diff --git a/include/pybind11/functional.h b/include/pybind11/functional.h
index a99ee73..ab9e1c3 100644
--- a/include/pybind11/functional.h
+++ b/include/pybind11/functional.h
@@ -22,14 +22,15 @@
     using function_type = Return (*) (Args...);
 
 public:
-    bool load(handle src_, bool) {
-        if (src_.is_none())
+    bool load(handle src, bool) {
+        if (src.is_none())
             return true;
 
-        src_ = detail::get_function(src_);
-        if (!src_ || !PyCallable_Check(src_.ptr()))
+        if (!isinstance<function>(src))
             return false;
 
+        auto func = reinterpret_borrow<function>(src);
+
         /*
            When passing a C++ function as an argument to another C++
            function via Python, every function call would normally involve
@@ -38,8 +39,8 @@
            stateless (i.e. function pointer or lambda function without
            captured variables), in which case the roundtrip can be avoided.
          */
-        if (PyCFunction_Check(src_.ptr())) {
-            auto c = reinterpret_borrow<capsule>(PyCFunction_GET_SELF(src_.ptr()));
+        if (auto cfunc = func.cpp_function()) {
+            auto c = reinterpret_borrow<capsule>(PyCFunction_GET_SELF(cfunc.ptr()));
             auto rec = (function_record *) c;
 
             if (rec && rec->is_stateless && rec->data[1] == &typeid(function_type)) {
@@ -49,10 +50,9 @@
             }
         }
 
-        auto src = reinterpret_borrow<object>(src_);
-        value = [src](Args... args) -> Return {
+        value = [func](Args... args) -> Return {
             gil_scoped_acquire acq;
-            object retval(src(std::forward<Args>(args)...));
+            object retval(func(std::forward<Args>(args)...));
             /* Visual studio 2015 parser issue: need parentheses around this expression */
             return (retval.template cast<Return>());
         };
diff --git a/include/pybind11/pytypes.h b/include/pybind11/pytypes.h
index b7317df..26f5ae4 100644
--- a/include/pybind11/pytypes.h
+++ b/include/pybind11/pytypes.h
@@ -355,6 +355,7 @@
 #if PY_MAJOR_VERSION >= 3
         if (PyInstanceMethod_Check(value.ptr()))
             value = PyInstanceMethod_GET_FUNCTION(value.ptr());
+        else
 #endif
         if (PyMethod_Check(value.ptr()))
             value = PyMethod_GET_FUNCTION(value.ptr());
@@ -1133,10 +1134,13 @@
 class function : public object {
 public:
     PYBIND11_OBJECT_DEFAULT(function, object, PyCallable_Check)
-    bool is_cpp_function() const {
+    handle cpp_function() const {
         handle fun = detail::get_function(m_ptr);
-        return fun && PyCFunction_Check(fun.ptr());
+        if (fun && PyCFunction_Check(fun.ptr()))
+            return fun;
+        return handle();
     }
+    bool is_cpp_function() const { return (bool) cpp_function(); }
 };
 
 class buffer : public object {
diff --git a/tests/test_callbacks.cpp b/tests/test_callbacks.cpp
index f89cc1c..4111008 100644
--- a/tests/test_callbacks.cpp
+++ b/tests/test_callbacks.cpp
@@ -179,4 +179,9 @@
         f(x); // lvalue reference shouldn't move out object
         return x.valid; // must still return `true`
       });
+
+    struct CppBoundMethodTest {};
+    py::class_<CppBoundMethodTest>(m, "CppBoundMethodTest")
+        .def(py::init<>())
+        .def("triple", [](CppBoundMethodTest &, int val) { return 3 * val; });
 });
diff --git a/tests/test_callbacks.py b/tests/test_callbacks.py
index f94e7b6..a5109d0 100644
--- a/tests/test_callbacks.py
+++ b/tests/test_callbacks.py
@@ -27,6 +27,21 @@
     assert f(number=43) == 44
 
 
+def test_bound_method_callback():
+    from pybind11_tests import test_callback3, CppBoundMethodTest
+
+    # Bound Python method:
+    class MyClass:
+        def double(self, val):
+            return 2 * val
+
+    z = MyClass()
+    assert test_callback3(z.double) == "func(43) = 86"
+
+    z = CppBoundMethodTest()
+    assert test_callback3(z.triple) == "func(43) = 129"
+
+
 def test_keyword_args_and_generalized_unpacking():
     from pybind11_tests import (test_tuple_unpacking, test_dict_unpacking, test_keyword_args,
                                 test_unpacking_and_keywords1, test_unpacking_and_keywords2,