diff --git a/core/dbt/context/runtime.py b/core/dbt/context/runtime.py
index 58072c241a2..22e5dd8f087 100644
--- a/core/dbt/context/runtime.py
+++ b/core/dbt/context/runtime.py
@@ -1,4 +1,4 @@
-from dbt.utils import get_materialization, add_ephemeral_model_prefix
+from dbt.utils import get_materialization, get_ephemeral_type, add_ephemeral_model_prefix
 
 import dbt.clients.jinja
 import dbt.context.common
@@ -35,6 +35,10 @@ def resolve(self, args):
         return target_model, name
 
     def create_ephemeral_relation(self, target_model, name):
+        is_subquery = (get_ephemeral_type(target_model) == 'subquery')
+        if is_subquery:
+            return '(\n{}\n)'.format(target_model.compiled_sql)
+
         self.model.set_cte(target_model.unique_id, None)
         return self.Relation.create(
             type=self.Relation.CTE,
diff --git a/core/dbt/parser/source_config.py b/core/dbt/parser/source_config.py
index 070e6b7ff4e..ca36c79f7c9 100644
--- a/core/dbt/parser/source_config.py
+++ b/core/dbt/parser/source_config.py
@@ -16,7 +16,7 @@ class SourceConfig(object):
         'unique_key',
         'database',
         'severity',
-
+        'ephemeral_type',
         'incremental_strategy'
     }
 
diff --git a/core/dbt/utils.py b/core/dbt/utils.py
index b194f0aa5db..2a5f03c255f 100644
--- a/core/dbt/utils.py
+++ b/core/dbt/utils.py
@@ -292,6 +292,10 @@ def get_materialization(node):
     return node.get('config', {}).get('materialized')
 
 
+def get_ephemeral_type(node):
+    return node.get('config', {}).get('ephemeral_type')
+
+
 def is_enabled(node):
     return node.get('config', {}).get('enabled') is True