diff --git a/lib/multi_db/active_record_extensions.rb b/lib/multi_db/active_record_extensions.rb
index 4cbdd39..1e0bdde 100644
--- a/lib/multi_db/active_record_extensions.rb
+++ b/lib/multi_db/active_record_extensions.rb
@@ -18,7 +18,7 @@ def reload(options = nil)
 
     module ClassMethods
       # Make sure transactions always switch to the master
-      def transaction(&block)
+      def transaction(options = {}, &block)
         if self.connection.kind_of?(ConnectionProxy)
           super
         else
@@ -51,4 +51,4 @@ def connection
       end
     end
   end
-end
\ No newline at end of file
+end
diff --git a/lib/multi_db/connection_proxy.rb b/lib/multi_db/connection_proxy.rb
index ce51434..4b4e0a2 100644
--- a/lib/multi_db/connection_proxy.rb
+++ b/lib/multi_db/connection_proxy.rb
@@ -23,7 +23,7 @@ class ConnectionProxy
     
     class << self
 
-      # defaults to RAILS_ENV if multi_db is used with Rails
+      # defaults to Rails.env if multi_db is used with Rails
       # defaults to 'development' when used outside Rails
       attr_accessor :environment
       
@@ -47,7 +47,7 @@ class << self
       # establishes the connections to the slaves.
       def setup!(scheduler = Scheduler)
         self.master_models ||= DEFAULT_MASTER_MODELS
-        self.environment   ||= (defined?(RAILS_ENV) ? RAILS_ENV : 'development')
+        self.environment   ||= (defined?(Rails) ? Rails.env : 'development')
         self.sticky_slave  ||= false
         
         master = ActiveRecord::Base
@@ -218,4 +218,4 @@ def logger
     end
 
   end
-end
\ No newline at end of file
+end
diff --git a/multi_db.gemspec b/multi_db.gemspec
index 191462a..ba9166b 100644
--- a/multi_db.gemspec
+++ b/multi_db.gemspec
@@ -1,3 +1,4 @@
+# coding: utf-8
 # -*- encoding: utf-8 -*-
 
 Gem::Specification.new do |s|
diff --git a/spec/connection_proxy_spec.rb b/spec/connection_proxy_spec.rb
index a7dfd6d..6c40bd8 100644
--- a/spec/connection_proxy_spec.rb
+++ b/spec/connection_proxy_spec.rb
@@ -5,8 +5,6 @@
 require MULTI_DB_SPEC_DIR + '/../lib/multi_db/scheduler'
 require MULTI_DB_SPEC_DIR + '/../lib/multi_db/connection_proxy'
 
-RAILS_ROOT = MULTI_DB_SPEC_DIR
-
 describe MultiDb::ConnectionProxy do
 
   before(:all) do
diff --git a/spec/spec_helper.rb b/spec/spec_helper.rb
index 0e6def1..bae44c2 100644
--- a/spec/spec_helper.rb
+++ b/spec/spec_helper.rb
@@ -2,10 +2,14 @@
 gem 'activerecord', '3.0.5'
 %w[tlattr_accessors active_record yaml erb rspec logger].each {|lib| require lib}
 
-RAILS_ENV = ENV['RAILS_ENV'] = 'test'
+module Rails
+  def self.env
+    ActiveSupport::StringInquirer.new("test")
+  end
+end
 
 MULTI_DB_SPEC_DIR = File.dirname(__FILE__)
 MULTI_DB_SPEC_CONFIG = YAML::load(File.open(MULTI_DB_SPEC_DIR + '/config/database.yml'))
 
 ActiveRecord::Base.logger = Logger.new(MULTI_DB_SPEC_DIR + "/debug.log")
-ActiveRecord::Base.configurations = MULTI_DB_SPEC_CONFIG
\ No newline at end of file
+ActiveRecord::Base.configurations = MULTI_DB_SPEC_CONFIG
diff --git a/spec/weighted_scheduler_spec.rb b/spec/weighted_scheduler_spec.rb
index aff074b..c8fdce8 100644
--- a/spec/weighted_scheduler_spec.rb
+++ b/spec/weighted_scheduler_spec.rb
@@ -6,7 +6,6 @@
 require MULTI_DB_SPEC_DIR + '/../lib/multi_db/scheduler'
 require MULTI_DB_SPEC_DIR + '/../lib/multi_db/weighted_scheduler'
 
-RAILS_ROOT = MULTI_DB_SPEC_DIR
 describe MultiDb::WeightedScheduler do
   
   before(:each) do
@@ -64,4 +63,4 @@ class FooModel < ActiveRecord::Base; end
       end
     end
   end
-end
\ No newline at end of file
+end