diff --git a/rxjava-core/src/main/java/rx/subjects/ReplaySubject.java b/rxjava-core/src/main/java/rx/subjects/ReplaySubject.java
index d37f7820b1..bd5f16b571 100644
--- a/rxjava-core/src/main/java/rx/subjects/ReplaySubject.java
+++ b/rxjava-core/src/main/java/rx/subjects/ReplaySubject.java
@@ -25,6 +25,7 @@
 import rx.Observer;
 import rx.functions.Action0;
 import rx.functions.Action1;
+import rx.operators.NotificationLite;
 import rx.subjects.SubjectSubscriptionManager.SubjectObserver;
 
 /**
@@ -127,7 +128,7 @@ public void onCompleted() {
 
             @Override
             public void call() {
-                state.history.complete(Notification.<T> createOnCompleted());
+                state.history.complete();
             }
         });
         if (observers != null) {
@@ -145,7 +146,7 @@ public void onError(final Throwable e) {
 
             @Override
             public void call() {
-                state.history.complete(Notification.<T> createOnError(e));
+                state.history.complete(e);
             }
         });
         if (observers != null) {
@@ -159,7 +160,7 @@ public void call() {
 
     @Override
     public void onNext(T v) {
-        if (state.history.terminalValue.get() != null) {
+        if (state.history.terminated) {
             return;
         }
         state.history.next(v);
@@ -200,12 +201,9 @@ private void replayObserver(SubjectObserver<? super T> observer) {
 
     private static <T> int replayObserverFromIndex(History<T> history, Integer l, SubjectObserver<? super T> observer) {
         while (l < history.index.get()) {
-            observer.onNext(history.list.get(l));
+            history.accept(observer, l);
             l++;
         }
-        if (history.terminalValue.get() != null) {
-            history.terminalValue.get().accept(observer);
-        }
 
         return l;
     }
@@ -217,19 +215,19 @@ private static <T> int replayObserverFromIndex(History<T> history, Integer l, Su
      * @param <T>
      */
     private static class History<T> {
+        private final NotificationLite<T> nl = NotificationLite.instance();
         private final AtomicInteger index;
-        private final ArrayList<T> list;
-        private final AtomicReference<Notification<T>> terminalValue;
+        private final ArrayList<Object> list;
+        private boolean terminated;
 
         public History(int initialCapacity) {
             index = new AtomicInteger(0);
-            list = new ArrayList<T>(initialCapacity);
-            terminalValue = new AtomicReference<Notification<T>>();
+            list = new ArrayList<Object>(initialCapacity);
         }
 
         public boolean next(T n) {
-            if (terminalValue.get() == null) {
-                list.add(n);
+            if (!terminated) {
+                list.add(nl.next(n));
                 index.getAndIncrement();
                 return true;
             } else {
@@ -237,8 +235,23 @@ public boolean next(T n) {
             }
         }
 
-        public void complete(Notification<T> n) {
-            terminalValue.set(n);
+        public void accept(Observer<? super T> o, int idx) {
+            nl.accept(o, list.get(idx));
+        }
+        
+        public void complete() {
+            if (!terminated) {
+                terminated = true;
+                list.add(nl.completed());
+                index.getAndIncrement();
+            }
+        }
+        public void complete(Throwable e) {
+            if (!terminated) {
+                terminated = true;
+                list.add(nl.error(e));
+                index.getAndIncrement();
+            }
         }
     }
 
diff --git a/rxjava-core/src/test/java/rx/subjects/ReplaySubjectConcurrencyTest.java b/rxjava-core/src/test/java/rx/subjects/ReplaySubjectConcurrencyTest.java
index ced51e9608..354701b041 100644
--- a/rxjava-core/src/test/java/rx/subjects/ReplaySubjectConcurrencyTest.java
+++ b/rxjava-core/src/test/java/rx/subjects/ReplaySubjectConcurrencyTest.java
@@ -17,9 +17,7 @@
 
 import static org.junit.Assert.assertEquals;
 
-import java.util.ArrayList;
-import java.util.Collections;
-import java.util.List;
+import java.util.*;
 import java.util.concurrent.CountDownLatch;
 import java.util.concurrent.TimeUnit;
 import java.util.concurrent.atomic.AtomicReference;
@@ -32,6 +30,8 @@
 import rx.Subscriber;
 import rx.Subscription;
 import rx.functions.Action1;
+import rx.observers.TestSubscriber;
+import rx.schedulers.Schedulers;
 import rx.subscriptions.Subscriptions;
 
 public class ReplaySubjectConcurrencyTest {
@@ -303,6 +303,21 @@ public void run() {
         }
 
     }
+    
+    /**
+     * https://github.com/Netflix/RxJava/issues/1147
+     */
+    @Test
+    public void testRaceForTerminalState() {
+        final List<Integer> expected = Arrays.asList(1);
+        for (int i = 0; i < 100000; i++) {
+            TestSubscriber<Integer> ts = new TestSubscriber<Integer>();
+            Observable.just(1).subscribeOn(Schedulers.computation()).cache().subscribe(ts);
+            ts.awaitTerminalEvent();
+            ts.assertReceivedOnNext(expected);
+            ts.assertTerminalEvent();
+        }
+    }
 
     private static class SubjectObserverThread extends Thread {