diff --git a/lib/ansible/playbook/play.py b/lib/ansible/playbook/play.py
index 4ad9e7d930..269aaf25af 100644
--- a/lib/ansible/playbook/play.py
+++ b/lib/ansible/playbook/play.py
@@ -80,13 +80,23 @@ class Play(object):
                 include_file = tokens[0]
                 data = utils.parse_yaml_from_file(utils.path_dwim(self.playbook.basedir, include_file))
                 for y in data:
-                    t = Task(self,y)
-                    # TODO: rename this to just 'vars'
-                    t.module_vars = self.vars.copy()
-                    t.module_vars.update(task_vars)
-                    results.append(t)
+                    items = y.get('with_items',None)
+                    if items is None:
+                        items = [ '' ]
+                    for item in items:
+                        t = Task(self,y)
+                        mv = self.vars.copy()
+                        mv.update(task_vars)
+                        mv['item'] = item
+                        results.append(Task(self,y,module_vars=mv))
             elif type(x) == dict:
-                results.append(Task(self, x))
+                items = x.get('with_items', None)
+                if items is None:
+                    items = [ '' ]
+                for item in items:
+                    mv = self.vars.copy()
+                    mv['item'] = item
+                    results.append(Task(self,x,module_vars=mv))
             else:
                 raise Exception("unexpected task type")
         return results
diff --git a/lib/ansible/playbook/task.py b/lib/ansible/playbook/task.py
index a3d94c6bd7..304b8ef803 100644
--- a/lib/ansible/playbook/task.py
+++ b/lib/ansible/playbook/task.py
@@ -18,6 +18,7 @@
 #############################################
 
 from ansible import errors
+from ansible import utils
 
 class Task(object):
 
@@ -26,10 +27,13 @@ class Task(object):
         'notify', 'module_name', 'module_args', 'module_vars', 'play', 'notified_by',
     ]
 
-    def __init__(self, play, ds):
+    def __init__(self, play, ds, module_vars=None):
         ''' constructor loads from a task or handler datastructure '''
 
         # TODO: more error handling
+        # include task specific vars
+
+        self.module_vars = module_vars
 
         self.play        = play
         self.name        = ds.get('name', None)
@@ -55,8 +59,10 @@ class Task(object):
         if len(tokens) > 1:
             self.module_args = tokens[1]
 
-        # include task specific vars
-        self.module_vars = ds.get('vars', {})
+
+        self.name = utils.template(self.name, self.module_vars)
+        self.action = utils.template(self.name, self.module_vars)
+
 
         if 'first_available_file' in ds:
             self.module_vars['first_available_file'] = ds.get('first_available_file')