diff --git a/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests-context.xml b/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests-context.xml
new file mode 100755
index 00000000000..06254762fbd
--- /dev/null
+++ b/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests-context.xml
@@ -0,0 +1,56 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<beans xmlns="http://www.springframework.org/schema/beans" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
+	xmlns:context="http://www.springframework.org/schema/context"
+	xsi:schemaLocation="http://www.springframework.org/schema/beans 
+		http://www.springframework.org/schema/beans/spring-beans-3.0.xsd
+		http://www.springframework.org/schema/context
+		http://www.springframework.org/schema/context/spring-context-3.0.xsd">
+
+	<context:component-scan base-package="org.springframework.transaction.interceptor">
+		<context:include-filter type="regex" expression="org.springframework.transaction.interceptor.TestRepositoryImpl"/>
+	</context:component-scan>
+
+	<bean class="org.springframework.dao.annotation.PersistenceExceptionTranslationPostProcessor"/>
+
+	<bean class="org.springframework.aop.framework.autoproxy.BeanNameAutoProxyCreator">
+		<property name="beanNames" value="testRepository" />
+		<property name="interceptorNames" value="transactionInterceptor" />
+	</bean>
+
+	<!-- Further stuff required for setup -->
+
+	<!-- Just register one to have a PersistenceExceptionTranslator -->
+	<bean id="sessionFactory" class="org.springframework.orm.hibernate3.LocalSessionFactoryBean">
+		<property name="dataSource">
+			<bean id="dataSource" class="org.springframework.jdbc.datasource.DriverManagerDataSource">
+				<property name="driverClassName" value="org.hsqldb.jdbcDriver" />
+				<property name="url" value="jdbc:hsqldb:mem:db" />
+				<property name="username" value="sa" />
+				<property name="password" value="" />
+			</bean>
+		</property>
+		<property name="mappingLocations">
+			<list>
+			</list>
+		</property>
+		<property name="hibernateProperties">
+			<props>
+				<prop key="hibernate.dialect">org.hibernate.dialect.HSQLDialect</prop>
+				<prop key="hibernate.hbm2ddl.auto">create</prop>
+				<prop key="hibernate.show_sql">false</prop>
+			</props>
+		</property>
+	</bean>
+
+	<bean id="transactionManager" class="org.springframework.orm.hibernate3.HibernateTransactionManager">
+		<property name="sessionFactory" ref="sessionFactory" />
+	</bean>
+
+	<bean id="transactionInterceptor" class="org.springframework.transaction.interceptor.TransactionInterceptor">
+		<property name="transactionManager" ref="transactionManager" />
+		<property name="transactionAttributeSource">
+			<bean class="org.springframework.transaction.annotation.AnnotationTransactionAttributeSource" />
+		</property>
+	</bean>
+
+</beans>
diff --git a/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests.java b/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests.java
new file mode 100644
index 00000000000..0a4892ca557
--- /dev/null
+++ b/org.springframework.integration-tests/src/test/java/org/springframework/transaction/interceptor/TransactionInterceptorDoubleProxyingTests.java
@@ -0,0 +1,82 @@
+/*
+ * Copyright 2002-2010 the original author or authors.
+ * 
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ * 
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ * 
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.springframework.transaction.interceptor;
+
+
+import static org.hamcrest.CoreMatchers.equalTo;
+import static org.junit.Assert.assertThat;
+
+import org.junit.Test;
+import org.junit.runner.RunWith;
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.stereotype.Repository;
+import org.springframework.test.context.ContextConfiguration;
+import org.springframework.test.context.junit4.SpringJUnit4ClassRunner;
+import org.springframework.transaction.IllegalTransactionStateException;
+import org.springframework.transaction.annotation.Propagation;
+import org.springframework.transaction.annotation.Transactional;
+
+
+/**
+ * Tests cornering SPR-7009.
+ *
+ * @author Chris Beams
+ */
+@RunWith(SpringJUnit4ClassRunner.class)
+@ContextConfiguration
+public class TransactionInterceptorDoubleProxyingTests {
+
+	@Autowired
+	TestRepository repository;
+
+	@Test
+	public void test1() {
+		// method 1 is required, so no problem
+		assertThat(repository.method1(), equalTo("result1"));
+	}
+
+	@Test(expected = IllegalTransactionStateException.class)
+	public void test2() {
+		// method 2 is mandatory, so expect exception
+		assertThat(repository.method2(), equalTo("result2"));
+	}
+
+}
+
+
+interface TestRepository {
+
+	public String method1();
+
+	public String method2();
+
+}
+
+@Repository("testRepository")
+class TestRepositoryImpl implements TestRepository {
+
+	@Transactional
+	public String method1() {
+		return "result1";
+	}
+
+	@Transactional(propagation = Propagation.MANDATORY)
+	public String method2() {
+		return "result2";
+	}
+
+}
diff --git a/org.springframework.transaction/src/main/java/org/springframework/transaction/interceptor/TransactionInterceptor.java b/org.springframework.transaction/src/main/java/org/springframework/transaction/interceptor/TransactionInterceptor.java
index a7ef513bd63..e7665f980d7 100644
--- a/org.springframework.transaction/src/main/java/org/springframework/transaction/interceptor/TransactionInterceptor.java
+++ b/org.springframework.transaction/src/main/java/org/springframework/transaction/interceptor/TransactionInterceptor.java
@@ -25,6 +25,7 @@ import java.util.Properties;
 import org.aopalliance.intercept.MethodInterceptor;
 import org.aopalliance.intercept.MethodInvocation;
 
+import org.springframework.aop.support.AopUtils;
 import org.springframework.beans.factory.BeanFactory;
 import org.springframework.transaction.PlatformTransactionManager;
 import org.springframework.transaction.TransactionStatus;
@@ -49,6 +50,7 @@ import org.springframework.transaction.support.TransactionCallback;
  * @see org.springframework.aop.framework.ProxyFactoryBean
  * @see org.springframework.aop.framework.ProxyFactory
  */
+@SuppressWarnings("serial")
 public class TransactionInterceptor extends TransactionAspectSupport implements MethodInterceptor, Serializable {
 
 	/**
@@ -90,7 +92,7 @@ public class TransactionInterceptor extends TransactionAspectSupport implements
 		// Work out the target class: may be <code>null</code>.
 		// The TransactionAttributeSource should be passed the target class
 		// as well as the method, which may be from an interface.
-		Class targetClass = (invocation.getThis() != null ? invocation.getThis().getClass() : null);
+		Class<?> targetClass = (invocation.getThis() != null ? AopUtils.getTargetClass(invocation.getThis()) : null);
 
 		// If the transaction attribute is null, the method is non-transactional.
 		final TransactionAttribute txAttr =