlockOwnerDeletion != true {
 		return fmt.Errorf("controllerRef.BlockOwnerDeletion is not set")
 	}
+	return nil
+}
+
+func (r RealPodControl) CreatePods(namespace string, template *v1.PodTemplateSpec, object runtime.Object) error {
+	return r.createPods("", namespace, template, object, nil)
+}
+
+func (r RealPodControl) CreatePodsWithControllerRef(namespace string, template *v1.PodTemplateSpec, controllerObject runtime.Object, controllerRef *metav1.OwnerReference) error {
+	if err := validateControllerRef(controllerRef); err != nil {
+		return err
+	}
 	return r.createPods("", namespace, template, controllerObject, controllerRef)
 }
 
-func (r RealPodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object) error {
-	return r.createPods(nodeName, namespace, template, object, nil)
+func (r RealPodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object, controllerRef *metav1.OwnerReference) error {
+	if err := validateControllerRef(controllerRef); err != nil {
+		return err
+	}
+	return r.createPods(nodeName, namespace, template, object, controllerRef)
 }
 
 func (r RealPodControl) PatchPod(namespace, name string, data []byte) error {
@@ -613,10 +624,11 @@ func (f *FakePodControl) CreatePodsWithControllerRef(namespace string, spec *v1.
 	return nil
 }
 
-func (f *FakePodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object) error {
+func (f *FakePodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object, controllerRef *metav1.OwnerReference) error {
 	f.Lock()
 	defer f.Unlock()
 	f.Templates = append(f.Templates, *template)
+	f.ControllerRefs = append(f.ControllerRefs, *controllerRef)
 	if f.Err != nil {
 		return f.Err
 	}
diff --git a/pkg/controller/daemon/BUILD b/pkg/controller/daemon/BUILD
index 1301d9f1043..d3ed2e45f51 100644
--- a/pkg/controller/daemon/BUILD
+++ b/pkg/controller/daemon/BUILD
@@ -73,11 +73,13 @@ go_test(
         "//vendor:k8s.io/apimachinery/pkg/apis/meta/v1",
         "//vendor:k8s.io/apimachinery/pkg/runtime",
         "//vendor:k8s.io/apimachinery/pkg/util/intstr",
+        "//vendor:k8s.io/apimachinery/pkg/util/uuid",
         "//vendor:k8s.io/apiserver/pkg/storage/names",
         "//vendor:k8s.io/apiserver/pkg/util/feature",
         "//vendor:k8s.io/client-go/testing",
         "//vendor:k8s.io/client-go/tools/cache",
         "//vendor:k8s.io/client-go/tools/record",
+        "//vendor:k8s.io/client-go/util/workqueue",
     ],
 )
 
diff --git a/pkg/controller/daemon/daemoncontroller.go b/pkg/controller/daemon/daemoncontroller.go
index 62c100e4f60..8d86376593c 100644
--- a/pkg/controller/daemon/daemoncontroller.go
+++ b/pkg/controller/daemon/daemoncontroller.go
@@ -72,6 +72,9 @@ const (
 	FailedDaemonPodReason = "FailedDaemonPod"
 )
 
+// controllerKind contains the schema.GroupVersionKind for this controller type.
+var controllerKind = extensions.SchemeGroupVersion.WithKind("DaemonSet")
+
 // DaemonSetsController is responsible for synchronizing DaemonSet objects stored
 // in the system with actual running pods.
 type DaemonSetsController struct {
@@ -105,13 +108,11 @@ type DaemonSetsController struct {
 	// Added as a member to the struct to allow injection for testing.
 	nodeStoreSynced cache.InformerSynced
 
-	lookupCache *controller.MatchingCache
-
 	// DaemonSet keys that need to be synced.
 	queue workqueue.RateLimitingInterface
 }
 
-func NewDaemonSetsController(daemonSetInformer extensionsinformers.DaemonSetInformer, podInformer coreinformers.PodInformer, nodeInformer coreinformers.NodeInformer, kubeClient clientset.Interface, lookupCacheSize int) *DaemonSetsController {
+func NewDaemonSetsController(daemonSetInformer extensionsinformers.DaemonSetInformer, podInformer coreinformers.PodInformer, nodeInformer coreinformers.NodeInformer, kubeClient clientset.Interface) *DaemonSetsController {
 	eventBroadcaster := record.NewBroadcaster()
 	eventBroadcaster.StartLogging(glog.Infof)
 	// TODO: remove the wrapper when every clients have moved to use the clientset.
@@ -141,21 +142,6 @@ func NewDaemonSetsController(daemonSetInformer extensionsinformers.DaemonSetInfo
 		UpdateFunc: func(old, cur interface{}) {
 			oldDS := old.(*extensions.DaemonSet)
 			curDS := cur.(*extensions.DaemonSet)
-			// We should invalidate the whole lookup cache if a DS's selector has been updated.
-			//
-			// Imagine that you have two RSs:
-			// * old DS1
-			// * new DS2
-			// You also have a pod that is attached to DS2 (because it doesn't match DS1 selector).
-			// Now imagine that you are changing DS1 selector so that it is now matching that pod,
-			// in such case we must invalidate the whole cache so that pod could be adopted by DS1
-			//
-			// This makes the lookup cache less helpful, but selector update does not happen often,
-			// so it's not a big problem
-			if !reflect.DeepEqual(oldDS.Spec.Selector, curDS.Spec.Selector) {
-				dsc.lookupCache.InvalidateAll()
-			}
-
 			glog.V(4).Infof("Updating daemon set %s", oldDS.Name)
 			dsc.enqueueDaemonSet(curDS)
 		},
@@ -184,7 +170,6 @@ func NewDaemonSetsController(daemonSetInformer extensionsinformers.DaemonSetInfo
 
 	dsc.syncHandler = dsc.syncDaemonSet
 	dsc.enqueueDaemonSet = dsc.enqueue
-	dsc.lookupCache = controller.NewMatchingCache(lookupCacheSize)
 	return dsc
 }
 
@@ -273,78 +258,57 @@ func (dsc *DaemonSetsController) enqueueDaemonSetAfter(obj interface{}, after ti
 	dsc.queue.AddAfter(key, after)
 }
 
-func (dsc *DaemonSetsController) getPodDaemonSet(pod *v1.Pod) *extensions.DaemonSet {
-	// look up in the cache, if cached and the cache is valid, just return cached value
-	if obj, cached := dsc.lookupCache.GetMatchingObject(pod); cached {
-		ds, ok := obj.(*extensions.DaemonSet)
-		if !ok {
-			// This should not happen
-			utilruntime.HandleError(fmt.Errorf("lookup cache does not return a DaemonSet object"))
-			return nil
-		}
-		if dsc.isCacheValid(pod, ds) {
-			return ds
-		}
-	}
+// getPodDaemonSets returns a list of DaemonSets that potentially match the pod.
+func (dsc *DaemonSetsController) getPodDaemonSets(pod *v1.Pod) []*extensions.DaemonSet {
 	sets, err := dsc.dsLister.GetPodDaemonSets(pod)
 	if err != nil {
-		glog.V(4).Infof("No daemon sets found for pod %v, daemon set controller will avoid syncing", pod.Name)
 		return nil
 	}
 	if len(sets) > 1 {
-		// More than two items in this list indicates user error. If two daemon
-		// sets overlap, sort by creation timestamp, subsort by name, then pick
-		// the first.
+		// ControllerRef will ensure we don't do anythign crazy, but more than one
+		// item in this list nevertheless constitutes user error.
 		utilruntime.HandleError(fmt.Errorf("user error! more than one daemon is selecting pods with labels: %+v", pod.Labels))
-		sort.Sort(byCreationTimestamp(sets))
 	}
-
-	// update lookup cache
-	dsc.lookupCache.Update(pod, sets[0])
-
-	return sets[0]
-}
-
-// isCacheValid check if the cache is valid
-func (dsc *DaemonSetsController) isCacheValid(pod *v1.Pod, cachedDS *extensions.DaemonSet) bool {
-	_, err := dsc.dsLister.DaemonSets(cachedDS.Namespace).Get(cachedDS.Name)
-	// ds has been deleted or updated, cache is invalid
-	if err != nil || !isDaemonSetMatch(pod, cachedDS) {
-		return false
-	}
-	return true
-}
-
-// isDaemonSetMatch take a Pod and DaemonSet, return whether the Pod and DaemonSet are matching
-// TODO(mqliang): This logic is a copy from GetPodDaemonSets(), remove the duplication
-func isDaemonSetMatch(pod *v1.Pod, ds *extensions.DaemonSet) bool {
-	if ds.Namespace != pod.Namespace {
-		return false
-	}
-	selector, err := metav1.LabelSelectorAsSelector(ds.Spec.Selector)
-	if err != nil {
-		err = fmt.Errorf("invalid selector: %v", err)
-		return false
-	}
-
-	// If a ReplicaSet with a nil or empty selector creeps in, it should match nothing, not everything.
-	if selector.Empty() || !selector.Matches(labels.Set(pod.Labels)) {
-		return false
-	}
-	return true
+	return sets
 }
 
 func (dsc *DaemonSetsController) addPod(obj interface{}) {
 	pod := obj.(*v1.Pod)
-	glog.V(4).Infof("Pod %s added.", pod.Name)
-	if ds := dsc.getPodDaemonSet(pod); ds != nil {
-		dsKey, err := controller.KeyFunc(ds)
-		if err != nil {
-			utilruntime.HandleError(fmt.Errorf("Couldn't get key for object %#v: %v", ds, err))
+
+	if pod.DeletionTimestamp != nil {
+		// on a restart of the controller manager, it's possible a new pod shows up in a state that
+		// is already pending deletion. Prevent the pod from being a creation observation.
+		dsc.deletePod(pod)
+		return
+	}
+
+	// If it has a ControllerRef, that's all that matters.
+	if controllerRef := controller.GetControllerOf(pod); controllerRef != nil {
+		ds := dsc.resolveControllerRef(pod.Namespace, controllerRef)
+		if ds == nil {
 			return
 		}
+		dsKey, err := controller.KeyFunc(ds)
+		if err != nil {
+			return
+		}
+		glog.V(4).Infof("Pod %s added.", pod.Name)
 		dsc.expectations.CreationObserved(dsKey)
 		dsc.enqueueDaemonSet(ds)
+		return
+	}
+
+	// Otherwise, it's an orphan. Get a list of all matching DaemonSets and sync
+	// them to see if anyone wants to adopt it.
+	// DO NOT observe creation because no controller should be waiting for an
+	// orphan.
+	dss := dsc.getPodDaemonSets(pod)
+	if len(dss) == 0 {
+		return
+	}
+	glog.V(4).Infof("Orphan Pod %s added.", pod.Name)
+	for _, ds := range dss {
+		dsc.enqueueDaemonSet(ds)
 	}
 }
 
@@ -359,24 +323,44 @@ func (dsc *DaemonSetsController) updatePod(old, cur interface{}) {
 		// Two different versions of the same pod will always have different RVs.
 		return
 	}
-	glog.V(4).Infof("Pod %s updated.", curPod.Name)
 	changedToReady := !v1.IsPodReady(oldPod) && v1.IsPodReady(curPod)
-	if curDS := dsc.getPodDaemonSet(curPod); curDS != nil {
-		dsc.enqueueDaemonSet(curDS)
+	labelChanged := !reflect.DeepEqual(curPod.Labels, oldPod.Labels)
 
-		// See https://github.com/kubernetes/kubernetes/pull/38076 for more details
-		if changedToReady && curDS.Spec.MinReadySeconds > 0 {
-			dsc.enqueueDaemonSetAfter(curDS, time.Duration(curDS.Spec.MinReadySeconds)*time.Second)
+	curControllerRef := controller.GetControllerOf(curPod)
+	oldControllerRef := controller.GetControllerOf(oldPod)
+	controllerRefChanged := !reflect.DeepEqual(curControllerRef, oldControllerRef)
+	if controllerRefChanged && oldControllerRef != nil {
+		// The ControllerRef was changed. Sync the old controller, if any.
+		if ds := dsc.resolveControllerRef(oldPod.Namespace, oldControllerRef); ds != nil {
+			dsc.enqueueDaemonSet(ds)
 		}
 	}
-	// If the labels have not changed, then the daemon set responsible for
-	// the pod is the same as it was before. In that case we have enqueued the daemon
-	// set above, and do not have to enqueue the set again.
-	if !reflect.DeepEqual(curPod.Labels, oldPod.Labels) {
-		// It's ok if both oldDS and curDS are the same, because curDS will set
-		// the expectations on its run so oldDS will have no effect.
-		if oldDS := dsc.getPodDaemonSet(oldPod); oldDS != nil {
-			dsc.enqueueDaemonSet(oldDS)
+
+	// If it has a ControllerRef, that's all that matters.
+	if curControllerRef != nil {
+		ds := dsc.resolveControllerRef(curPod.Namespace, curControllerRef)
+		if ds == nil {
+			return
+		}
+		glog.V(4).Infof("Pod %s updated.", curPod.Name)
+		dsc.enqueueDaemonSet(ds)
+		// See https://github.com/kubernetes/kubernetes/pull/38076 for more details
+		if changedToReady && ds.Spec.MinReadySeconds > 0 {
+			dsc.enqueueDaemonSetAfter(ds, time.Duration(ds.Spec.MinReadySeconds)*time.Second)
+		}
+		return
+	}
+
+	// Otherwise, it's an orphan. If anything changed, sync matching controllers
+	// to see if anyone wants to adopt it now.
+	dss := dsc.getPodDaemonSets(curPod)
+	if len(dss) == 0 {
+		return
+	}
+	glog.V(4).Infof("Orphan Pod %s updated.", curPod.Name)
+	if labelChanged || controllerRefChanged {
+		for _, ds := range dss {
+			dsc.enqueueDaemonSet(ds)
 		}
 	}
 }
@@ -391,25 +375,32 @@ func (dsc *DaemonSetsController) deletePod(obj interface{}) {
 	if !ok {
 		tombstone, ok := obj.(cache.DeletedFinalStateUnknown)
 		if !ok {
-			utilruntime.HandleError(fmt.Errorf("Couldn't get object from tombstone %#v", obj))
+			utilruntime.HandleError(fmt.Errorf("couldn't get object from tombstone %#v", obj))
 			return
 		}
 		pod, ok = tombstone.Obj.(*v1.Pod)
 		if !ok {
-			utilruntime.HandleError(fmt.Errorf("Tombstone contained object that is not a pod %#v", obj))
+			utilruntime.HandleError(fmt.Errorf("tombstone contained object that is not a pod %#v", obj))
 			return
 		}
 	}
+
+	controllerRef := controller.GetControllerOf(pod)
+	if controllerRef == nil {
+		// No controller should care about orphans being deleted.
+		return
+	}
+	ds := dsc.resolveControllerRef(pod.Namespace, controllerRef)
+	if ds == nil {
+		return
+	}
+	dsKey, err := controller.KeyFunc(ds)
+	if err != nil {
+		return
+	}
 	glog.V(4).Infof("Pod %s deleted.", pod.Name)
-	if ds := dsc.getPodDaemonSet(pod); ds != nil {
-		dsKey, err := controller.KeyFunc(ds)
-		if err != nil {
-			utilruntime.HandleError(fmt.Errorf("Couldn't get key for object %#v: %v", ds, err))
-			return
-		}
-		dsc.expectations.DeletionObserved(dsKey)
-		dsc.enqueueDaemonSet(ds)
-	}
+	dsc.expectations.DeletionObserved(dsKey)
+	dsc.enqueueDaemonSet(ds)
 }
 
 func (dsc *DaemonSetsController) addNode(obj interface{}) {
@@ -462,30 +453,62 @@ func (dsc *DaemonSetsController) updateNode(old, cur interface{}) {
 }
 
 // getNodesToDaemonSetPods returns a map from nodes to daemon pods (corresponding to ds) running on the nodes.
+// This also reconciles ControllerRef by adopting/orphaning.
+// Note that returned Pods are pointers to objects in the cache.
+// If you want to modify one, you need to deep-copy it first.
 func (dsc *DaemonSetsController) getNodesToDaemonPods(ds *extensions.DaemonSet) (map[string][]*v1.Pod, error) {
-	nodeToDaemonPods := make(map[string][]*v1.Pod)
 	selector, err := metav1.LabelSelectorAsSelector(ds.Spec.Selector)
 	if err != nil {
 		return nil, err
 	}
-	daemonPods, err := dsc.podLister.Pods(ds.Namespace).List(selector)
+
+	// List all pods to include those that don't match the selector anymore but
+	// have a ControllerRef pointing to this controller.
+	pods, err := dsc.podLister.Pods(ds.Namespace).List(labels.Everything())
 	if err != nil {
-		return nodeToDaemonPods, err
+		return nil, err
 	}
-	for i := range daemonPods {
-		// TODO: Do we need to copy here?
-		daemonPod := &(*daemonPods[i])
-		nodeName := daemonPod.Spec.NodeName
-		nodeToDaemonPods[nodeName] = append(nodeToDaemonPods[nodeName], daemonPod)
+	// Use ControllerRefManager to adopt/orphan as needed.
+	cm := controller.NewPodControllerRefManager(dsc.podControl, ds, selector, controllerKind)
+	claimedPods, err := cm.ClaimPods(pods)
+	if err != nil {
+		return nil, err
+	}
+	// Group Pods by Node name.
+	nodeToDaemonPods := make(map[string][]*v1.Pod)
+	for _, pod := range claimedPods {
+		nodeName := pod.Spec.NodeName
+		nodeToDaemonPods[nodeName] = append(nodeToDaemonPods[nodeName], pod)
 	}
 	return nodeToDaemonPods, nil
 }
 
+// resolveControllerRef returns the controller referenced by a ControllerRef,
+// or nil if the ControllerRef could not be resolved to a matching controller
+// of the corrrect Kind.
+func (dsc *DaemonSetsController) resolveControllerRef(namespace string, controllerRef *metav1.OwnerReference) *extensions.DaemonSet {
+	// We can't look up by UID, so look up by Name and then verify UID.
+	// Don't even try to look up by Name if it's the wrong Kind.
+	if controllerRef.Kind != controllerKind.Kind {
+		return nil
+	}
+	ds, err := dsc.dsLister.DaemonSets(namespace).Get(controllerRef.Name)
+	if err != nil {
+		return nil
+	}
+	if ds.UID != controllerRef.UID {
+		// The controller we found with this Name is not the same one that the
+		// ControllerRef points to.
+		return nil
+	}
+	return ds
+}
+
 func (dsc *DaemonSetsController) manage(ds *extensions.DaemonSet) error {
-	// Find out which nodes are running the daemon pods selected by ds.
+	// Find out which nodes are running the daemon pods controlled by ds.
 	nodeToDaemonPods, err := dsc.getNodesToDaemonPods(ds)
 	if err != nil {
-		return fmt.Errorf("error getting node to daemon pod mapping for daemon set %#v: %v", ds, err)
+		return fmt.Errorf("couldn't get node to daemon pod mapping for daemon set %q: %v", ds.Name, err)
 	}
 
 	// For each node, if the node is running the daemon pod but isn't supposed to, kill the daemon
@@ -586,7 +609,7 @@ func (dsc *DaemonSetsController) syncNodes(ds *extensions.DaemonSet, podsToDelet
 	for i := 0; i < createDiff; i++ {
 		go func(ix int) {
 			defer createWait.Done()
-			if err := dsc.podControl.CreatePodsOnNode(nodesNeedingDaemonPods[ix], ds.Namespace, &template, ds); err != nil {
+			if err := dsc.podControl.CreatePodsOnNode(nodesNeedingDaemonPods[ix], ds.Namespace, &template, ds, newControllerRef(ds)); err != nil {
 				glog.V(2).Infof("Failed creation, decrementing expectations for set %q/%q", ds.Namespace, ds.Name)
 				dsc.expectations.CreationObserved(dsKey)
 				errCh <- err
@@ -669,7 +692,7 @@ func (dsc *DaemonSetsController) updateDaemonSetStatus(ds *extensions.DaemonSet)
 	glog.V(4).Infof("Updating daemon set status")
 	nodeToDaemonPods, err := dsc.getNodesToDaemonPods(ds)
 	if err != nil {
-		return fmt.Errorf("error getting node to daemon pod mapping for daemon set %#v: %v", ds, err)
+		return fmt.Errorf("couldn't get node to daemon pod mapping for daemon set %q: %v", ds.Name, err)
 	}
 
 	nodeList, err := dsc.nodeLister.List(labels.Everything())
@@ -754,15 +777,17 @@ func (dsc *DaemonSetsController) syncDaemonSet(key string) error {
 	if err != nil {
 		return fmt.Errorf("couldn't get key for object %#v: %v", ds, err)
 	}
-	dsNeedsSync := dsc.expectations.SatisfiedExpectations(dsKey)
-	if dsNeedsSync && ds.DeletionTimestamp == nil {
-		if err := dsc.manage(ds); err != nil {
-			return err
-		}
+	if ds.DeletionTimestamp != nil || !dsc.expectations.SatisfiedExpectations(dsKey) {
+		// Only update status.
+		return dsc.updateDaemonSetStatus(ds)
 	}
 
-	dsNeedsSync = dsc.expectations.SatisfiedExpectations(dsKey)
-	if dsNeedsSync && ds.DeletionTimestamp == nil {
+	if err := dsc.manage(ds); err != nil {
+		return err
+	}
+
+	// Process rolling updates if we're ready.
+	if dsc.expectations.SatisfiedExpectations(dsKey) {
 		switch ds.Spec.UpdateStrategy.Type {
 		case extensions.RollingUpdateDaemonSetStrategyType:
 			err = dsc.rollingUpdate(ds)
@@ -857,7 +882,7 @@ func (dsc *DaemonSetsController) nodeShouldRunDaemonPod(node *v1.Node, ds *exten
 		}
 		// ignore pods that belong to the daemonset when taking into account whether
 		// a daemonset should bind to a node.
-		if pds := dsc.getPodDaemonSet(pod); pds != nil && ds.Name == pds.Name {
+		if controllerRef := controller.GetControllerOf(pod); controllerRef != nil && controllerRef.UID == ds.UID {
 			continue
 		}
 		pods = append(pods, pod)
@@ -961,6 +986,20 @@ func Predicates(pod *v1.Pod, nodeInfo *schedulercache.NodeInfo) (bool, []algorit
 	return len(predicateFails) == 0, predicateFails, nil
 }
 
+// newControllerRef creates a ControllerRef pointing to the given DaemonSet.
+func newControllerRef(ds *extensions.DaemonSet) *metav1.OwnerReference {
+	blockOwnerDeletion := true
+	isController := true
+	return &metav1.OwnerReference{
+		APIVersion:         controllerKind.GroupVersion().String(),
+		Kind:               controllerKind.Kind,
+		Name:               ds.Name,
+		UID:                ds.UID,
+		BlockOwnerDeletion: &blockOwnerDeletion,
+		Controller:         &isController,
+	}
+}
+
 // byCreationTimestamp sorts a list by creation timestamp, using their names as a tie breaker.
 type byCreationTimestamp []*extensions.DaemonSet
 
diff --git a/pkg/controller/daemon/daemoncontroller_test.go b/pkg/controller/daemon/daemoncontroller_test.go
index bb2abf7d6f2..120a6aa0de9 100644
--- a/pkg/controller/daemon/daemoncontroller_test.go
+++ b/pkg/controller/daemon/daemoncontroller_test.go
@@ -18,17 +18,22 @@ package daemon
 
 import (
 	"fmt"
+	"reflect"
+	"sort"
+	"strconv"
 	"sync"
 	"testing"
 
 	"k8s.io/apimachinery/pkg/api/resource"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/util/uuid"
 	"k8s.io/apiserver/pkg/storage/names"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 	core "k8s.io/client-go/testing"
 	"k8s.io/client-go/tools/cache"
 	"k8s.io/client-go/tools/record"
+	"k8s.io/client-go/util/workqueue"
 	"k8s.io/kubernetes/pkg/api"
 	"k8s.io/kubernetes/pkg/api/testapi"
 	"k8s.io/kubernetes/pkg/api/v1"
@@ -80,6 +85,7 @@ func newDaemonSet(name string) *extensions.DaemonSet {
 	return &extensions.DaemonSet{
 		TypeMeta: metav1.TypeMeta{APIVersion: testapi.Extensions.GroupVersion().String()},
 		ObjectMeta: metav1.ObjectMeta{
+			UID:       uuid.NewUUID(),
 			Name:      name,
 			Namespace: metav1.NamespaceDefault,
 		},
@@ -130,7 +136,7 @@ func addNodes(nodeStore cache.Store, startIndex, numNodes int, label map[string]
 	}
 }
 
-func newPod(podName string, nodeName string, label map[string]string) *v1.Pod {
+func newPod(podName string, nodeName string, label map[string]string, ds *extensions.DaemonSet) *v1.Pod {
 	pod := &v1.Pod{
 		TypeMeta: metav1.TypeMeta{APIVersion: api.Registry.GroupOrDie(v1.GroupName).GroupVersion.String()},
 		ObjectMeta: metav1.ObjectMeta{
@@ -152,18 +158,21 @@ func newPod(podName string, nodeName string, label map[string]string) *v1.Pod {
 		},
 	}
 	pod.Name = names.SimpleNameGenerator.GenerateName(podName)
+	if ds != nil {
+		pod.OwnerReferences = []metav1.OwnerReference{*newControllerRef(ds)}
+	}
 	return pod
 }
 
-func addPods(podStore cache.Store, nodeName string, label map[string]string, number int) {
+func addPods(podStore cache.Store, nodeName string, label map[string]string, ds *extensions.DaemonSet, number int) {
 	for i := 0; i < number; i++ {
-		podStore.Add(newPod(fmt.Sprintf("%s-", nodeName), nodeName, label))
+		podStore.Add(newPod(fmt.Sprintf("%s-", nodeName), nodeName, label, ds))
 	}
 }
 
-func addFailedPods(podStore cache.Store, nodeName string, label map[string]string, number int) {
+func addFailedPods(podStore cache.Store, nodeName string, label map[string]string, ds *extensions.DaemonSet, number int) {
 	for i := 0; i < number; i++ {
-		pod := newPod(fmt.Sprintf("%s-", nodeName), nodeName, label)
+		pod := newPod(fmt.Sprintf("%s-", nodeName), nodeName, label, ds)
 		pod.Status = v1.PodStatus{Phase: v1.PodFailed}
 		podStore.Add(pod)
 	}
@@ -183,10 +192,10 @@ func newFakePodControl() *fakePodControl {
 		podIDMap:       podIDMap}
 }
 
-func (f *fakePodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object) error {
+func (f *fakePodControl) CreatePodsOnNode(nodeName, namespace string, template *v1.PodTemplateSpec, object runtime.Object, controllerRef *metav1.OwnerReference) error {
 	f.Lock()
 	defer f.Unlock()
-	if err := f.FakePodControl.CreatePodsOnNode(nodeName, namespace, template, object); err != nil {
+	if err := f.FakePodControl.CreatePodsOnNode(nodeName, namespace, template, object, controllerRef); err != nil {
 		return fmt.Errorf("failed to create pod on node %q", nodeName)
 	}
 
@@ -243,7 +252,6 @@ func newTestController(initialObjects ...runtime.Object) (*daemonSetsController,
 		informerFactory.Core().V1().Pods(),
 		informerFactory.Core().V1().Nodes(),
 		clientset,
-		0,
 	)
 	manager.eventRecorder = record.NewFakeRecorder(100)
 
@@ -269,6 +277,22 @@ func validateSyncDaemonSets(t *testing.T, fakePodControl *fakePodControl, expect
 	if len(fakePodControl.DeletePodName) != expectedDeletes {
 		t.Errorf("Unexpected number of deletes.  Expected %d, saw %d\n", expectedDeletes, len(fakePodControl.DeletePodName))
 	}
+	// Every Pod created should have a ControllerRef.
+	if got, want := len(fakePodControl.ControllerRefs), expectedCreates; got != want {
+		t.Errorf("len(ControllerRefs) = %v, want %v", got, want)
+	}
+	// Make sure the ControllerRefs are correct.
+	for _, controllerRef := range fakePodControl.ControllerRefs {
+		if got, want := controllerRef.APIVersion, "extensions/v1beta1"; got != want {
+			t.Errorf("controllerRef.APIVersion = %q, want %q", got, want)
+		}
+		if got, want := controllerRef.Kind, "DaemonSet"; got != want {
+			t.Errorf("controllerRef.Kind = %q, want %q", got, want)
+		}
+		if controllerRef.Controller == nil || *controllerRef.Controller != true {
+			t.Errorf("controllerRef.Controller is not set to true")
+		}
+	}
 }
 
 func syncAndValidateDaemonSets(t *testing.T, manager *daemonSetsController, ds *extensions.DaemonSet, podControl *fakePodControl, expectedCreates, expectedDeletes int) {
@@ -322,6 +346,32 @@ func TestSimpleDaemonSetLaunchesPods(t *testing.T) {
 	syncAndValidateDaemonSets(t, manager, ds, podControl, 5, 0)
 }
 
+func TestSimpleDaemonSetUpdatesStatusAfterLaunchingPods(t *testing.T) {
+	manager, podControl, clientset := newTestController()
+
+	var updated *extensions.DaemonSet
+	clientset.PrependReactor("update", "daemonsets", func(action core.Action) (handled bool, ret runtime.Object, err error) {
+		if action.GetSubresource() != "status" {
+			return false, nil, nil
+		}
+		if u, ok := action.(core.UpdateAction); ok {
+			updated = u.GetObject().(*extensions.DaemonSet)
+		}
+		return false, nil, nil
+	})
+
+	ds := newDaemonSet("foo")
+	manager.dsStore.Add(ds)
+	addNodes(manager.nodeStore, 0, 5, nil)
+	syncAndValidateDaemonSets(t, manager, ds, podControl, 5, 0)
+
+	// Make sure the single sync() updated Status already for the change made
+	// during the manage() phase.
+	if got, want := updated.Status.CurrentNumberScheduled, int32(5); got != want {
+		t.Errorf("Status.CurrentNumberScheduled = %v, want %v", got, want)
+	}
+}
+
 // DaemonSets should do nothing if there aren't any nodes
 func TestNoNodesDoesNothing(t *testing.T) {
 	manager, podControl, _ := newTestController()
@@ -521,16 +571,17 @@ func TestPortConflictWithSameDaemonPodDoesNotDeletePod(t *testing.T) {
 	manager, podControl, _ := newTestController()
 	node := newNode("port-conflict", nil)
 	manager.nodeStore.Add(node)
-	manager.podStore.Add(&v1.Pod{
-		ObjectMeta: metav1.ObjectMeta{
-			Labels:    simpleDaemonSetLabel,
-			Namespace: metav1.NamespaceDefault,
-		},
-		Spec: podSpec,
-	})
 	ds := newDaemonSet("foo")
 	ds.Spec.Template.Spec = podSpec
 	manager.dsStore.Add(ds)
+	manager.podStore.Add(&v1.Pod{
+		ObjectMeta: metav1.ObjectMeta{
+			Labels:          simpleDaemonSetLabel,
+			Namespace:       metav1.NamespaceDefault,
+			OwnerReferences: []metav1.OwnerReference{*newControllerRef(ds)},
+		},
+		Spec: podSpec,
+	})
 	syncAndValidateDaemonSets(t, manager, ds, podControl, 0, 0)
 }
 
@@ -602,13 +653,13 @@ func TestPodIsNotDeletedByDaemonsetWithEmptyLabelSelector(t *testing.T) {
 // Controller should not create pods on nodes which have daemon pods, and should remove excess pods from nodes that have extra pods.
 func TestDealsWithExistingPods(t *testing.T) {
 	manager, podControl, _ := newTestController()
-	addNodes(manager.nodeStore, 0, 5, nil)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, 1)
-	addPods(manager.podStore, "node-2", simpleDaemonSetLabel, 2)
-	addPods(manager.podStore, "node-3", simpleDaemonSetLabel, 5)
-	addPods(manager.podStore, "node-4", simpleDaemonSetLabel2, 2)
 	ds := newDaemonSet("foo")
 	manager.dsStore.Add(ds)
+	addNodes(manager.nodeStore, 0, 5, nil)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, ds, 1)
+	addPods(manager.podStore, "node-2", simpleDaemonSetLabel, ds, 2)
+	addPods(manager.podStore, "node-3", simpleDaemonSetLabel, ds, 5)
+	addPods(manager.podStore, "node-4", simpleDaemonSetLabel2, ds, 2)
 	syncAndValidateDaemonSets(t, manager, ds, podControl, 2, 5)
 }
 
@@ -626,34 +677,34 @@ func TestSelectorDaemonLaunchesPods(t *testing.T) {
 // Daemon with node selector should delete pods from nodes that do not satisfy selector.
 func TestSelectorDaemonDeletesUnselectedPods(t *testing.T) {
 	manager, podControl, _ := newTestController()
+	ds := newDaemonSet("foo")
+	ds.Spec.Template.Spec.NodeSelector = simpleNodeLabel
+	manager.dsStore.Add(ds)
 	addNodes(manager.nodeStore, 0, 5, nil)
 	addNodes(manager.nodeStore, 5, 5, simpleNodeLabel)
-	addPods(manager.podStore, "node-0", simpleDaemonSetLabel2, 2)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, 3)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel2, 1)
-	addPods(manager.podStore, "node-4", simpleDaemonSetLabel, 1)
-	daemon := newDaemonSet("foo")
-	daemon.Spec.Template.Spec.NodeSelector = simpleNodeLabel
-	manager.dsStore.Add(daemon)
-	syncAndValidateDaemonSets(t, manager, daemon, podControl, 5, 4)
+	addPods(manager.podStore, "node-0", simpleDaemonSetLabel2, ds, 2)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, ds, 3)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel2, ds, 1)
+	addPods(manager.podStore, "node-4", simpleDaemonSetLabel, ds, 1)
+	syncAndValidateDaemonSets(t, manager, ds, podControl, 5, 4)
 }
 
 // DaemonSet with node selector should launch pods on nodes matching selector, but also deal with existing pods on nodes.
 func TestSelectorDaemonDealsWithExistingPods(t *testing.T) {
 	manager, podControl, _ := newTestController()
-	addNodes(manager.nodeStore, 0, 5, nil)
-	addNodes(manager.nodeStore, 5, 5, simpleNodeLabel)
-	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, 1)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, 3)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel2, 2)
-	addPods(manager.podStore, "node-2", simpleDaemonSetLabel, 4)
-	addPods(manager.podStore, "node-6", simpleDaemonSetLabel, 13)
-	addPods(manager.podStore, "node-7", simpleDaemonSetLabel2, 4)
-	addPods(manager.podStore, "node-9", simpleDaemonSetLabel, 1)
-	addPods(manager.podStore, "node-9", simpleDaemonSetLabel2, 1)
 	ds := newDaemonSet("foo")
 	ds.Spec.Template.Spec.NodeSelector = simpleNodeLabel
 	manager.dsStore.Add(ds)
+	addNodes(manager.nodeStore, 0, 5, nil)
+	addNodes(manager.nodeStore, 5, 5, simpleNodeLabel)
+	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, ds, 1)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, ds, 3)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel2, ds, 2)
+	addPods(manager.podStore, "node-2", simpleDaemonSetLabel, ds, 4)
+	addPods(manager.podStore, "node-6", simpleDaemonSetLabel, ds, 13)
+	addPods(manager.podStore, "node-7", simpleDaemonSetLabel2, ds, 4)
+	addPods(manager.podStore, "node-9", simpleDaemonSetLabel, ds, 1)
+	addPods(manager.podStore, "node-9", simpleDaemonSetLabel2, ds, 1)
 	syncAndValidateDaemonSets(t, manager, ds, podControl, 3, 20)
 }
 
@@ -740,7 +791,7 @@ func TestNodeAffinityDaemonLaunchesPods(t *testing.T) {
 }
 
 func TestNumberReadyStatus(t *testing.T) {
-	daemon := newDaemonSet("foo")
+	ds := newDaemonSet("foo")
 	manager, podControl, clientset := newTestController()
 	var updated *extensions.DaemonSet
 	clientset.PrependReactor("update", "daemonsets", func(action core.Action) (handled bool, ret runtime.Object, err error) {
@@ -753,31 +804,31 @@ func TestNumberReadyStatus(t *testing.T) {
 		return false, nil, nil
 	})
 	addNodes(manager.nodeStore, 0, 2, simpleNodeLabel)
-	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, 1)
-	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, 1)
-	manager.dsStore.Add(daemon)
+	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, ds, 1)
+	addPods(manager.podStore, "node-1", simpleDaemonSetLabel, ds, 1)
+	manager.dsStore.Add(ds)
 
-	syncAndValidateDaemonSets(t, manager, daemon, podControl, 0, 0)
+	syncAndValidateDaemonSets(t, manager, ds, podControl, 0, 0)
 	if updated.Status.NumberReady != 0 {
 		t.Errorf("Wrong daemon %s status: %v", updated.Name, updated.Status)
 	}
 
-	selector, _ := metav1.LabelSelectorAsSelector(daemon.Spec.Selector)
-	daemonPods, _ := manager.podLister.Pods(daemon.Namespace).List(selector)
+	selector, _ := metav1.LabelSelectorAsSelector(ds.Spec.Selector)
+	daemonPods, _ := manager.podLister.Pods(ds.Namespace).List(selector)
 	for _, pod := range daemonPods {
 		condition := v1.PodCondition{Type: v1.PodReady, Status: v1.ConditionTrue}
 		pod.Status.Conditions = append(pod.Status.Conditions, condition)
 	}
 
-	syncAndValidateDaemonSets(t, manager, daemon, podControl, 0, 0)
+	syncAndValidateDaemonSets(t, manager, ds, podControl, 0, 0)
 	if updated.Status.NumberReady != 2 {
 		t.Errorf("Wrong daemon %s status: %v", updated.Name, updated.Status)
 	}
 }
 
 func TestObservedGeneration(t *testing.T) {
-	daemon := newDaemonSet("foo")
-	daemon.Generation = 1
+	ds := newDaemonSet("foo")
+	ds.Generation = 1
 	manager, podControl, clientset := newTestController()
 	var updated *extensions.DaemonSet
 	clientset.PrependReactor("update", "daemonsets", func(action core.Action) (handled bool, ret runtime.Object, err error) {
@@ -791,12 +842,12 @@ func TestObservedGeneration(t *testing.T) {
 	})
 
 	addNodes(manager.nodeStore, 0, 1, simpleNodeLabel)
-	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, 1)
-	manager.dsStore.Add(daemon)
+	addPods(manager.podStore, "node-0", simpleDaemonSetLabel, ds, 1)
+	manager.dsStore.Add(ds)
 
-	syncAndValidateDaemonSets(t, manager, daemon, podControl, 0, 0)
-	if updated.Status.ObservedGeneration != daemon.Generation {
-		t.Errorf("Wrong ObservedGeneration for daemon %s in status. Expected %d, got %d", updated.Name, daemon.Generation, updated.Status.ObservedGeneration)
+	syncAndValidateDaemonSets(t, manager, ds, podControl, 0, 0)
+	if updated.Status.ObservedGeneration != ds.Generation {
+		t.Errorf("Wrong ObservedGeneration for daemon %s in status. Expected %d, got %d", updated.Name, ds.Generation, updated.Status.ObservedGeneration)
 	}
 }
 
@@ -816,11 +867,11 @@ func TestDaemonKillFailedPods(t *testing.T) {
 	for _, test := range tests {
 		t.Logf("test case: %s\n", test.test)
 		manager, podControl, _ := newTestController()
-		addNodes(manager.nodeStore, 0, 1, nil)
-		addFailedPods(manager.podStore, "node-0", simpleDaemonSetLabel, test.numFailedPods)
-		addPods(manager.podStore, "node-0", simpleDaemonSetLabel, test.numNormalPods)
 		ds := newDaemonSet("foo")
 		manager.dsStore.Add(ds)
+		addNodes(manager.nodeStore, 0, 1, nil)
+		addFailedPods(manager.podStore, "node-0", simpleDaemonSetLabel, ds, test.numFailedPods)
+		addPods(manager.podStore, "node-0", simpleDaemonSetLabel, ds, test.numNormalPods)
 		syncAndValidateDaemonSets(t, manager, ds, podControl, test.expectedCreates, test.expectedDeletes)
 	}
 }
@@ -1167,3 +1218,300 @@ func TestUpdateNode(t *testing.T) {
 		}
 	}
 }
+
+func TestGetNodesToDaemonPods(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds := newDaemonSet("foo")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds)
+	manager.dsStore.Add(ds2)
+	addNodes(manager.nodeStore, 0, 2, nil)
+
+	// These pods should be returned.
+	wantedPods := []*v1.Pod{
+		newPod("matching-owned-0-", "node-0", simpleDaemonSetLabel, ds),
+		newPod("matching-orphan-0-", "node-0", simpleDaemonSetLabel, nil),
+		newPod("matching-owned-1-", "node-1", simpleDaemonSetLabel, ds),
+		newPod("matching-orphan-1-", "node-1", simpleDaemonSetLabel, nil),
+	}
+	failedPod := newPod("matching-owned-failed-pod-1-", "node-1", simpleDaemonSetLabel, ds)
+	failedPod.Status = v1.PodStatus{Phase: v1.PodFailed}
+	wantedPods = append(wantedPods, failedPod)
+	for _, pod := range wantedPods {
+		manager.podStore.Add(pod)
+	}
+
+	// These pods should be ignored.
+	ignoredPods := []*v1.Pod{
+		newPod("non-matching-owned-0-", "node-0", simpleDaemonSetLabel2, ds),
+		newPod("non-matching-orphan-1-", "node-1", simpleDaemonSetLabel2, nil),
+		newPod("matching-owned-by-other-0-", "node-0", simpleDaemonSetLabel, ds2),
+	}
+	for _, pod := range ignoredPods {
+		manager.podStore.Add(pod)
+	}
+
+	nodesToDaemonPods, err := manager.getNodesToDaemonPods(ds)
+	if err != nil {
+		t.Fatalf("getNodesToDaemonPods() error: %v", err)
+	}
+	gotPods := map[string]bool{}
+	for node, pods := range nodesToDaemonPods {
+		for _, pod := range pods {
+			if pod.Spec.NodeName != node {
+				t.Errorf("pod %v grouped into %v but belongs in %v", pod.Name, node, pod.Spec.NodeName)
+			}
+			gotPods[pod.Name] = true
+		}
+	}
+	for _, pod := range wantedPods {
+		if !gotPods[pod.Name] {
+			t.Errorf("expected pod %v but didn't get it", pod.Name)
+		}
+		delete(gotPods, pod.Name)
+	}
+	for podName := range gotPods {
+		t.Errorf("unexpected pod %v was returned", podName)
+	}
+}
+
+func TestAddPod(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod1 := newPod("pod1-", "node-0", simpleDaemonSetLabel, ds1)
+	manager.addPod(pod1)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done := manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod1.Name)
+	}
+	expectedKey, _ := controller.KeyFunc(ds1)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+
+	pod2 := newPod("pod2-", "node-0", simpleDaemonSetLabel, ds2)
+	manager.addPod(pod2)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done = manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod2.Name)
+	}
+	expectedKey, _ = controller.KeyFunc(ds2)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+}
+
+func TestAddPodOrphan(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	ds3 := newDaemonSet("foo3")
+	ds3.Spec.Selector.MatchLabels = simpleDaemonSetLabel2
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+	manager.dsStore.Add(ds3)
+
+	// Make pod an orphan. Expect matching sets to be queued.
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, nil)
+	manager.addPod(pod)
+	if got, want := manager.queue.Len(), 2; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	if got, want := getQueuedKeys(manager.queue), []string{"default/foo1", "default/foo2"}; !reflect.DeepEqual(got, want) {
+		t.Errorf("getQueuedKeys() = %v, want %v", got, want)
+	}
+}
+
+func TestUpdatePod(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod1 := newPod("pod1-", "node-0", simpleDaemonSetLabel, ds1)
+	prev := *pod1
+	bumpResourceVersion(pod1)
+	manager.updatePod(&prev, pod1)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done := manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod1.Name)
+	}
+	expectedKey, _ := controller.KeyFunc(ds1)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+
+	pod2 := newPod("pod2-", "node-0", simpleDaemonSetLabel, ds2)
+	prev = *pod2
+	bumpResourceVersion(pod2)
+	manager.updatePod(&prev, pod2)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done = manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod2.Name)
+	}
+	expectedKey, _ = controller.KeyFunc(ds2)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+}
+
+func TestUpdatePodOrphanSameLabels(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, nil)
+	prev := *pod
+	bumpResourceVersion(pod)
+	manager.updatePod(&prev, pod)
+	if got, want := manager.queue.Len(), 0; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+}
+
+func TestUpdatePodOrphanWithNewLabels(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, nil)
+	prev := *pod
+	prev.Labels = map[string]string{"foo2": "bar2"}
+	bumpResourceVersion(pod)
+	manager.updatePod(&prev, pod)
+	if got, want := manager.queue.Len(), 2; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	if got, want := getQueuedKeys(manager.queue), []string{"default/foo1", "default/foo2"}; !reflect.DeepEqual(got, want) {
+		t.Errorf("getQueuedKeys() = %v, want %v", got, want)
+	}
+}
+
+func TestUpdatePodChangeControllerRef(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, ds1)
+	prev := *pod
+	prev.OwnerReferences = []metav1.OwnerReference{*newControllerRef(ds2)}
+	bumpResourceVersion(pod)
+	manager.updatePod(&prev, pod)
+	if got, want := manager.queue.Len(), 2; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+}
+
+func TestUpdatePodControllerRefRemoved(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, ds1)
+	prev := *pod
+	pod.OwnerReferences = nil
+	bumpResourceVersion(pod)
+	manager.updatePod(&prev, pod)
+	if got, want := manager.queue.Len(), 2; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+}
+
+func TestDeletePod(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+
+	pod1 := newPod("pod1-", "node-0", simpleDaemonSetLabel, ds1)
+	manager.deletePod(pod1)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done := manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod1.Name)
+	}
+	expectedKey, _ := controller.KeyFunc(ds1)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+
+	pod2 := newPod("pod2-", "node-0", simpleDaemonSetLabel, ds2)
+	manager.deletePod(pod2)
+	if got, want := manager.queue.Len(), 1; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+	key, done = manager.queue.Get()
+	if key == nil || done {
+		t.Fatalf("failed to enqueue controller for pod %v", pod2.Name)
+	}
+	expectedKey, _ = controller.KeyFunc(ds2)
+	if got, want := key.(string), expectedKey; got != want {
+		t.Errorf("queue.Get() = %v, want %v", got, want)
+	}
+}
+
+func TestDeletePodOrphan(t *testing.T) {
+	manager, _, _ := newTestController()
+	ds1 := newDaemonSet("foo1")
+	ds2 := newDaemonSet("foo2")
+	ds3 := newDaemonSet("foo3")
+	ds3.Spec.Selector.MatchLabels = simpleDaemonSetLabel2
+	manager.dsStore.Add(ds1)
+	manager.dsStore.Add(ds2)
+	manager.dsStore.Add(ds3)
+
+	pod := newPod("pod1-", "node-0", simpleDaemonSetLabel, nil)
+	manager.deletePod(pod)
+	if got, want := manager.queue.Len(), 0; got != want {
+		t.Fatalf("queue.Len() = %v, want %v", got, want)
+	}
+}
+
+func bumpResourceVersion(obj metav1.Object) {
+	ver, _ := strconv.ParseInt(obj.GetResourceVersion(), 10, 32)
+	obj.SetResourceVersion(strconv.FormatInt(ver+1, 10))
+}
+
+// getQueuedKeys returns a sorted list of keys in the queue.
+// It can be used to quickly check that multiple keys are in there.
+func getQueuedKeys(queue workqueue.RateLimitingInterface) []string {
+	var keys []string
+	count := queue.Len()
+	for i := 0; i < count; i++ {
+		key, done := queue.Get()
+		if done {
+			return keys
+		}
+		keys = append(keys, key.(string))
+	}
+	sort.Strings(keys)
+	return keys
+}
diff --git a/pkg/controller/daemon/update.go b/pkg/controller/daemon/update.go
index f13afba8330..56645b4eb14 100644
--- a/pkg/controller/daemon/update.go
+++ b/pkg/controller/daemon/update.go
@@ -32,10 +32,13 @@ import (
 // rollingUpdate deletes old daemon set pods making sure that no more than
 // ds.Spec.UpdateStrategy.RollingUpdate.MaxUnavailable pods are unavailable
 func (dsc *DaemonSetsController) rollingUpdate(ds *extensions.DaemonSet) error {
-	newPods, oldPods, err := dsc.getAllDaemonSetPods(ds)
-	allPods := append(oldPods, newPods...)
+	nodeToDaemonPods, err := dsc.getNodesToDaemonPods(ds)
+	if err != nil {
+		return fmt.Errorf("couldn't get node to daemon pod mapping for daemon set %q: %v", ds.Name, err)
+	}
 
-	maxUnavailable, numUnavailable, err := dsc.getUnavailableNumbers(ds, allPods)
+	_, oldPods, err := dsc.getAllDaemonSetPods(ds, nodeToDaemonPods)
+	maxUnavailable, numUnavailable, err := dsc.getUnavailableNumbers(ds, nodeToDaemonPods)
 	if err != nil {
 		return fmt.Errorf("Couldn't get unavailable numbers: %v", err)
 	}
@@ -67,29 +70,23 @@ func (dsc *DaemonSetsController) rollingUpdate(ds *extensions.DaemonSet) error {
 	return utilerrors.NewAggregate(errors)
 }
 
-func (dsc *DaemonSetsController) getAllDaemonSetPods(ds *extensions.DaemonSet) ([]*v1.Pod, []*v1.Pod, error) {
+func (dsc *DaemonSetsController) getAllDaemonSetPods(ds *extensions.DaemonSet, nodeToDaemonPods map[string][]*v1.Pod) ([]*v1.Pod, []*v1.Pod, error) {
 	var newPods []*v1.Pod
 	var oldPods []*v1.Pod
 
-	selector, err := metav1.LabelSelectorAsSelector(ds.Spec.Selector)
-	if err != nil {
-		return newPods, oldPods, err
-	}
-	daemonPods, err := dsc.podLister.Pods(ds.Namespace).List(selector)
-	if err != nil {
-		return newPods, oldPods, fmt.Errorf("Couldn't get list of pods for daemon set %#v: %v", ds, err)
-	}
-	for _, pod := range daemonPods {
-		if util.IsPodUpdated(ds.Spec.TemplateGeneration, pod) {
-			newPods = append(newPods, pod)
-		} else {
-			oldPods = append(oldPods, pod)
+	for _, pods := range nodeToDaemonPods {
+		for _, pod := range pods {
+			if util.IsPodUpdated(ds.Spec.TemplateGeneration, pod) {
+				newPods = append(newPods, pod)
+			} else {
+				oldPods = append(oldPods, pod)
+			}
 		}
 	}
 	return newPods, oldPods, nil
 }
 
-func (dsc *DaemonSetsController) getUnavailableNumbers(ds *extensions.DaemonSet, allPods []*v1.Pod) (int, int, error) {
+func (dsc *DaemonSetsController) getUnavailableNumbers(ds *extensions.DaemonSet, nodeToDaemonPods map[string][]*v1.Pod) (int, int, error) {
 	glog.V(4).Infof("Getting unavailable numbers")
 	// TODO: get nodeList once in syncDaemonSet and pass it to other functions
 	nodeList, err := dsc.nodeLister.List(labels.Everything())
@@ -97,11 +94,6 @@ func (dsc *DaemonSetsController) getUnavailableNumbers(ds *extensions.DaemonSet,
 		return -1, -1, fmt.Errorf("couldn't get list of nodes during rolling update of daemon set %#v: %v", ds, err)
 	}
 
-	nodeToDaemonPods, err := dsc.getNodesToDaemonPods(ds)
-	if err != nil {
-		return -1, -1, fmt.Errorf("couldn't get node to daemon pods mapping for daemon set %#v: %v", ds, err)
-	}
-
 	var numUnavailable, desiredNumberScheduled int
 	for i := range nodeList {
 		node := nodeList[i]
diff --git a/pkg/registry/extensions/daemonset/BUILD b/pkg/registry/extensions/daemonset/BUILD
index 580a1a9fa10..d523cf24486 100644
--- a/pkg/registry/extensions/daemonset/BUILD
+++ b/pkg/registry/extensions/daemonset/BUILD
@@ -25,6 +25,7 @@ go_library(
         "//vendor:k8s.io/apimachinery/pkg/util/validation/field",
         "//vendor:k8s.io/apiserver/pkg/endpoints/request",
         "//vendor:k8s.io/apiserver/pkg/registry/generic",
+        "//vendor:k8s.io/apiserver/pkg/registry/rest",
         "//vendor:k8s.io/apiserver/pkg/storage",
         "//vendor:k8s.io/apiserver/pkg/storage/names",
     ],
@@ -40,6 +41,7 @@ go_test(
         "//pkg/api/testapi:go_default_library",
         "//pkg/api/testing:go_default_library",
         "//pkg/apis/extensions:go_default_library",
+        "//vendor:k8s.io/apiserver/pkg/registry/rest",
     ],
 )
 
diff --git a/pkg/registry/extensions/daemonset/strategy.go b/pkg/registry/extensions/daemonset/strategy.go
index 6d02f60e725..2e508bdb998 100644
--- a/pkg/registry/extensions/daemonset/strategy.go
+++ b/pkg/registry/extensions/daemonset/strategy.go
@@ -26,6 +26,7 @@ import (
 	"k8s.io/apimachinery/pkg/util/validation/field"
 	genericapirequest "k8s.io/apiserver/pkg/endpoints/request"
 	"k8s.io/apiserver/pkg/registry/generic"
+	"k8s.io/apiserver/pkg/registry/rest"
 	"k8s.io/apiserver/pkg/storage"
 	"k8s.io/apiserver/pkg/storage/names"
 	"k8s.io/kubernetes/pkg/api"
@@ -42,6 +43,12 @@ type daemonSetStrategy struct {
 // Strategy is the default logic that applies when creating and updating DaemonSet objects.
 var Strategy = daemonSetStrategy{api.Scheme, names.SimpleNameGenerator}
 
+// DefaultGarbageCollectionPolicy returns Orphan because that was the default
+// behavior before the server-side garbage collection was implemented.
+func (daemonSetStrategy) DefaultGarbageCollectionPolicy() rest.GarbageCollectionPolicy {
+	return rest.OrphanDependents
+}
+
 // NamespaceScoped returns true because all DaemonSets need to be within a namespace.
 func (daemonSetStrategy) NamespaceScoped() bool {
 	return true
diff --git a/pkg/registry/extensions/daemonset/strategy_test.go b/pkg/registry/extensions/daemonset/strategy_test.go
index 306eccd307a..0590c76473a 100644
--- a/pkg/registry/extensions/daemonset/strategy_test.go
+++ b/pkg/registry/extensions/daemonset/strategy_test.go
@@ -19,6 +19,7 @@ package daemonset
 import (
 	"testing"
 
+	"k8s.io/apiserver/pkg/registry/rest"
 	_ "k8s.io/kubernetes/pkg/api"
 	"k8s.io/kubernetes/pkg/api/testapi"
 	apitesting "k8s.io/kubernetes/pkg/api/testing"
@@ -33,3 +34,12 @@ func TestSelectableFieldLabelConversions(t *testing.T) {
 		nil,
 	)
 }
+
+func TestDefaultGarbageCollectionPolicy(t *testing.T) {
+	// Make sure we correctly implement the interface.
+	// Otherwise a typo could silently change the default.
+	var gcds rest.GarbageCollectionDeleteStrategy = Strategy
+	if got, want := gcds.DefaultGarbageCollectionPolicy(), rest.OrphanDependents; got != want {
+		t.Errorf("DefaultGarbageCollectionPolicy() = %#v, want %#v", got, want)
+	}
+}
diff --git a/staging/src/k8s.io/client-go/listers/extensions/v1beta1/daemonset_expansion.go b/staging/src/k8s.io/client-go/listers/extensions/v1beta1/daemonset_expansion.go
index dc17c105cf8..019cdc40a8a 100644
--- a/staging/src/k8s.io/client-go/listers/extensions/v1beta1/daemonset_expansion.go
+++ b/staging/src/k8s.io/client-go/listers/extensions/v1beta1/daemonset_expansion.go
@@ -35,8 +35,9 @@ type DaemonSetListerExpansion interface {
 // DaemonSetNamespaeLister.
 type DaemonSetNamespaceListerExpansion interface{}
 
-// GetPodDaemonSets returns a list of daemon sets managing a pod.
-// Returns an error if and only if no matching daemon sets are found.
+// GetPodDaemonSets returns a list of DaemonSets that potentially match a pod.
+// Only the one specified in the Pod's ControllerRef will actually manage it.
+// Returns an error only if no matching DaemonSets are found.
 func (s *daemonSetLister) GetPodDaemonSets(pod *v1.Pod) ([]*v1beta1.DaemonSet, error) {
 	var selector labels.Selector
 	var daemonSet *v1beta1.DaemonSet