diff --git a/include/boost/parameter/aux_/template_keyword.hpp b/include/boost/parameter/aux_/template_keyword.hpp
index 5a02f008a..ce5b943c9 100644
--- a/include/boost/parameter/aux_/template_keyword.hpp
+++ b/include/boost/parameter/aux_/template_keyword.hpp
@@ -7,8 +7,17 @@
 
 # include <boost/mpl/and.hpp>
 # include <boost/mpl/not.hpp>
+# include <boost/mpl/if.hpp>
 # include <boost/type_traits/is_convertible.hpp>
-# include <boost/type_traits/is_reference.hpp>
+# include <boost/type_traits/is_lvalue_reference.hpp>
+# include <boost/type_traits/is_function.hpp>
+# include <boost/config.hpp>
+
+# if defined(BOOST_NO_CXX11_HDR_FUNCTIONAL)
+#  include <boost/function.hpp>
+# else
+#  include <functional>
+# endif
 
 namespace boost { namespace parameter { 
 
@@ -25,7 +34,7 @@ namespace aux
   template <class T>
   struct is_template_keyword
     : mpl::and_<
-          mpl::not_<is_reference<T> >
+          mpl::not_<is_lvalue_reference<T> >
         , is_pointer_convertible<T, template_keyword_tag>
       >
   {};
@@ -37,7 +46,19 @@ struct template_keyword
   : aux::template_keyword_tag
 {
     typedef Tag key_type;
-    typedef T value_type;
+
+    // Wrap plain (non-UDT) function objects in either
+    // a boost::function or a std::function. -- Cromwell D. Enage
+    typedef typename ::boost::mpl::if_<
+        ::boost::is_function<T>
+#if defined(BOOST_NO_CXX11_HDR_FUNCTIONAL)
+      , ::boost::function<T>
+#else
+      , ::std::function<T>
+#endif
+      , T
+    >::type value_type;
+
     typedef value_type reference;
 };
 
diff --git a/test/Jamfile.v2 b/test/Jamfile.v2
index 856559ca1..96606e756 100644
--- a/test/Jamfile.v2
+++ b/test/Jamfile.v2
@@ -20,6 +20,7 @@ test-suite "parameter"
      [ run tutorial.cpp ]
      [ run singular.cpp ]
      [ run mpl.cpp ]
+     [ run function_type_tpl_param.cpp ]
      [ run preprocessor.cpp ]
      [ run preprocessor_deduced.cpp ]
      [ run efficiency.cpp : : : : : <variant>release ]
diff --git a/test/function_type_tpl_param.cpp b/test/function_type_tpl_param.cpp
new file mode 100755
index 000000000..3b51650a8
--- /dev/null
+++ b/test/function_type_tpl_param.cpp
@@ -0,0 +1,70 @@
+// Copyright Frank Mori Hess 2009.
+// Copyright Cromwell D. Enage 2017.
+// Distributed under the Boost Software License, Version 1.0.
+// (See accompanying file LICENSE_1_0.txt or copy at
+// http://www.boost.org/LICENSE_1_0.txt)
+
+#include <boost/parameter/name.hpp>
+#include <boost/parameter/parameters.hpp>
+#include <boost/parameter/value_type.hpp>
+#include <boost/parameter/config.hpp>
+#include <boost/mpl/bool.hpp>
+#include <boost/mpl/if.hpp>
+#include <boost/type_traits/is_same.hpp>
+
+#if defined(BOOST_NO_CXX11_HDR_FUNCTIONAL)
+#include <boost/function.hpp>
+#else
+#include <functional>
+#endif
+
+namespace test {
+    namespace keywords {
+
+        BOOST_PARAMETER_TEMPLATE_KEYWORD(function_type)
+    } // namespace keywords
+
+    template <typename K, typename A>
+    struct X
+      : boost::parameter::value_type<
+            typename boost::parameter::parameters<
+                boost::parameter::required<K>
+            >::BOOST_NESTED_TEMPLATE bind<
+                A
+            >::type
+          , K
+        >
+    {
+    };
+
+    template <typename T>
+    struct Y
+      : boost::mpl::if_<
+            boost::is_same<
+#if defined(BOOST_NO_CXX11_HDR_FUNCTIONAL)
+                boost::function<T>
+#else
+                std::function<T>
+#endif
+              , typename X<
+                    test::keywords::tag::function_type
+                  , test::keywords::function_type<T>
+                >::type
+            >
+          , boost::mpl::true_
+          , boost::mpl::false_
+        >::type
+    {
+    };
+} // namespace test
+
+#include <boost/mpl/assert.hpp>
+#include <boost/mpl/aux_/test.hpp>
+
+MPL_TEST_CASE()
+{
+    BOOST_MPL_ASSERT((test::Y<void()>));
+    BOOST_MPL_ASSERT_NOT((test::Y<int>));
+    BOOST_MPL_ASSERT((test::Y<double(double)>));
+}
+