diff --git a/doc/api/cluster.markdown b/doc/api/cluster.markdown
index e4c2111f04..2d78654cc7 100644
--- a/doc/api/cluster.markdown
+++ b/doc/api/cluster.markdown
@@ -250,7 +250,15 @@ See [child_process event: 'exit'](child_process.html#child_process_event_exit).
 
 ## Event: 'setup'
 
-Emitted every time `.setupMaster()` is called with a `settings` argument.
+* `settings` {Object}
+
+Emitted every time `.setupMaster()` is called.
+
+The `settings` object is the `cluster.settings` object at the time
+`.setupMaster()` was called and is advisory only, since multiple calls to
+`.setupMaster()` can be made in a single tick.
+
+If accuracy is important, use `cluster.settings`.
 
 ## cluster.setupMaster([settings])
 
diff --git a/lib/cluster.js b/lib/cluster.js
index e5d3533da3..2d08d43905 100644
--- a/lib/cluster.js
+++ b/lib/cluster.js
@@ -258,8 +258,8 @@ function masterInit() {
     }
     cluster.settings = settings;
     if (initialized === true)
-      return options && process.nextTick(function() {
-        cluster.emit('setup');
+      return process.nextTick(function() {
+        cluster.emit('setup', settings);
       });
     initialized = true;
     schedulingPolicy = cluster.schedulingPolicy;  // Freeze policy.
@@ -274,7 +274,7 @@ function masterInit() {
     });
 
     process.nextTick(function() {
-      cluster.emit('setup');
+      cluster.emit('setup', settings);
     });
   };
 
diff --git a/test/simple/test-cluster-setup-master-emit.js b/test/simple/test-cluster-setup-master-emit.js
new file mode 100644
index 0000000000..ee3af2ad41
--- /dev/null
+++ b/test/simple/test-cluster-setup-master-emit.js
@@ -0,0 +1,60 @@
+// Copyright Joyent, Inc. and other Node contributors.
+//
+// Permission is hereby granted, free of charge, to any person obtaining a
+// copy of this software and associated documentation files (the
+// "Software"), to deal in the Software without restriction, including
+// without limitation the rights to use, copy, modify, merge, publish,
+// distribute, sublicense, and/or sell copies of the Software, and to permit
+// persons to whom the Software is furnished to do so, subject to the
+// following conditions:
+//
+// The above copyright notice and this permission notice shall be included
+// in all copies or substantial portions of the Software.
+//
+// THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS
+// OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
+// MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN
+// NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM,
+// DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR
+// OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE
+// USE OR OTHER DEALINGS IN THE SOFTWARE.
+
+
+var common = require('../common');
+var assert = require('assert');
+var cluster = require('cluster');
+
+assert(cluster.isMaster);
+
+var assertsRun = 0;
+
+function emitAndCatch(next) {
+  cluster.once('setup', function(settings) {
+    assert.strictEqual(settings.exec, 'new-exec');
+    console.log('ok "setup" emitted with options set');
+    assertsRun += 1;
+    setImmediate(next);
+  });
+  cluster.setupMaster({ exec: 'new-exec' });
+}
+
+function emitAndCatch2(next) {
+  cluster.once('setup', function(settings) {
+    assert('exec' in settings);
+    console.log('ok "setup" emitted without options set');
+    assertsRun += 1;
+    setImmediate(next);
+  });
+  cluster.setupMaster();
+}
+
+process.on('exit', function() {
+  assert.strictEqual(assertsRun, 2);
+  console.log('ok correct number of assertions');
+});
+
+emitAndCatch(function() {
+  emitAndCatch2(function() {
+    console.log('ok emitted and caught');
+  });
+});