diff --git a/CHANGELOG.markdown b/CHANGELOG.markdown
index 43a447e33d..96a209d9da 100644
--- a/CHANGELOG.markdown
+++ b/CHANGELOG.markdown
@@ -2,6 +2,7 @@
 ====================
 
 * [#265](https://github.com/intridea/grape/issues/264): Fix: The class ValidationError should be in the module "Grape::Exceptions". Fixes [#264](https://github.com/intridea/grape/issues/264) - [@thepumpkin1979](https://github.com/thepumpkin1979).
+* [#269](https://github.com/intridea/grape/pull/269): Fix: LocalJumpError will not be raised when using explict return in API methods - [@simulacre](https://github.com/simulacre)
 * Your contribution here.
 
 0.2.2
diff --git a/lib/grape/endpoint.rb b/lib/grape/endpoint.rb
index 7c7d4cc32c..d2e16f8d2f 100644
--- a/lib/grape/endpoint.rb
+++ b/lib/grape/endpoint.rb
@@ -11,9 +11,37 @@ class Endpoint
     attr_accessor :block, :options, :settings
     attr_reader :env, :request
 
+    class << self
+      # @api private
+      #
+      # Create an UnboundMethod that is appropriate for executing an endpoint
+      # route.
+      #
+      # The unbound method allows explicit calls to +return+ without raising a
+      # +LocalJumpError+. The method will be removed, but a +Proc+ reference to
+      # it will be returned. The returned +Proc+ expects a single argument: the
+      # instance of +Endpoint+ to bind to the method during the call.
+      #
+      # @param [String, Symbol] method_name
+      # @return [Proc]
+      # @raise [NameError] an instance method with the same name already exists
+      def generate_api_method(method_name, &block)
+        if instance_methods.include?(method_name.to_sym) || instance_methods.include?(method_name.to_s)
+          raise NameError.new("method #{method_name.inspect} already exists and cannot be used as an unbound method name")
+        end
+        define_method(method_name, &block)
+        method = instance_method(method_name)
+        remove_method(method_name)
+        proc { |endpoint_instance| method.bind(endpoint_instance).call }
+      end
+    end
+
     def initialize(settings, options = {}, &block)
       @settings = settings
-      @block = block
+      if block_given?
+        method_name = "#{options[:method]} #{settings.gather(:namespace).join( "/")} #{Array(options[:path]).join("/")}"
+        @block = self.class.generate_api_method(method_name, &block)
+      end
       @options = options
 
       raise ArgumentError, "Must specify :path option." unless options.key?(:path)
@@ -135,7 +163,7 @@ def declared(params, options = {})
       unless settings[:declared_params]
         raise ArgumentError, "Tried to filter for declared parameters but none exist."
       end
-      
+
       settings[:declared_params].inject({}){|h,k|
         output_key = options[:stringify] ? k.to_s : k.to_sym
         if params.key?(output_key) || options[:include_missing]
@@ -324,7 +352,7 @@ def run(env)
 
       run_filters after_validations
 
-      response_text = instance_eval &self.block
+      response_text = @block.call(self)
       run_filters afters
       cookies.write(header)
 
diff --git a/spec/grape/endpoint_spec.rb b/spec/grape/endpoint_spec.rb
index 162e3ba36a..4c887062f2 100644
--- a/spec/grape/endpoint_spec.rb
+++ b/spec/grape/endpoint_spec.rb
@@ -293,7 +293,7 @@ def app; subject end
       last_response.body.should == '{"dude":"rad"}'
     end
   end
-  
+
   describe "#redirect" do
     it "should redirect to a url with status 302" do
       subject.get('/hey') do
@@ -354,6 +354,32 @@ def memoized
     last_response.body.should == 'yo'
   end
 
+  it 'should allow explicit return calls' do
+    subject.get('/home') do
+      return "Hello"
+    end
+
+    get '/home'
+    last_response.status.should == 200
+    last_response.body.should == "Hello"
+  end
+
+  describe ".generate_api_method" do
+    it "should raise NameError if the method name is already in use" do
+      expect {
+        Grape::Endpoint.generate_api_method("version", &proc{})
+      }.to raise_error(NameError)
+    end
+    it "should raise ArgumentError if a block is not given" do
+      expect {
+        Grape::Endpoint.generate_api_method("GET without a block method")
+      }.to raise_error(ArgumentError)
+    end
+    it "should return a Proc" do
+      Grape::Endpoint.generate_api_method("GET test for a proc", &proc{}).should be_a Proc
+    end
+  end
+
   describe '#present' do
     it 'should just set the object as the body if no options are provided' do
       subject.get '/example' do