diff --git a/lib/application.js b/lib/application.js
index 271c4bae..9e369fc5 100644
--- a/lib/application.js
+++ b/lib/application.js
@@ -3,7 +3,7 @@
  */
 
 var DataSource = require('loopback-datasource-juggler').DataSource
-  , ModelBuilder = require('loopback-datasource-juggler').ModelBuilder
+  , loopback = require('../')
   , compat = require('./compat')
   , assert = require('assert')
   , fs = require('fs')
@@ -82,43 +82,69 @@ app.disuse = function (route) {
 }
 
 /**
- * Define and attach a model to the app. The `Model` will be available on the
+ * Attach a model to the app. The `Model` will be available on the
  * `app.models` object.
  *
  * ```js
- * var Widget = app.model('Widget', {dataSource: 'db'});
- * Widget.create({name: 'pencil'});
- * app.models.Widget.find(function(err, widgets) {
- *   console.log(widgets[0]); // => {name: 'pencil'}
+ * // Attach an existing model
+ * var User = loopback.User;
+ * app.model(User);
+ *
+ * // Attach an existing model, alter some aspects of the model
+ * var User = loopback.User;
+ * app.model(User, { dataSource: 'db' });
+ *
+ * // The old way: create and attach a new model (deprecated)
+ * var Widget = app.model('Widget', {
+ *   dataSource: 'db',
+ *   properties: {
+ *     name: 'string'
+ *   }
  * });
  * ```
  * 
- * @param {String} modelName The name of the model to define.
+ * @param {Object|String} Model The model to attach.
  * @options {Object} config The model's configuration.
- * @property {String|DataSource} dataSource The `DataSource` to which to attach the model.
- * @property {Object} [options] an object containing `Model` options.
- * @property {ACL[]} [options.acls] an array of `ACL` definitions.
- * @property {String[]} [options.hidden] **experimental** an array of properties to hide when accessed remotely.
- * @property {Object} [properties] object defining the `Model` properties in [LoopBack Definition Language](http://docs.strongloop.com/loopback-datasource-juggler/#loopback-definition-language).
+ * @property {String|DataSource} dataSource The `DataSource` to which to
+ * attach the model.
+ * @property {Boolean} [public] whether the model should be exposed via REST API
+ * @property {Object} [relations] relations to add/update
  * @end
  * @returns {ModelConstructor} the model class
  */
 
 app.model = function (Model, config) {
-  var modelName = null;
   var isPublic = true;
   if (arguments.length > 1) {
     config = config || {};
-    modelName = Model;
-    assert(typeof modelName === 'string', 'app.model(name, config) => "name" name must be a string');
-    Model = modelFromConfig(modelName, config, this);
+    if (typeof Model === 'string') {
+      // create & attach the model - backwards compatibility
+
+      // create config for loopback.modelFromConfig
+      var modelConfig = extend({}, config);
+      modelConfig.options = extend({}, config.options);
+      modelConfig.name = Model;
+
+      // modeller does not understand `dataSource` option
+      delete modelConfig.dataSource;
+
+      Model = loopback.createModelFromConfig(modelConfig);
+
+      // delete config options already applied
+      ['relations', 'base', 'acls', 'hidden'].forEach(function(prop) {
+        delete config[prop];
+        if (config.options) delete config.options[prop];
+      });
+      delete config.properties;
+    }
+
+    configureModel(Model, config, this);
     isPublic = config.public !== false;
   } else {
-    assert(typeof Model === 'function', 'app.model(Model) => Model must be a function / constructor');
-    modelName = Model.modelName;
-    assert(modelName, 'Model must have a "modelName" property');
+    assertIsModel(Model);
   }
 
+  var modelName = Model.modelName;
   this.models[modelName] =
     this.models[classify(modelName)] =
       this.models[camelize(modelName)] = Model;
@@ -137,6 +163,14 @@ app.model = function (Model, config) {
   return Model;
 };
 
+function assertIsModel(Model) {
+  assert(typeof Model === 'function',
+    'Model must be a function / constructor');
+  assert(Model.modelName, 'Model must have a "modelName" property');
+  assert(Model.prototype instanceof loopback.Model,
+    'Model must be a descendant of loopback.Model');
+}
+
 /**
  * Get the models exported by the app. Returns only models defined using `app.model()`
  *
@@ -570,41 +604,23 @@ function dataSourcesFromConfig(config, connectorRegistry) {
   return require('./loopback').createDataSource(config);
 }
 
-function modelFromConfig(name, config, app) {
-  var options = buildModelOptionsFromConfig(config);
-  var properties = config.properties;
+function configureModel(ModelCtor, config, app) {
+  assertIsModel(ModelCtor);
 
-  var ModelCtor = require('./loopback').createModel(name, properties, options);
   var dataSource = config.dataSource;
 
   if(typeof dataSource === 'string') {
     dataSource = app.dataSources[dataSource];
   }
 
-  assert(isDataSource(dataSource), name + ' is referencing a dataSource that does not exist: "'+ config.dataSource +'"');
+  assert(isDataSource(dataSource),
+      ModelCtor.modelName + ' is referencing a dataSource that does not exist: "' +
+        config.dataSource +'"');
 
-  ModelCtor.attachTo(dataSource);
-  return ModelCtor;
-}
+  config = extend({}, config);
+  config.dataSource = dataSource;
 
-function buildModelOptionsFromConfig(config) {
-  var options = extend({}, config.options);
-  for (var key in config) {
-    if (['properties', 'options', 'dataSource'].indexOf(key) !== -1) {
-      // Skip items which have special meaning
-      continue;
-    }
-
-    if (options[key] !== undefined) {
-      // When both `config.key` and `config.options.key` are set,
-      // use the latter one to preserve backwards compatibility
-      // with loopback 1.x
-      continue;
-    }
-
-    options[key] = config[key];
-  }
-  return options;
+  loopback.configureModel(ModelCtor, config);
 }
 
 function requireDir(dir, basenames) {
@@ -676,10 +692,6 @@ function tryReadDir() {
   }
 }
 
-function isModelCtor(obj) {
-  return typeof obj === 'function' && obj.modelName && obj.name === 'ModelCtor';
-}
-
 function isDataSource(obj) {
   return obj instanceof DataSource;
 }
diff --git a/lib/loopback.js b/lib/loopback.js
index d2017ee7..aa228fe7 100644
--- a/lib/loopback.js
+++ b/lib/loopback.js
@@ -7,7 +7,6 @@ var express = require('express')
   , ejs = require('ejs')
   , EventEmitter = require('events').EventEmitter
   , path = require('path')
-  , proto = require('./application')
   , DataSource = require('loopback-datasource-juggler').DataSource
   , ModelBuilder = require('loopback-datasource-juggler').ModelBuilder
   , i8n = require('inflection')
@@ -69,6 +68,9 @@ loopback.compat = require('./compat');
 function createApplication() {
   var app = express();
 
+  // Defer loading of `./application` until all `loopback` static methods
+  // are defined, because `./application` depends on loopback.
+  var proto = require('./application');
   merge(app, proto);
 
   // Create a new instance of models registry per each app instance
@@ -179,6 +181,91 @@ loopback.createModel = function (name, properties, options) {
   return model;
 };
 
+/**
+ * Create a model as described by the configuration object.
+ *
+ * @example
+ *
+ * ```js
+ * loopback.createModelFromConfig({
+ *   name: 'Author',
+ *   properties: {
+ *     firstName: 'string',
+ *     lastName: 'string
+ *   },
+ *   relations: {
+ *     books: {
+ *       model: 'Book',
+ *       type: 'hasAndBelongsToMany'
+ *     }
+ *   }
+ * });
+ * ```
+ *
+ * @options {Object} model configuration
+ * @property {String} name Unique name.
+ * @property {Object=} properties Model properties
+ * @property {Object=} options Model options. Options can be specified on the
+ * top level config object too. E.g. `{ base: 'User' }` is the same as
+ * `{ options: { base: 'User' } }`.
+ */
+loopback.createModelFromConfig = function(config) {
+  var name = config.name;
+  var properties = config.properties;
+  var options = buildModelOptionsFromConfig(config);
+
+  assert(typeof name === 'string',
+    'The model-config property `name` must be a string');
+
+  return loopback.createModel(name, properties, options);
+};
+
+function buildModelOptionsFromConfig(config) {
+  var options = merge({}, config.options);
+  for (var key in config) {
+    if (['name', 'properties', 'options'].indexOf(key) !== -1) {
+      // Skip items which have special meaning
+      continue;
+    }
+
+    if (options[key] !== undefined) {
+      // When both `config.key` and `config.options.key` are set,
+      // use the latter one
+      continue;
+    }
+
+    options[key] = config[key];
+  }
+  return options;
+}
+
+/**
+ * Alter an existing Model class.
+ * @param {Model} ModelCtor The model constructor to alter.
+ * @options {Object} Additional configuration to apply
+ * @property {DataSource} dataSource Attach the model to a dataSource.
+ * @property {Object} relations Model relations to add/update.
+ */
+loopback.configureModel = function(ModelCtor, config) {
+  var settings = ModelCtor.settings;
+
+  if (config.relations) {
+    var relations = settings.relations = settings.relations || {};
+    Object.keys(config.relations).forEach(function(key) {
+      relations[key] = merge(relations[key] || {}, config.relations[key]);
+    });
+  }
+
+  // It's important to attach the datasource after we have updated
+  // configuration, so that the datasource picks up updated relations
+  if (config.dataSource) {
+    assert(config.dataSource instanceof DataSource,
+        'Cannot configure ' + ModelCtor.modelName +
+        ': config.dataSource must be an instance of loopback.DataSource');
+    ModelCtor.attachTo(config.dataSource);
+  }
+};
+
 /**
  * Add a remote method to a model.
  * @param {Function} fn
diff --git a/test/app.test.js b/test/app.test.js
index e3e73c81..803fcdaf 100644
--- a/test/app.test.js
+++ b/test/app.test.js
@@ -136,6 +136,20 @@ describe('app', function() {
 
   });
 
+  describe('app.model(ModelCtor, config)', function() {
+    it('attaches the model to a datasource', function() {
+      app.dataSource('db', { connector: 'memory' });
+      var TestModel = loopback.Model.extend('TestModel');
+      // TestModel was most likely already defined in a different test,
+      // thus TestModel.dataSource may be already set
+      delete TestModel.dataSource;
+
+      app.model(TestModel, { dataSource: 'db' });
+
+      expect(app.models.TestModel.dataSource).to.equal(app.dataSources.db);
+    });
+  });
+
   describe('app.models', function() {
     it('is unique per app instance', function() {
       app.dataSource('db', { connector: 'memory' });
diff --git a/test/loopback.test.js b/test/loopback.test.js
index 7988fdb4..5cb28098 100644
--- a/test/loopback.test.js
+++ b/test/loopback.test.js
@@ -1,4 +1,11 @@
 describe('loopback', function() {
+  var nameCounter = 0;
+  var uniqueModelName;
+
+  beforeEach(function() {
+    uniqueModelName = 'TestModel-' + (++nameCounter);
+  });
+
   describe('exports', function() {
     it('ValidationError', function() {
       expect(loopback.ValidationError).to.be.a('function')
@@ -119,4 +126,95 @@ describe('loopback', function() {
       });
     });
   });
+
+  describe('loopback.createModelFromConfig(config)', function() {
+    it('creates the model', function() {
+      var model = loopback.createModelFromConfig({
+        name: uniqueModelName
+      });
+
+      expect(model.prototype).to.be.instanceof(loopback.Model);
+    });
+
+    it('interprets extra first-level keys as options', function() {
+      var model = loopback.createModelFromConfig({
+        name: uniqueModelName,
+        base: 'User'
+      });
+
+      expect(model.prototype).to.be.instanceof(loopback.User);
+    });
+
+    it('prefers config.options.key over config.key', function() {
+      var model = loopback.createModelFromConfig({
+        name: uniqueModelName,
+        base: 'User',
+        options: {
+          base: 'Application'
+        }
+      });
+
+      expect(model.prototype).to.be.instanceof(loopback.Application);
+    });
+  });
+
+  describe('loopback.configureModel(ModelCtor, config)', function() {
+    it('adds new relations', function() {
+      var model = loopback.Model.extend(uniqueModelName);
+
+      loopback.configureModel(model, {
+        relations: {
+          owner: {
+            type: 'belongsTo',
+            model: 'User'
+          }
+        }
+      });
+
+      expect(model.settings.relations).to.have.property('owner');
+    });
+
+    it('updates existing relations', function() {
+      var model = loopback.Model.extend(uniqueModelName, {}, {
+        relations: {
+          owner: {
+            type: 'belongsTo',
+            model: 'User'
+          }
+        }
+      });
+
+      loopback.configureModel(model, {
+        relations: {
+          owner: {
+            model: 'Application'
+          }
+        }
+      });
+
+      expect(model.settings.relations.owner).to.eql({
+        type: 'belongsTo',
+        model: 'Application'
+      });
+    });
+
+    it('updates relations before attaching to a dataSource', function() {
+      var db = loopback.createDataSource({ connector: loopback.Memory });
+      var model = loopback.Model.extend(uniqueModelName);
+
+      loopback.configureModel(model, {
+        dataSource: db,
+        relations: {
+          owner: {
+            type: 'belongsTo',
+            model: 'User'
+          }
+        }
+      });
+
+      var owner = model.prototype.owner;
+      expect(owner, 'model.prototype.owner').to.be.a('function');
+      expect(owner._targetClass).to.equal('User');
+    });
+  });
 });