diff --git a/CHANGELOG b/CHANGELOG
index de207b3..d70cd78 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,5 +1,7 @@
 *SVN*
 
+* Simplify Class.create by establishing a prototype chain when subclassing.  Closes #9342.  [Ben Newman]
+
 * Fix Ajax.PeriodicalUpdater for compatibility with Ajax.Response.  Closes #9321.  [kampers]
 
 * Ensure that classes always have an initialize method.  [Mislav Marohnić]
diff --git a/src/base.js b/src/base.js
index 922d45c..a543dc9 100644
--- a/src/base.js
+++ b/src/base.js
@@ -1,34 +1,31 @@
 /* Based on Alex Arnell's inheritance implementation. */
 var Class = {
-  create: (function() {
-    var extending = { };
+  create: function(parent, properties) {
+    if (arguments.length == 1 && !Object.isFunction(parent))
+      properties = parent, parent = null;
     
-    return function(parent, properties) {
-      if (arguments.length == 1 && !Object.isFunction(parent))
-        properties = parent, parent = null;
+    function klass() {
+      this.initialize.apply(this, arguments);
+    }
+  
+    klass.superclass = parent;
+    klass.subclasses = [];
+  
+    if (parent) {
+      var subclass = function() { };
+      subclass.prototype = parent.prototype;
+      klass.prototype = new subclass;
+      parent.subclasses.push(klass);
+    }
+
+    if (properties) Class.extend(klass, properties);
+    if (!klass.prototype.initialize)
+      klass.prototype.initialize = Prototype.emptyFunction;
       
-      function klass() {
-        if (arguments[0] !== extending) 
-          this.initialize.apply(this, arguments);
-      }
-    
-      klass.superclass = parent;
-      klass.subclasses = [];
-    
-      if (parent) {
-        klass.prototype = new parent(extending);
-        parent.subclasses.push(klass);
-      }
+    klass.prototype.constructor = klass;
 
-      if (properties) Class.extend(klass, properties);
-      if (!klass.prototype.initialize)
-        klass.prototype.initialize = Prototype.emptyFunction;
-        
-      klass.prototype.constructor = klass;
-
-      return klass;
-    };
-  })(),
+    return klass;
+  },
   
   extend: function(destination, source) {
     var ancestor = destination.superclass && destination.superclass.prototype;
diff --git a/test/unit/base.html b/test/unit/base.html
index e1a51cb..23a524c 100644
--- a/test/unit/base.html
+++ b/test/unit/base.html
@@ -464,11 +464,18 @@
       Class.extend(Mouse, {
         sleep: function($super) {
           return $super() + " ... no, can't sleep! Gotta steal cheese!";
+        },
+        escape: function(cat) {
+          return this.say('(from a mousehole) Take that, ' + cat.name + '!');
         }
       });
       
       assertEqual('Tom: ZZZ', tom.sleep(), "added instance method not available to subclass");
       assertEqual("Jerry: ZZZ ... no, can't sleep! Gotta steal cheese!", jerry.sleep());
+      assertEqual("Jerry: (from a mousehole) Take that, Tom!", jerry.escape(tom));
+      // insure that a method has not propagated *up* the prototype chain:
+      assertUndefined(tom.escape);
+      assertUndefined(new Animal().escape);
       
       Class.extend(Animal, {
         sleep: function() {