diff --git a/pkg/tools/etcd_tools_watch.go b/pkg/tools/etcd_tools_watch.go
index f11c3dcd2a6..738a8294c5c 100644
--- a/pkg/tools/etcd_tools_watch.go
+++ b/pkg/tools/etcd_tools_watch.go
@@ -126,7 +126,7 @@ func (w *etcdWatcher) etcdWatch(client EtcdGetSet, key string, resourceVersion u
 		if !ok {
 			return
 		}
-		resourceVersion = latest
+		resourceVersion = latest + 1
 	}
 	_, err := client.Watch(key, resourceVersion, w.list, w.etcdIncoming, w.etcdStop)
 	if err != etcd.ErrWatchStoppedByUser {
@@ -146,11 +146,11 @@ func etcdGetInitialWatchState(client EtcdGetSet, key string, recursive bool, inc
 			return
 		}
 		if index, ok := etcdErrorIndex(err); ok {
-			resourceVersion = index + 1
+			resourceVersion = index
 		}
 		return
 	}
-	resourceVersion = resp.EtcdIndex + 1
+	resourceVersion = resp.EtcdIndex
 	convertRecursiveResponse(resp.Node, resp, incoming)
 	return
 }
@@ -217,7 +217,7 @@ func (w *etcdWatcher) decodeObject(data []byte, index uint64) (interface{}, erro
 	return obj, nil
 }
 
-func (w *etcdWatcher) sendCreate(res *etcd.Response) {
+func (w *etcdWatcher) sendAdd(res *etcd.Response) {
 	if res.Node == nil {
 		glog.Errorf("unexpected nil node: %#v", res)
 		return
@@ -296,7 +296,14 @@ func (w *etcdWatcher) sendDelete(res *etcd.Response) {
 		return
 	}
 	data := []byte(res.PrevNode.Value)
-	obj, err := w.decodeObject(data, res.PrevNode.ModifiedIndex)
+	index := res.PrevNode.ModifiedIndex
+	if res.Node != nil {
+		// Note that this sends the *old* object with the etcd index for the time at
+		// which it gets deleted. This will allow users to restart the watch at the right
+		// index.
+		index = res.Node.ModifiedIndex
+	}
+	obj, err := w.decodeObject(data, index)
 	if err != nil {
 		glog.Errorf("failure to decode api object: '%v' from %#v %#v", string(data), res, res.PrevNode)
 		// TODO: expose an error through watch.Interface?
@@ -316,7 +323,7 @@ func (w *etcdWatcher) sendDelete(res *etcd.Response) {
 func (w *etcdWatcher) sendResult(res *etcd.Response) {
 	switch res.Action {
 	case "create", "get":
-		w.sendCreate(res)
+		w.sendAdd(res)
 	case "set", "compareAndSwap":
 		w.sendModify(res)
 	case "delete":
diff --git a/test/integration/etcd_tools_test.go b/test/integration/etcd_tools_test.go
index 0a4c1e497e4..1e0b4eb9cbf 100644
--- a/test/integration/etcd_tools_test.go
+++ b/test/integration/etcd_tools_test.go
@@ -125,7 +125,7 @@ func TestWatch(t *testing.T) {
 		expectedVersion = resp.Node.ModifiedIndex
 		event = <-w.ResultChan()
 		if event.Type != watch.Deleted {
-			t.Fatalf("expected deleted event", event)
+			t.Errorf("expected deleted event %#v", event)
 		}
 		pod = event.Object.(*api.Pod)
 		if pod.ResourceVersion != expectedVersion {