diff --git a/mongoengine/base.py b/mongoengine/base.py
index 62bf80b5..83fd34ee 100644
--- a/mongoengine/base.py
+++ b/mongoengine/base.py
@@ -102,6 +102,7 @@ class DocumentMetaclass(type):
         doc_fields = {}
         class_name = [name]
         superclasses = {}
+        simple_class = True
         for base in bases:
             # Include all fields present in superclasses
             if hasattr(base, '_fields'):
@@ -110,6 +111,29 @@ class DocumentMetaclass(type):
                 # Get superclasses from superclass
                 superclasses[base._class_name] = base
                 superclasses.update(base._superclasses)
+                
+            if hasattr(base, '_meta'):
+                # Ensure that the Document class may be subclassed - 
+                # inheritance may be disabled to remove dependency on 
+                # additional fields _cls and _types
+                if base._meta.get('allow_inheritance', True) == False:
+                    raise ValueError('Document %s may not be subclassed' %
+                                     base.__name__)
+                else:
+                    simple_class = False
+
+        meta = attrs.get('_meta', attrs.get('meta', {}))
+
+        if 'allow_inheritance' not in meta:
+            meta['allow_inheritance'] = True
+
+        # Only simple classes - direct subclasses of Document - may set
+        # allow_inheritance to False
+        if not simple_class and not meta['allow_inheritance']:
+            raise ValueError('Only direct subclasses of Document may set '
+                             '"allow_inheritance" to False')
+        attrs['_meta'] = meta
+
         attrs['_class_name'] = '.'.join(reversed(class_name))
         attrs['_superclasses'] = superclasses
 
@@ -142,21 +166,12 @@ class TopLevelDocumentMetaclass(DocumentMetaclass):
 
         collection = name.lower()
         
-        simple_class = True
         id_field = None
         base_indexes = []
 
         # Subclassed documents inherit collection from superclass
         for base in bases:
             if hasattr(base, '_meta') and 'collection' in base._meta:
-                # Ensure that the Document class may be subclassed - 
-                # inheritance may be disabled to remove dependency on 
-                # additional fields _cls and _types
-                if base._meta.get('allow_inheritance', True) == False:
-                    raise ValueError('Document %s may not be subclassed' %
-                                     base.__name__)
-                else:
-                    simple_class = False
                 collection = base._meta['collection']
 
                 id_field = id_field or base._meta.get('id_field')
@@ -164,7 +179,6 @@ class TopLevelDocumentMetaclass(DocumentMetaclass):
 
         meta = {
             'collection': collection,
-            'allow_inheritance': True,
             'max_documents': None,
             'max_size': None,
             'ordering': [], # default ordering applied at runtime
@@ -174,12 +188,6 @@ class TopLevelDocumentMetaclass(DocumentMetaclass):
 
         # Apply document-defined meta options
         meta.update(attrs.get('meta', {}))
-
-        # Only simple classes - direct subclasses of Document - may set
-        # allow_inheritance to False
-        if not simple_class and not meta['allow_inheritance']:
-            raise ValueError('Only direct subclasses of Document may set '
-                             '"allow_inheritance" to False')
         attrs['_meta'] = meta
 
         # Set up collection manager, needs the class to have fields so use
@@ -337,8 +345,12 @@ class BaseDocument(object):
             if value is not None:
                 data[field.name] = field.to_mongo(value)
         # Only add _cls and _types if allow_inheritance is not False
-        if not (hasattr(self, '_meta') and
-                self._meta.get('allow_inheritance', True) == False):
+        #if not (hasattr(self, '_meta') and
+        #        self._meta.get('allow_inheritance', True) == False):
+        ah = True
+        if hasattr(self, '_meta'):
+            ah = self._meta.get('allow_inheritance', True)
+        if ah:
             data['_cls'] = self._class_name
             data['_types'] = self._superclasses.keys() + [self._class_name]
         return data
diff --git a/tests/document.py b/tests/document.py
index 0c0b220b..1b58781c 100644
--- a/tests/document.py
+++ b/tests/document.py
@@ -156,6 +156,20 @@ class DocumentTest(unittest.TestCase):
             class Employee(self.Person):
                 meta = {'allow_inheritance': False}
         self.assertRaises(ValueError, create_employee_class)
+        
+        # Test the same for embedded documents
+        class Comment(EmbeddedDocument):
+            content = StringField()
+            meta = {'allow_inheritance': False}
+
+        def create_special_comment():
+            class SpecialComment(Comment):
+                pass
+        self.assertRaises(ValueError, create_special_comment)
+
+        comment = Comment(content='test')
+        self.assertFalse('_cls' in comment.to_mongo())
+        self.assertFalse('_types' in comment.to_mongo())
 
     def test_collection_name(self):
         """Ensure that a collection with a specified name may be used.
@@ -391,7 +405,7 @@ class DocumentTest(unittest.TestCase):
         
         self.assertTrue('content' in Comment._fields)
         self.assertFalse('id' in Comment._fields)
-        self.assertFalse(hasattr(Comment, '_meta'))
+        self.assertFalse('collection' in Comment._meta)
     
     def test_embedded_document_validation(self):
         """Ensure that embedded documents may be validated.