diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1085b58f2ee..8cca81d89b8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,7 @@ Ansible Changes By Release
 
 * If the user is not using paramiko or vault, allow Ansible to run if pycrypto is not installed.
 * Fixed a bug in pkg_util module that caused "update_catalog must be one of" error if 'update_catalog' arg was used.
+* Fixed a bug where psuedo-connection vars (eg, ansible_winrm_transport) defined in group_vars or host_vars were not getting passed to the connection.
 
 ## 2.1 "The Song Remains the Same" - ACTIVE DEVELOPMENT
 
diff --git a/lib/ansible/executor/task_executor.py b/lib/ansible/executor/task_executor.py
index f35ba897f18..db8ab9b7fa1 100644
--- a/lib/ansible/executor/task_executor.py
+++ b/lib/ansible/executor/task_executor.py
@@ -409,7 +409,7 @@ class TaskExecutor:
         # get the connection and the handler for this execution
         if not self._connection or not getattr(self._connection, 'connected', False) or self._play_context.remote_addr != self._connection._play_context.remote_addr:
             self._connection = self._get_connection(variables=variables, templar=templar)
-            self._connection.set_host_overrides(host=self._host)
+            self._connection.set_host_overrides(host=self._host, hostvars=variables.get('hostvars', {}).get(self._host.name, {}))
         else:
             # if connection is reused, its _play_context is no longer valid and needs
             # to be replaced with the one templated above, in case other data changed
diff --git a/lib/ansible/plugins/connection/__init__.py b/lib/ansible/plugins/connection/__init__.py
index e1b9e959d0e..064637715a0 100644
--- a/lib/ansible/plugins/connection/__init__.py
+++ b/lib/ansible/plugins/connection/__init__.py
@@ -112,7 +112,7 @@ class ConnectionBase(with_metaclass(ABCMeta, object)):
 
         raise AnsibleError("Internal Error: this connection module does not support running commands via %s" % self._play_context.become_method)
 
-    def set_host_overrides(self, host):
+    def set_host_overrides(self, host, hostvars=None):
         '''
         An optional method, which can be used to set connection plugin parameters
         from variables set on the host (or groups to which the host belongs)
diff --git a/lib/ansible/plugins/connection/winrm.py b/lib/ansible/plugins/connection/winrm.py
index f5023d7efc6..3e022a478fc 100644
--- a/lib/ansible/plugins/connection/winrm.py
+++ b/lib/ansible/plugins/connection/winrm.py
@@ -78,16 +78,14 @@ class Connection(ConnectionBase):
 
         super(Connection, self).__init__(*args, **kwargs)
 
-    def set_host_overrides(self, host):
+    def set_host_overrides(self, host, hostvars=None):
         '''
         Override WinRM-specific options from host variables.
         '''
-        host_vars = combine_vars(host.get_group_vars(), host.get_vars())
-
         self._winrm_host = self._play_context.remote_addr
         self._winrm_port = int(self._play_context.port or 5986)
-        self._winrm_scheme = host_vars.get('ansible_winrm_scheme', 'http' if self._winrm_port == 5985 else 'https')
-        self._winrm_path = host_vars.get('ansible_winrm_path', '/wsman')
+        self._winrm_scheme = hostvars.get('ansible_winrm_scheme', 'http' if self._winrm_port == 5985 else 'https')
+        self._winrm_path = hostvars.get('ansible_winrm_path', '/wsman')
         self._winrm_user = self._play_context.remote_user
         self._winrm_pass = self._play_context.password
 
@@ -104,7 +102,7 @@ class Connection(ConnectionBase):
             self._winrm_transport = 'kerberos,%s' % transport_selector
         else:
             self._winrm_transport = transport_selector
-        self._winrm_transport = host_vars.get('ansible_winrm_transport', self._winrm_transport)
+        self._winrm_transport = hostvars.get('ansible_winrm_transport', self._winrm_transport)
         if isinstance(self._winrm_transport, basestring):
             self._winrm_transport = [x.strip() for x in self._winrm_transport.split(',') if x.strip()]
 
@@ -116,7 +114,7 @@ class Connection(ConnectionBase):
         self._winrm_kwargs = dict(username=self._winrm_user, password=self._winrm_pass)
         argspec = inspect.getargspec(Protocol.__init__)
         supported_winrm_args = set(argspec.args)
-        passed_winrm_args = set([v.replace('ansible_winrm_', '') for v in host_vars if v.startswith('ansible_winrm_')])
+        passed_winrm_args = set([v.replace('ansible_winrm_', '') for v in hostvars if v.startswith('ansible_winrm_')])
         unsupported_args = passed_winrm_args.difference(supported_winrm_args)
 
         # warn for kwargs unsupported by the installed version of pywinrm
@@ -128,7 +126,7 @@ class Connection(ConnectionBase):
 
         # pass through matching kwargs, excluding the list we want to treat specially
         for arg in passed_winrm_args.difference(internal_kwarg_mask).intersection(supported_winrm_args):
-            self._winrm_kwargs[arg] = host_vars['ansible_winrm_%s' % arg]
+            self._winrm_kwargs[arg] = hostvars['ansible_winrm_%s' % arg]
 
     def _winrm_connect(self):
         '''