diff --git a/CHANGELOG.md b/CHANGELOG.md
index 026256670d..7fcf7183bd 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,7 @@
+## 0.26.1 - 2018-08-26
+## Fixed
+- Fix bug in `_validate_layout` which would not let a user set `app.layout` to be a function that returns a layout [(fixes #334)](https://github.com/plotly/dash/issues/334). [#336](https://github.com/plotly/dash/pull/336)
+
 ## 0.26.0 - 2018-08-20
 ## Added
 - Added `assets_ignore` init keyword, regex filter for the assets files. [#318](https://github.com/plotly/dash/pull/318)
diff --git a/dash/dash.py b/dash/dash.py
index 4c78af5825..0a2508b5f9 100644
--- a/dash/dash.py
+++ b/dash/dash.py
@@ -876,10 +876,12 @@ def _validate_layout(self):
                 'Make sure to set the `layout` attribute of your application '
                 'before running the server.')
 
+        to_validate = self._layout_value()
+
         layout_id = getattr(self.layout, 'id', None)
 
         component_ids = {layout_id} if layout_id else set()
-        for component in self.layout.traverse():
+        for component in to_validate.traverse():
             component_id = getattr(component, 'id', None)
             if component_id and component_id in component_ids:
                 raise exceptions.DuplicateIdError(
diff --git a/dash/version.py b/dash/version.py
index 826d20e8b6..f96e1c6bed 100644
--- a/dash/version.py
+++ b/dash/version.py
@@ -1 +1 @@
-__version__ = '0.26.0'
+__version__ = '0.26.1'
diff --git a/dev-requirements-py37.txt b/dev-requirements-py37.txt
index 0196676c3f..0f3238c436 100644
--- a/dev-requirements-py37.txt
+++ b/dev-requirements-py37.txt
@@ -1,4 +1,4 @@
-dash_core_components>=0.4.0
+dash_core_components>=0.27.2
 dash_html_components>=0.12.0rc3
 dash-flow-example==0.0.3
 dash-dangerously-set-inner-html
diff --git a/dev-requirements.txt b/dev-requirements.txt
index b9ad002072..240c7cdbaa 100644
--- a/dev-requirements.txt
+++ b/dev-requirements.txt
@@ -1,4 +1,4 @@
-dash_core_components>=0.27.1
+dash_core_components>=0.27.2
 dash_html_components>=0.12.0rc3
 dash_flow_example==0.0.3
 dash-dangerously-set-inner-html
diff --git a/tests/test_integration.py b/tests/test_integration.py
index 011b343504..1c42bce431 100644
--- a/tests/test_integration.py
+++ b/tests/test_integration.py
@@ -521,3 +521,14 @@ def test_external_files_init(self):
         # ensure ramda was loaded before the assets so they can use it.
         lo_test = self.driver.find_element_by_id('ramda-test')
         self.assertEqual('Hello World', lo_test.text)
+
+    def test_func_layout_accepted(self):
+
+        app = dash.Dash()
+
+        def create_layout():
+            return html.Div('Hello World')
+        app.layout = create_layout
+
+        self.startServer(app)
+        time.sleep(0.5)