diff --git a/lib/Serverless.js b/lib/Serverless.js
index ef52183e3..5a59244c1 100644
--- a/lib/Serverless.js
+++ b/lib/Serverless.js
@@ -42,20 +42,17 @@ class Serverless {
   }
 
   init() {
-    return this.service.load()
+    // create a new CLI instance
+    this.cli = new CLI(this, this.config.interactive);
+
+    // get an array of commands and options that should be processed
+    this.processedInput = this.cli.processInput();
+
+    // set the options
+    this.pluginManager.setOptions(this.processedInput.options);
+
+    return this.service.load(this.processedInput.options)
       .then(() => {
-        // create a new CLI instance
-        this.cli = new CLI(
-          this,
-          this.config.interactive
-        );
-
-        // get an array of commands and options that should be processed
-        this.processedInput = this.cli.processInput();
-
-        // set the options
-        this.pluginManager.setOptions(this.processedInput.options);
-
         // load all plugins
         this.pluginManager.loadAllPlugins();
 
diff --git a/lib/classes/Service.js b/lib/classes/Service.js
index e5af69d8f..a2d446569 100644
--- a/lib/classes/Service.js
+++ b/lib/classes/Service.js
@@ -76,15 +76,19 @@ class Service {
         return BbPromise.resolve(that);
       })
       .then(() => {
-        /*
-         * TODO: Do we need to update default options here?
-         */
+        if (!options.stage) {
+          options.stage = this.defaults.stage;
+        }
+
+        if (!options.region) {
+          options.region = this.defaults.region;
+        }
 
         // Validate: Check stage exists
-        if (options.stage) this.getStage(options.stage);
+        this.getStage(options.stage);
 
         // Validate: Check region exists in stage
-        if (options.region) this.getRegionInStage(options.stage, options.region);
+        this.getRegionInStage(options.stage, options.region);
 
         let varTemplateSyntax = /\${([\s\S]+?)}/g;
 
@@ -95,7 +99,9 @@ class Service {
           this.variableSyntax = true;
         }
 
-        const variablesObject = this.getVariables(options.stage, options.region);
+        const commonVars = this.getVariables();
+        const stageVars = this.getVariables(options.stage);
+        const regionVars = this.getVariables(options.stage, options.region);
 
         // temporally remove environment obj. Doesn't make sense to
         // populate environment (stages, regions, vars)
@@ -117,11 +123,21 @@ class Service {
             val.match(varTemplateSyntax).forEach((variableSyntax) => {
               const variableName = variableSyntax
                 .replace(varTemplateSyntax, (match, varName) => varName.trim());
-              let value;
 
-              if (variableName in variablesObject) {
-                value = variablesObject[variableName];
+              let value;
+              
+              if (variableName in commonVars) {
+                value = commonVars[variableName];
               }
+
+              if (variableName in stageVars) {
+                value = stageVars[variableName];
+              }
+
+              if (variableName in regionVars) {
+                value = regionVars[variableName];
+              }
+
               // Populate
               if (!value && !value !== '') {
                 // SCLI.log('WARNING: This variable is not defined: ' + variableName);
diff --git a/tests/classes/Service.js b/tests/classes/Service.js
index 02b7fc77d..09b4b67c3 100644
--- a/tests/classes/Service.js
+++ b/tests/classes/Service.js
@@ -230,18 +230,14 @@ describe('Service', () => {
         },
         stages: {
           dev: {
-            vars: {
-              testVar: 'stageVar',
-            },
+            vars: {},
             regions: {},
           },
         },
       };
 
       serverlessEnvYaml.stages.dev.regions['us-east-1'] = {
-        vars: {
-          testVar: 'regionVar',
-        },
+        vars: {},
       };
 
       SUtils.writeFileSync(path.join(tmpDirPath, 'serverless.yaml'),
@@ -261,8 +257,8 @@ describe('Service', () => {
         expect(loadedService.service).to.be.equal('commonVar');
         expect(loadedService.plugins).to.deep.equal(['testPlugin']);
         expect(loadedService.environment.vars).to.deep.equal(commonVars);
-        expect(serviceInstance.environment.stages.dev.regions['us-east-1'].vars.testVar)
-          .to.be.equal('regionVar');
+        expect(serviceInstance.environment.stages.dev.regions['us-east-1'].vars)
+          .to.deep.equal({});
         expect(loadedService.resources.aws).to.deep.equal({ resourcesProp: 'value' });
         expect(loadedService.resources.azure).to.deep.equal({});
         expect(loadedService.resources.google).to.deep.equal({});
@@ -292,9 +288,7 @@ describe('Service', () => {
       };
 
       serverlessEnvYaml.stages.dev.regions['us-east-1'] = {
-        vars: {
-          testVar: 'regionVar',
-        },
+        vars: {},
       };
 
       SUtils.writeFileSync(path.join(tmpDirPath, 'serverless.yaml'),
@@ -304,10 +298,7 @@ describe('Service', () => {
 
       const serverless = new Serverless({ servicePath: tmpDirPath });
       serviceInstance = new Service(serverless);
-      const options = {
-        stage: 'dev',
-      };
-      return serviceInstance.load(options).then((loadedService) => {
+      return serviceInstance.load().then((loadedService) => {
         expect(loadedService.service).to.be.equal('stageVar');
       });
     });
@@ -349,11 +340,7 @@ describe('Service', () => {
       const serverless = new Serverless({ servicePath: tmpDirPath });
       serviceInstance = new Service(serverless);
 
-      const options = {
-        stage: 'dev',
-        region: 'us-east-1',
-      };
-      return serviceInstance.load(options).then((loadedService) => {
+      return serviceInstance.load().then((loadedService) => {
         expect(loadedService.service).to.be.equal('regionVar');
       });
     });