diff --git a/kong-0.7.0-0.rockspec b/kong-0.7.0-0.rockspec
index 1cc3c6ca9aed..cc64bfe6a946 100644
--- a/kong-0.7.0-0.rockspec
+++ b/kong-0.7.0-0.rockspec
@@ -219,6 +219,9 @@ build = {
     ["kong.plugins.acl.api"] = "kong/plugins/acl/api.lua",
     ["kong.plugins.acl.daos"] = "kong/plugins/acl/daos.lua",
 
+    ["kong.plugins.correlation-id.handler"] = "kong/plugins/correlation-id/handler.lua",
+    ["kong.plugins.correlation-id.schema"] = "kong/plugins/correlation-id/schema.lua",
+
     ["kong.api.app"] = "kong/api/app.lua",
     ["kong.api.crud_helpers"] = "kong/api/crud_helpers.lua",
     ["kong.api.route_helpers"] = "kong/api/route_helpers.lua",
diff --git a/kong/constants.lua b/kong/constants.lua
index 4ff64180bd38..fbb2ff6d3712 100644
--- a/kong/constants.lua
+++ b/kong/constants.lua
@@ -14,7 +14,7 @@ return {
     NGINX_CONFIG = "nginx.conf"
   },
   PLUGINS_AVAILABLE = {
-    "ssl", "jwt", "acl", "cors", "oauth2", "tcp-log", "udp-log", "file-log",
+    "ssl", "jwt", "acl", "correlation-id", "cors", "oauth2", "tcp-log", "udp-log", "file-log",
     "http-log", "key-auth", "hmac-auth", "basic-auth", "ip-restriction",
     "mashape-analytics", "request-transformer", "response-transformer",
     "request-size-limiting", "rate-limiting", "response-ratelimiting", "syslog",
diff --git a/kong/plugins/correlation-id/handler.lua b/kong/plugins/correlation-id/handler.lua
new file mode 100644
index 000000000000..e4ac667ae893
--- /dev/null
+++ b/kong/plugins/correlation-id/handler.lua
@@ -0,0 +1,60 @@
+-- Copyright (C) Mashape, Inc.
+
+local BasePlugin = require "kong.plugins.base_plugin"
+local uuid = require "lua_uuid"
+local req_set_header = ngx.req.set_header
+local req_get_headers = ngx.req.get_headers
+
+local CorrelationIdHandler = BasePlugin:extend()
+
+local worker_uuid
+local worker_counter
+
+local generators = setmetatable({
+	["uuid"] = function()
+    return uuid()
+	end,
+	["uuid#counter"] = function()
+    worker_counter = worker_counter + 1
+    return worker_uuid.."#"..worker_counter
+	end,
+}, { __index = function(self, generator)
+    ngx.log(ngx.ERR, "Invalid generator: "..generator)
+end
+})
+
+function CorrelationIdHandler:new()
+  CorrelationIdHandler.super.new(self, "correlation-id")
+end
+
+function CorrelationIdHandler:init_worker()
+  CorrelationIdHandler.super.init_worker(self)
+  worker_uuid = uuid()
+  worker_counter = 0
+end
+
+function CorrelationIdHandler:access(conf)
+  CorrelationIdHandler.super.access(self)
+
+  -- Set header for upstream
+  local header_value = req_get_headers()[conf.header_name]
+  if not header_value then
+    -- Generate the header value
+    header_value = generators[conf.generator]()
+    req_set_header(conf.header_name, header_value)
+  end
+
+  if conf.echo_downstream then
+    -- For later use, to echo it back downstream
+    ngx.ctx.correlationid_header_value = header_value
+  end
+end
+
+function CorrelationIdHandler:header_filter(conf)
+  CorrelationIdHandler.super.header_filter(self)
+  if conf.echo_downstream then
+    ngx.header[conf.header_name] = ngx.ctx.correlationid_header_value
+  end
+end
+
+return CorrelationIdHandler
diff --git a/kong/plugins/correlation-id/schema.lua b/kong/plugins/correlation-id/schema.lua
new file mode 100644
index 000000000000..6f9782f6a753
--- /dev/null
+++ b/kong/plugins/correlation-id/schema.lua
@@ -0,0 +1,17 @@
+return {
+  fields = {
+    header_name = {
+      type = "string",
+      default = "Kong-Request-ID"
+    },
+    generator = {
+      type = "string",
+      default = "uuid#counter",
+      enum = {"uuid", "uuid#counter"}
+    },
+    echo_downstream = {
+      type = "boolean",
+      default = false
+    }
+  }
+}
diff --git a/spec/plugins/correlation-id/access_spec.lua b/spec/plugins/correlation-id/access_spec.lua
new file mode 100644
index 000000000000..906e572d9f01
--- /dev/null
+++ b/spec/plugins/correlation-id/access_spec.lua
@@ -0,0 +1,91 @@
+local spec_helper = require "spec.spec_helpers"
+local http_client = require "kong.tools.http_client"
+local json = require "cjson"
+
+local STUB_GET_URL = spec_helper.STUB_GET_URL
+local UUID_PATTERN = "%x%x%x%x%x%x%x%x%-%x%x%x%x%-%x%x%x%x%-%x%x%x%x%-%x%x%x%x%x%x%x%x%x%x%x%x"
+local UUID_COUNTER_PATTERN = UUID_PATTERN.."#%d"
+local DEFAULT_HEADER_NAME = "Kong-Request-ID"
+
+describe("Correlation ID Plugin", function()
+
+  setup(function()
+    spec_helper.prepare_db()
+    spec_helper.insert_fixtures {
+      api = {
+        {request_host = "correlation1.com", upstream_url = "http://mockbin.com"},
+        {request_host = "correlation2.com", upstream_url = "http://mockbin.com"},
+        {request_host = "correlation3.com", upstream_url = "http://mockbin.com"},
+        {request_host = "correlation4.com", upstream_url = "http://mockbin.com"}
+      },
+      plugin = {
+        {name = "correlation-id", config = {echo_downstream = true}, __api = 1},
+        {name = "correlation-id", config = {header_name = "Foo-Bar-Id", echo_downstream = true}, __api = 2},
+        {name = "correlation-id", config = {generator = "uuid", echo_downstream = true}, __api = 3},
+        {name = "correlation-id", config = {}, __api = 4},
+      }
+    }
+    spec_helper.start_kong()
+  end)
+
+  teardown(function()
+    spec_helper.stop_kong()
+  end)
+
+  local function test_with(host, header, pattern)
+    local _, status1, headers1 = http_client.get(STUB_GET_URL, nil, {host = host})
+    assert.equal(200, status1)
+    local correlation_id1 = headers1[header:lower()]
+    assert.are.matches(pattern, correlation_id1)
+
+    local _, status2, headers2 = http_client.get(STUB_GET_URL, nil, {host = host})
+    assert.equal(200, status2)
+    local correlation_id2 = headers2[header:lower()]
+    assert.are.matches(pattern, correlation_id2)
+
+    assert.are_not_equals(correlation_id1, correlation_id2)
+
+    -- TODO kong_TEST.yml's worker_processes has to be 1 for the below to work.
+    --[[
+    if pattern == UUID_COUNTER_PATTERN then
+      local uuid1 = correlation_id1:sub(0, -3)
+      local uuid2 = correlation_id2:sub(0, -3)
+      assert.equals(uuid1, uuid2)
+
+      local counter1 = correlation_id1:sub(-1)
+      local counter2 = correlation_id2:sub(-1)
+      assert.True(counter1 + 1 == counter2)
+    end
+    --]]
+  end
+
+  it("should increment the counter", function()
+    test_with("correlation1.com", DEFAULT_HEADER_NAME, UUID_COUNTER_PATTERN)
+  end)
+
+  it("should use the header in the configuration", function()
+    test_with("correlation2.com", "Foo-Bar-Id", UUID_COUNTER_PATTERN)
+  end)
+
+  it("should generate a unique UUID for every request using default header", function()
+    test_with("correlation3.com", DEFAULT_HEADER_NAME, UUID_PATTERN)
+  end)
+
+  it("should honour the existing header", function()
+    local existing_correlation_id = "foo"
+    local response, status = http_client.get(
+      STUB_GET_URL,
+      nil,
+      {host = "correlation1.com", [DEFAULT_HEADER_NAME] = existing_correlation_id})
+    assert.equal(200, status)
+    local correlation_id = json.decode(response).headers[DEFAULT_HEADER_NAME:lower()]
+    assert.equals(existing_correlation_id, correlation_id)
+  end)
+
+  it("should not echo back the correlation header", function()
+    local _, status, headers = http_client.get(STUB_GET_URL, nil, {host = "correlation4.com"})
+    assert.equal(200, status)
+    local correlation_id = headers[DEFAULT_HEADER_NAME:lower()]
+    assert.falsy(correlation_id)
+  end)
+end)