diff --git a/CHANGELOG.md b/CHANGELOG.md
index 748d4c854..7a7fea872 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,7 @@ BUG FIXES:
  * Fixing issue with Session ID and ACL ID generation. Previously,
    sessions and tokens could be invalidated when the leader changed.
  * Fixing multiple headers for /v1/event/list endpoint [GH-361]
+ * Fixing graceful leave of leader causing invalid Raft peers [GH-360]
 
 ## 0.4.0 (September 5, 2014)
 
diff --git a/consul/leader.go b/consul/leader.go
index ba7280f9a..87e065068 100644
--- a/consul/leader.go
+++ b/consul/leader.go
@@ -399,22 +399,30 @@ func (s *Server) handleReapMember(member serf.Member) error {
 // handleDeregisterMember is used to deregister a member of a given reason
 func (s *Server) handleDeregisterMember(reason string, member serf.Member) error {
 	state := s.fsm.State()
-
 	// Check if the node does not exists
 	_, found, _ := state.GetNode(member.Name)
 	if !found {
 		return nil
 	}
-	s.logger.Printf("[INFO] consul: member '%s' %s, deregistering", member.Name, reason)
 
 	// Remove from Raft peers if this was a server
 	if valid, parts := isConsulServer(member); valid {
+		s.logger.Printf("[INFO] consul: server '%s' %s, removing as peer", member.Name, reason)
 		if err := s.removeConsulServer(member, parts.Port); err != nil {
 			return err
 		}
 	}
 
+	// Do not deregister ourself. This can only happen if the current leader
+	// is leaving. Instead, we should allow a follower to take-over and
+	// deregister us later.
+	if member.Name == s.config.NodeName {
+		s.logger.Printf("[WARN] consul: deregistering self (%s) should be done by follower", s.config.NodeName)
+		return nil
+	}
+
 	// Deregister the node
+	s.logger.Printf("[INFO] consul: member '%s' %s, deregistering", member.Name, reason)
 	req := structs.DeregisterRequest{
 		Datacenter: s.config.Datacenter,
 		Node:       member.Name,
@@ -454,11 +462,6 @@ func (s *Server) joinConsulServer(m serf.Member, parts *serverParts) error {
 
 // removeConsulServer is used to try to remove a consul server that has left
 func (s *Server) removeConsulServer(m serf.Member, port int) error {
-	// Do not remove ourself
-	if m.Name == s.config.NodeName {
-		return nil
-	}
-
 	// Attempt to remove as peer
 	peer := &net.TCPAddr{IP: m.Addr, Port: port}
 	future := s.raft.RemovePeer(peer)
diff --git a/consul/leader_test.go b/consul/leader_test.go
index fc1c16cdf..6cad9cd70 100644
--- a/consul/leader_test.go
+++ b/consul/leader_test.go
@@ -3,12 +3,13 @@ package consul
 import (
 	"errors"
 	"fmt"
-	"github.com/hashicorp/consul/consul/structs"
-	"github.com/hashicorp/consul/testutil"
-	"github.com/hashicorp/serf/serf"
 	"os"
 	"testing"
 	"time"
+
+	"github.com/hashicorp/consul/consul/structs"
+	"github.com/hashicorp/consul/testutil"
+	"github.com/hashicorp/serf/serf"
 )
 
 func TestLeader_RegisterMember(t *testing.T) {
@@ -328,6 +329,73 @@ func TestLeader_LeftServer(t *testing.T) {
 	}
 }
 
+func TestLeader_LeftLeader(t *testing.T) {
+	dir1, s1 := testServer(t)
+	defer os.RemoveAll(dir1)
+	defer s1.Shutdown()
+
+	dir2, s2 := testServerDCBootstrap(t, "dc1", false)
+	defer os.RemoveAll(dir2)
+	defer s2.Shutdown()
+
+	dir3, s3 := testServerDCBootstrap(t, "dc1", false)
+	defer os.RemoveAll(dir3)
+	defer s3.Shutdown()
+	servers := []*Server{s1, s2, s3}
+
+	// Try to join
+	addr := fmt.Sprintf("127.0.0.1:%d",
+		s1.config.SerfLANConfig.MemberlistConfig.BindPort)
+	if _, err := s2.JoinLAN([]string{addr}); err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if _, err := s3.JoinLAN([]string{addr}); err != nil {
+		t.Fatalf("err: %v", err)
+	}
+
+	for _, s := range servers {
+		testutil.WaitForResult(func() (bool, error) {
+			peers, _ := s.raftPeers.Peers()
+			return len(peers) == 3, nil
+		}, func(err error) {
+			t.Fatalf("should have 3 peers")
+		})
+	}
+
+	// Kill the leader!
+	var leader *Server
+	for _, s := range servers {
+		if s.IsLeader() {
+			leader = s
+			break
+		}
+	}
+	leader.Leave()
+	leader.Shutdown()
+	time.Sleep(100 * time.Millisecond)
+
+	var remain *Server
+	for _, s := range servers {
+		if s == leader {
+			continue
+		}
+		remain = s
+		testutil.WaitForResult(func() (bool, error) {
+			peers, _ := s.raftPeers.Peers()
+			return len(peers) == 2, errors.New(fmt.Sprintf("%v", peers))
+		}, func(err error) {
+			t.Fatalf("should have 2 peers: %v", err)
+		})
+	}
+
+	// Verify the old leader is deregistered
+	state := remain.fsm.State()
+	_, found, _ := state.GetNode(leader.config.NodeName)
+	if found {
+		t.Fatalf("leader should be deregistered")
+	}
+}
+
 func TestLeader_MultiBootstrap(t *testing.T) {
 	dir1, s1 := testServer(t)
 	defer os.RemoveAll(dir1)