diff --git a/src/ng/filter/filter.js b/src/ng/filter/filter.js
index a739a1ca21c7..47c17b9df7b0 100644
--- a/src/ng/filter/filter.js
+++ b/src/ng/filter/filter.js
@@ -14,19 +14,26 @@
  *
  *   Can be one of:
  *
- *   - `string`: The string is evaluated as an expression and the resulting value is used for substring match against
- *     the contents of the `array`. All strings or objects with string properties in `array` that contain this string
- *     will be returned. The predicate can be negated by prefixing the string with `!`.
+ *   - `string`: The string is used for matching against the contents of the `array`. All strings or
+ *     objects with string properties in `array` that match this string will be returned. This also
+ *     applies to nested object properties.
+ *     The predicate can be negated by prefixing the string with `!`.
  *
  *   - `Object`: A pattern object can be used to filter specific properties on objects contained
  *     by `array`. For example `{name:"M", phone:"1"}` predicate will return an array of items
  *     which have property `name` containing "M" and property `phone` containing "1". A special
  *     property name `$` can be used (as in `{$:"text"}`) to accept a match against any
- *     property of the object. That's equivalent to the simple substring match with a `string`
- *     as described above. The predicate can be negated by prefixing the string with `!`.
- *     For Example `{name: "!M"}` predicate will return an array of items which have property `name`
+ *     property of the object or its nested object properties. That's equivalent to the simple
+ *     substring match with a `string` as described above. The predicate can be negated by prefixing
+ *     the string with `!`.
+ *     For example `{name: "!M"}` predicate will return an array of items which have property `name`
  *     not containing "M".
  *
+ *     Note that a named property will match properties on the same level only, while the special
+ *     `$` property will match properties on the same level or deeper. E.g. an array item like
+ *     `{name: {first: 'John', last: 'Doe'}}` will **not** be matched by `{name: 'John'}`, but
+ *     **will** be matched by `{$: 'John'}`.
+ *
  *   - `function(value, index)`: A predicate function can be used to write arbitrary filters. The
  *     function is called for each element of `array`. The final result is an array of those
  *     elements that the predicate returned true for.
@@ -39,10 +46,10 @@
  *
  *   - `function(actual, expected)`:
  *     The function will be given the object value and the predicate value to compare and
- *     should return true if the item should be included in filtered result.
+ *     should return true if both values should be considered equal.
  *
- *   - `true`: A shorthand for `function(actual, expected) { return angular.equals(expected, actual)}`.
- *     this is essentially strict comparison of expected and actual.
+ *   - `true`: A shorthand for `function(actual, expected) { return angular.equals(actual, expected)}`.
+ *     This is essentially strict comparison of expected and actual.
  *
  *   - `false|undefined`: A short hand for a function which will look for a substring match in case
  *     insensitive way.
@@ -169,7 +176,7 @@ function createPredicateFn(expression, comparator, matchAgainstAnyProp) {
   return predicateFn;
 }
 
-function deepCompare(actual, expected, comparator, matchAgainstAnyProp) {
+function deepCompare(actual, expected, comparator, matchAgainstAnyProp, dontMatchWholeObject) {
   var actualType = typeof actual;
   var expectedType = typeof expected;
 
@@ -188,11 +195,11 @@ function deepCompare(actual, expected, comparator, matchAgainstAnyProp) {
       var key;
       if (matchAgainstAnyProp) {
         for (key in actual) {
-          if ((key.charAt(0) !== '$') && deepCompare(actual[key], expected, comparator)) {
+          if ((key.charAt(0) !== '$') && deepCompare(actual[key], expected, comparator, true)) {
             return true;
           }
         }
-        return false;
+        return dontMatchWholeObject ? false : deepCompare(actual, expected, comparator, false);
       } else if (expectedType === 'object') {
         for (key in expected) {
           var expectedVal = expected[key];
@@ -200,9 +207,9 @@ function deepCompare(actual, expected, comparator, matchAgainstAnyProp) {
             continue;
           }
 
-          var keyIsDollar = key === '$';
-          var actualVal = keyIsDollar ? actual : actual[key];
-          if (!deepCompare(actualVal, expectedVal, comparator, keyIsDollar)) {
+          var matchAnyProperty = key === '$';
+          var actualVal = matchAnyProperty ? actual : actual[key];
+          if (!deepCompare(actualVal, expectedVal, comparator, matchAnyProperty, matchAnyProperty)) {
             return false;
           }
         }
diff --git a/test/ng/filter/filterSpec.js b/test/ng/filter/filterSpec.js
index 7e14f5f567f4..7ec3bcd1205b 100644
--- a/test/ng/filter/filterSpec.js
+++ b/test/ng/filter/filterSpec.js
@@ -136,14 +136,30 @@ describe('Filter: filter', function() {
   });
 
 
-  it('should respect the depth level of a "$" property', function() {
-    var items = [{person: {name: 'Annet', email: 'annet@example.com'}},
-                 {person: {name: 'Billy', email: 'me@billy.com'}},
-                 {person: {name: 'Joan', email: {home: 'me@joan.com', work: 'joan@example.net'}}}];
-    var expr = {person: {$: 'net'}};
+  it('should match named properties only against named properties on the same level', function() {
+    var expr = {person: {name: 'John'}};
+    var items = [{person: 'John'},                                  // No match (1 level higher)
+                 {person: {name: 'John'}},                          // Match (same level)
+                 {person: {name: {first: 'John', last: 'Doe'}}}];   // No match (1 level deeper)
 
     expect(filter(items, expr).length).toBe(1);
-    expect(filter(items, expr)).toEqual([items[0]]);
+    expect(filter(items, expr)).toEqual([items[1]]);
+  });
+
+
+  it('should match any properties on same or deeper level for given "$" property', function() {
+    var items = [{level1: 'test', foo1: 'bar1'},
+                 {level1: {level2: 'test', foo2:'bar2'}, foo1: 'bar1'},
+                 {level1: {level2: {level3: 'test', foo3: 'bar3'}, foo2: 'bar2'}, foo1: 'bar1'}];
+
+    expect(filter(items, {$: 'ES'}).length).toBe(3);
+    expect(filter(items, {$: 'ES'})).toEqual([items[0], items[1], items[2]]);
+
+    expect(filter(items, {level1: {$: 'ES'}}).length).toBe(2);
+    expect(filter(items, {level1: {$: 'ES'}})).toEqual([items[1], items[2]]);
+
+    expect(filter(items, {level1: {level2: {$: 'ES'}}}).length).toBe(1);
+    expect(filter(items, {level1: {level2: {$: 'ES'}}})).toEqual([items[2]]);
   });