diff --git a/config/initializers/connection_specification.rb b/config/initializers/connection_specification.rb
index ff172a7e5ea..66d93769741 100644
--- a/config/initializers/connection_specification.rb
+++ b/config/initializers/connection_specification.rb
@@ -13,7 +13,13 @@ ActiveRecord::Base::ConnectionSpecification.class_eval do
     if self.class.environment && @config.has_key?(self.class.environment)
       @current_config.merge!(@config[self.class.environment].symbolize_keys)
     end
+
+    @current_config.keys.each do |key|
+      next unless @current_config[key].is_a?(String)
+      @current_config[key] = I18n.interpolate_hash(@current_config[key], @current_config)
+    end
     @current_config[:username] = @current_config[:username].gsub('{schema}', @current_config[:schema_search_path]) if @current_config[:username] && @current_config[:schema_search_path]
+
     if self.class.explicit_user
       @current_config[:username] = self.class.explicit_user
       @current_config.delete(:password)
diff --git a/spec/lib/connection_specification_with_environment_spec.rb b/spec/lib/connection_specification_with_environment_spec.rb
index 93df31a3e43..8ab979b3e9e 100644
--- a/spec/lib/connection_specification_with_environment_spec.rb
+++ b/spec/lib/connection_specification_with_environment_spec.rb
@@ -48,11 +48,11 @@ describe ActiveRecord::Base::ConnectionSpecification do
     spec.config[:database].should == 'master'
   end
 
-  it "should allow using {schema} as an insertion into the username" do
+  it "should allow using hash insertions" do
     conf = {
         :adapter => 'postgresql',
         :database => 'master',
-        :username => '{schema}',
+        :username => '%{schema_search_path}',
         :schema_search_path => 'canvas',
         :deploy => {
             :username => 'deploy'
@@ -70,7 +70,7 @@ describe ActiveRecord::Base::ConnectionSpecification do
     conf = {
         :adapter => 'postgresql',
         :database => 'master',
-        :username => '{schema}',
+        :username => '%{schema_search_path}',
         :schema_search_path => 'canvas',
         :deploy => {
             :username => 'deploy'