diff --git a/playbooks/inventory/dynamic_inventory.py b/playbooks/inventory/dynamic_inventory.py
index 0d81cf2b8a..67577ea9fe 100755
--- a/playbooks/inventory/dynamic_inventory.py
+++ b/playbooks/inventory/dynamic_inventory.py
@@ -826,24 +826,29 @@ def _ensure_inventory_uptodate(inventory, container_skel):
 
     :param inventory: ``dict`` Living inventory of containers and hosts
     """
-    for key, value in inventory['_meta']['hostvars'].iteritems():
-        if 'container_name' not in value:
-            value['container_name'] = key
+    host_vars = inventory['_meta']['hostvars']
+    for hostname, _vars in host_vars.items():
+        if 'container_name' not in _vars:
+            _vars['container_name'] = hostname
 
         for rh in REQUIRED_HOSTVARS:
-            if rh not in value:
-                value[rh] = None
+            if rh not in _vars:
+                _vars[rh] = None
                 if rh == 'container_networks':
-                    value[rh] = {}
+                    _vars[rh] = {}
 
-    for key, value in container_skel.iteritems():
-        item = inventory.get(key)
+    # For each of the various properties in the container skeleton,
+    # copy them into the host's properties dictionary
+    for container_type, type_vars in container_skel.items():
+        item = inventory.get(container_type)
+        # Note: this creates an implicit dependency on skel_setup which
+        # adds the hosts entries.
         hosts = item.get('hosts')
         if hosts:
             for host in hosts:
-                container = inventory['_meta']['hostvars'][host]
-                if 'properties' in value:
-                    container['properties'] = value['properties']
+                container = host_vars[host]
+                if 'properties' in type_vars:
+                    container['properties'] = type_vars['properties']
 
 
 def _parse_global_variables(user_cidr, inventory, user_defined_config):
diff --git a/tests/test_inventory.py b/tests/test_inventory.py
index 4364940793..3798284a12 100644
--- a/tests/test_inventory.py
+++ b/tests/test_inventory.py
@@ -1,6 +1,7 @@
 #!/usr/bin/env python
 
 import collections
+import copy
 import json
 import os
 from os import path
@@ -669,5 +670,63 @@ class TestMultipleRuns(unittest.TestCase):
         # this test.
         cleanup()
 
+
+class TestEnsureInventoryUptoDate(unittest.TestCase):
+    def setUp(self):
+        self.env = di.load_environment(TARGET_DIR)
+        # Copy because we manipulate the structure in each test;
+        # not copying would modify the global var in the target code
+        self.inv = copy.deepcopy(di.INVENTORY_SKEL)
+        # Since we're not running skel_setup, add necessary keys
+        self.host_vars = self.inv['_meta']['hostvars']
+
+        # The _ensure_inventory_uptodate function depends on values inserted
+        # by the skel_setup function
+        di.skel_setup(self.env, self.inv)
+
+    def test_missing_required_host_vars(self):
+        self.host_vars['host1'] = {}
+
+        di._ensure_inventory_uptodate(self.inv, self.env['container_skel'])
+
+        for required_key in di.REQUIRED_HOSTVARS:
+            self.assertIn(required_key, self.host_vars['host1'])
+
+    def test_missing_container_name(self):
+        self.host_vars['host1'] = {}
+
+        di._ensure_inventory_uptodate(self.inv, self.env['container_skel'])
+
+        self.assertIn('container_name', self.host_vars['host1'])
+        self.assertEqual(self.host_vars['host1']['container_name'], 'host1')
+
+    def test_inserting_container_networks_is_dict(self):
+        self.host_vars['host1'] = {}
+
+        di._ensure_inventory_uptodate(self.inv, self.env['container_skel'])
+
+        self.assertIsInstance(self.host_vars['host1']['container_networks'],
+                              dict)
+
+    def test_populating_inventory_info(self):
+        skel = self.env['container_skel']
+
+        di._ensure_inventory_uptodate(self.inv, skel)
+
+        for container_type, type_vars in skel.items():
+            hosts = self.inv[container_type]['hosts']
+            if hosts:
+                for host in hosts:
+                    host_var_entries = self.inv['_meta']['hostvars'][host]
+                    if 'properties' in type_vars:
+                        self.assertEqual(host_var_entries['properties'],
+                                         type_vars['properties'])
+
+    def tearDown(self):
+        self.env = None
+        self.host_vars = None
+        self.inv = None
+
+
 if __name__ == '__main__':
     unittest.main()