diff --git a/gcloud/datastore/key.py b/gcloud/datastore/key.py
index 471d6dadacda..adbb93b9aeed 100644
--- a/gcloud/datastore/key.py
+++ b/gcloud/datastore/key.py
@@ -68,8 +68,11 @@ def from_protobuf(cls, pb, dataset=None):
 
     if not dataset:
       dataset = Dataset(id=pb.partition_id.dataset_id)
+      namespace = pb.partition_id.namespace
+    else:
+      namespace = None
 
-    return cls(path=path, dataset=dataset)
+    return cls(dataset, namespace, path)
 
   def to_protobuf(self):
     """Return a protobuf corresponding to the key.
diff --git a/gcloud/datastore/test_key.py b/gcloud/datastore/test_key.py
index 5da0f8af19cf..8f16f0a6573d 100644
--- a/gcloud/datastore/test_key.py
+++ b/gcloud/datastore/test_key.py
@@ -80,12 +80,20 @@ def test_from_protobuf_w_dataset_in_pb(self):
         key = self._getTargetClass().from_protobuf(pb)
         self.assertEqual(key.dataset().id(), _DATASET)
 
-    def test_from_protobuf_w_namespace_in_pb(self):
+    def test_from_protobuf_w_namespace_in_pb_wo_dataset_passed(self):
         _NAMESPACE = 'NAMESPACE'
         pb = self._makePB(namespace=_NAMESPACE)
         key = self._getTargetClass().from_protobuf(pb)
-        # See: https://github.com/GoogleCloudPlatform/gcloud-python/issues/133
-        # self.assertEqual(key.namespace(), _NAMESPACE)  XXX
+        self.assertEqual(key.namespace(), _NAMESPACE)
+
+    def test_from_protobuf_w_namespace_in_pb_w_dataset_passed(self):
+        from gcloud.datastore.dataset import Dataset
+        _DATASET = 'DATASET'
+        _NAMESPACE = 'NAMESPACE'
+        dataset = Dataset(_DATASET)
+        pb = self._makePB(namespace=_NAMESPACE)
+        key = self._getTargetClass().from_protobuf(pb, dataset)
+        self.assertEqual(key.namespace(), None)
 
     def test_from_protobuf_w_path_in_pb(self):
         _DATASET = 'DATASET'