diff --git a/lib/axios.js b/lib/axios.js
index ed1f519..68621dd 100644
--- a/lib/axios.js
+++ b/lib/axios.js
@@ -32,7 +32,7 @@ axios.Axios = Axios;
 
 // Factory for creating new instances
 axios.create = function create(instanceConfig) {
-  return createInstance(utils.merge(defaults, instanceConfig));
+  return createInstance(utils.mergeConfig(axios.defaults, instanceConfig || {}));
 };
 
 // Expose Cancel & CancelToken
diff --git a/lib/core/Axios.js b/lib/core/Axios.js
index f1af3e7..766a897 100644
--- a/lib/core/Axios.js
+++ b/lib/core/Axios.js
@@ -1,6 +1,5 @@
 'use strict';
 
-var defaults = require('./../defaults');
 var utils = require('./../utils');
 var InterceptorManager = require('./InterceptorManager');
 var dispatchRequest = require('./dispatchRequest');
@@ -24,15 +23,20 @@ function Axios(instanceConfig) {
  * @param {Object} config The config specific for this request (merged with this.defaults)
  */
 Axios.prototype.request = function request(config) {
+  config = config || {};
+
   /*eslint no-param-reassign:0*/
   // Allow for axios('example/url'[, config]) a la fetch API
   if (typeof config === 'string') {
-    config = utils.merge({
-      url: arguments[0]
-    }, arguments[1]);
+    config = arguments[1] || {};
+    config.url = arguments[0];
   }
 
-  config = utils.merge(defaults, this.defaults, { method: 'get' }, config);
+  if (!config.method) {
+    config.method = 'get';
+  }
+
+  config = utils.mergeConfig(this.defaults, config);
   config.method = config.method.toLowerCase();
 
   // Hook up interceptors middleware
diff --git a/lib/utils.js b/lib/utils.js
index b3fd865..342fa1f 100644
--- a/lib/utils.js
+++ b/lib/utils.js
@@ -279,6 +279,51 @@ function extend(a, b, thisArg) {
   return a;
 }
 
+function mergeConfig(defaults, instanceConfig) {
+  var config = {};
+  forEach(['url', 'method', 'params', 'data'], function(prop) {
+    config[prop] = instanceConfig[prop];
+  });
+  forEach(['headers', 'auth', 'proxy'], function(prop) {
+    if (!isUndefined(instanceConfig[prop])) {
+      if (!isObject(instanceConfig[prop])) {
+        config[prop] = instanceConfig[prop];
+      } else {
+        config[prop] = merge(
+          defaults[prop],
+          instanceConfig[prop]
+        );
+      }
+    } else if (!isUndefined(defaults[prop])) {
+      config[prop] = JSON.parse(JSON.stringify(defaults[prop]));
+    }
+  });
+  var remainingProperties = [
+    'baseURL',
+    'transformRequest',
+    'transformResponse',
+    'paramsSerializer',
+    'timeout',
+    'withCredentials',
+    'adapter',
+    'responseType',
+    'xsrfCookieName',
+    'xsrfHeaderName',
+    'onUploadProgress',
+    'onDownloadProgress',
+    'maxContentLength',
+    'validateStatus',
+    'maxRedirects',
+    'httpAgent',
+    'httpsAgent',
+    'cancelToken'
+  ];
+  forEach(remainingProperties, function(prop) {
+    config[prop] = !isUndefined(instanceConfig[prop]) ? instanceConfig[prop] : defaults[prop];
+  });
+  return config;
+}
+
 module.exports = {
   isArray: isArray,
   isArrayBuffer: isArrayBuffer,
@@ -299,5 +344,6 @@ module.exports = {
   forEach: forEach,
   merge: merge,
   extend: extend,
-  trim: trim
+  trim: trim,
+  mergeConfig: mergeConfig
 };
diff --git a/test/specs/defaults.spec.js b/test/specs/defaults.spec.js
index de19b6a..c8ee72e 100644
--- a/test/specs/defaults.spec.js
+++ b/test/specs/defaults.spec.js
@@ -148,14 +148,14 @@ describe('defaults', function () {
     });
   });
 
-  it('should be used by custom instance if set after instance created', function (done) {
+  it('should not be used by custom instance if set after instance created', function (done) {
     var instance = axios.create();
     axios.defaults.baseURL = 'http://example.org/';
 
     instance.get('/foo');
 
     getAjaxRequest().then(function (request) {
-      expect(request.url).toBe('http://example.org/foo');
+      expect(request.url).toBe('/foo');
       done();
     });
   });
diff --git a/test/specs/options.spec.js b/test/specs/options.spec.js
index 6520b8a..762b851 100644
--- a/test/specs/options.spec.js
+++ b/test/specs/options.spec.js
@@ -81,4 +81,32 @@ describe('options', function () {
       done();
     });
   });
+
+  it('should change only the baseURL of the specified instance', function() {
+    var instance1 = axios.create();
+    var instance2 = axios.create();
+
+    instance1.defaults.baseURL = 'http://instance1.example.com/';
+
+    expect(instance2.defaults.baseURL).not.toBe('http://instance1.example.com/');
+  });
+
+  it('should change only the headers of the specified instance', function() {
+    var instance1 = axios.create();
+    var instance2 = axios.create();
+
+    instance1.defaults.headers.common.Authorization = 'faketoken';
+    instance2.defaults.headers.common.Authorization = 'differentfaketoken';
+
+    instance1.defaults.headers.common['Content-Type'] = 'application/xml';
+    instance2.defaults.headers.common['Content-Type'] = 'application/x-www-form-urlencoded';
+
+    expect(axios.defaults.headers.common.Authorization).toBe(undefined);
+    expect(instance1.defaults.headers.common.Authorization).toBe('faketoken');
+    expect(instance2.defaults.headers.common.Authorization).toBe('differentfaketoken');
+
+    expect(axios.defaults.headers.common['Content-Type']).toBe(undefined);
+    expect(instance1.defaults.headers.common['Content-Type']).toBe('application/xml');
+    expect(instance2.defaults.headers.common['Content-Type']).toBe('application/x-www-form-urlencoded');
+  });
 });