diff --git a/python/ray/services.py b/python/ray/services.py
index 2e24eefe8..8cfd8aeee 100644
--- a/python/ray/services.py
+++ b/python/ray/services.py
@@ -910,6 +910,7 @@ def start_raylet(redis_address,
                  plasma_store_name,
                  worker_path,
                  resources=None,
+                 num_workers=0,
                  stdout_file=None,
                  stderr_file=None,
                  cleanup=True):
@@ -956,8 +957,15 @@ def start_raylet(redis_address,
                                 plasma_store_name, raylet_name, redis_address))
 
     command = [
-        RAYLET_EXECUTABLE, raylet_name, plasma_store_name, node_ip_address,
-        gcs_ip_address, gcs_port, start_worker_command, resource_argument
+        RAYLET_EXECUTABLE,
+        raylet_name,
+        plasma_store_name,
+        node_ip_address,
+        gcs_ip_address,
+        gcs_port,
+        str(num_workers),
+        start_worker_command,
+        resource_argument,
     ]
     pid = subprocess.Popen(command, stdout=stdout_file, stderr=stderr_file)
 
@@ -1471,6 +1479,7 @@ def start_ray_processes(address_info=None,
                     object_store_addresses[i].name,
                     worker_path,
                     resources=resources[i],
+                    num_workers=workers_per_local_scheduler[i],
                     stdout_file=raylet_stdout_file,
                     stderr_file=raylet_stderr_file,
                     cleanup=cleanup))
diff --git a/python/ray/worker.py b/python/ray/worker.py
index edd788cfb..a12f93a54 100644
--- a/python/ray/worker.py
+++ b/python/ray/worker.py
@@ -504,7 +504,7 @@ class Worker(object):
 
         # If there were objects that we weren't able to get locally, let the
         # local scheduler know that we're now unblocked.
-        if was_blocked and not self.use_raylet:
+        if was_blocked:
             self.local_scheduler_client.notify_unblocked()
 
         assert len(final_results) == len(object_ids)
diff --git a/src/ray/raylet/main.cc b/src/ray/raylet/main.cc
index 77a2d708c..453df9dc5 100644
--- a/src/ray/raylet/main.cc
+++ b/src/ray/raylet/main.cc
@@ -6,15 +6,16 @@
 
 #ifndef RAYLET_TEST
 int main(int argc, char *argv[]) {
-  RAY_CHECK(argc == 8);
+  RAY_CHECK(argc == 9);
 
   const std::string raylet_socket_name = std::string(argv[1]);
   const std::string store_socket_name = std::string(argv[2]);
   const std::string node_ip_address = std::string(argv[3]);
   const std::string redis_address = std::string(argv[4]);
   int redis_port = std::stoi(argv[5]);
-  const std::string worker_command = std::string(argv[6]);
-  const std::string static_resource_list = std::string(argv[7]);
+  int num_initial_workers = std::stoi(argv[6]);
+  const std::string worker_command = std::string(argv[7]);
+  const std::string static_resource_list = std::string(argv[8]);
 
   // Configuration for the node manager.
   ray::raylet::NodeManagerConfig node_manager_config;
@@ -33,7 +34,7 @@ int main(int argc, char *argv[]) {
       ray::raylet::ResourceSet(std::move(static_resource_conf));
   RAY_LOG(INFO) << "Starting raylet with static resource configuration: "
                 << node_manager_config.resource_config.ToString();
-  node_manager_config.num_initial_workers = 0;
+  node_manager_config.num_initial_workers = num_initial_workers;
   // Use a default worker that can execute empty tasks with dependencies.
 
   std::stringstream worker_command_stream(worker_command);
diff --git a/src/ray/raylet/node_manager.cc b/src/ray/raylet/node_manager.cc
index 1757737a3..14105e057 100644
--- a/src/ray/raylet/node_manager.cc
+++ b/src/ray/raylet/node_manager.cc
@@ -344,6 +344,65 @@ void NodeManager::ProcessClientMessage(std::shared_ptr<LocalClientConnection> cl
     ObjectID object_id = from_flatbuf(*message->object_id());
     RAY_LOG(DEBUG) << "reconstructing object " << object_id;
     RAY_CHECK_OK(object_manager_.Pull(object_id));
+
+    // If the blocked client is a worker, and the worker isn't already blocked,
+    // then release any CPU resources that it acquired for its assigned task
+    // while it is blocked. The resources will be acquired again once the
+    // worker is unblocked.
+    std::shared_ptr<Worker> worker = worker_pool_.GetRegisteredWorker(client);
+    if (worker && !worker->IsBlocked()) {
+      RAY_CHECK(!worker->GetAssignedTaskId().is_nil());
+      auto tasks = local_queues_.RemoveTasks({worker->GetAssignedTaskId()});
+      const auto &task = tasks.front();
+      // Get the CPU resources required by the running task.
+      const auto required_resources = task.GetTaskSpecification().GetRequiredResources();
+      double required_cpus = 0;
+      RAY_CHECK(required_resources.GetResource(kCPU_ResourceLabel, &required_cpus));
+      const std::unordered_map<std::string, double> cpu_resources = {
+          {kCPU_ResourceLabel, required_cpus}};
+      // Release the CPU resources.
+      RAY_CHECK(
+          cluster_resource_map_[gcs_client_->client_table().GetLocalClientId()].Release(
+              ResourceSet(cpu_resources)));
+      // Mark the task as blocked.
+      local_queues_.QueueBlockedTasks(tasks);
+      worker->MarkBlocked();
+
+      // Try to dispatch more tasks since the blocked worker released some
+      // resources.
+      DispatchTasks();
+    }
+  } break;
+  case protocol::MessageType_NotifyUnblocked: {
+    std::shared_ptr<Worker> worker = worker_pool_.GetRegisteredWorker(client);
+    // Re-acquire the CPU resources for the task that was assigned to the
+    // unblocked worker.
+    if (worker) {
+      RAY_CHECK(worker->IsBlocked());
+      RAY_CHECK(!worker->GetAssignedTaskId().is_nil());
+
+      auto tasks = local_queues_.RemoveTasks({worker->GetAssignedTaskId()});
+      const auto &task = tasks.front();
+      // Get the CPU resources required by the running task.
+      const auto required_resources = task.GetTaskSpecification().GetRequiredResources();
+      double required_cpus = 0;
+      RAY_CHECK(required_resources.GetResource(kCPU_ResourceLabel, &required_cpus));
+      const std::unordered_map<std::string, double> cpu_resources = {
+          {kCPU_ResourceLabel, required_cpus}};
+      // Acquire the CPU resources.
+      bool oversubscribed =
+          !cluster_resource_map_[gcs_client_->client_table().GetLocalClientId()].Acquire(
+              ResourceSet(cpu_resources));
+      if (oversubscribed) {
+        const SchedulingResources &local_resources =
+            cluster_resource_map_[gcs_client_->client_table().GetLocalClientId()];
+        RAY_LOG(WARNING) << "Resources oversubscribed: "
+                         << local_resources.GetAvailableResources().ToString();
+      }
+      // Mark the task as running again.
+      local_queues_.QueueRunningTasks(tasks);
+      worker->MarkUnblocked();
+    }
   } break;
 
   default:
diff --git a/src/ray/raylet/scheduling_queue.cc b/src/ray/raylet/scheduling_queue.cc
index 30919ded6..1ff6963cb 100644
--- a/src/ray/raylet/scheduling_queue.cc
+++ b/src/ray/raylet/scheduling_queue.cc
@@ -26,6 +26,10 @@ const std::list<Task> &SchedulingQueue::GetRunningTasks() const {
   return this->running_tasks_;
 }
 
+const std::list<Task> &SchedulingQueue::GetBlockedTasks() const {
+  return this->blocked_tasks_;
+}
+
 const std::list<Task> &SchedulingQueue::GetReadyMethods() const {
   throw std::runtime_error("Method not implemented");
 }
@@ -65,6 +69,7 @@ std::vector<Task> SchedulingQueue::RemoveTasks(
   removeTasksFromQueue(ready_tasks_, task_ids, removed_tasks);
   removeTasksFromQueue(scheduled_tasks_, task_ids, removed_tasks);
   removeTasksFromQueue(running_tasks_, task_ids, removed_tasks);
+  removeTasksFromQueue(blocked_tasks_, task_ids, removed_tasks);
   // TODO(swang): Remove from running methods.
 
   RAY_CHECK(task_ids.size() == 0);
@@ -91,6 +96,10 @@ void SchedulingQueue::QueueRunningTasks(const std::vector<Task> &tasks) {
   queueTasks(running_tasks_, tasks);
 }
 
+void SchedulingQueue::QueueBlockedTasks(const std::vector<Task> &tasks) {
+  queueTasks(blocked_tasks_, tasks);
+}
+
 }  // namespace raylet
 
 }  // namespace ray
diff --git a/src/ray/raylet/scheduling_queue.h b/src/ray/raylet/scheduling_queue.h
index ad47da4f7..068bfceb6 100644
--- a/src/ray/raylet/scheduling_queue.h
+++ b/src/ray/raylet/scheduling_queue.h
@@ -65,6 +65,13 @@ class SchedulingQueue {
   /// executing on a worker.
   const std::list<Task> &GetRunningTasks() const;
 
+  /// Get the tasks in the blocked state.
+  ///
+  /// \return A const reference to the queue of tasks that have been dispatched
+  /// to a worker but are blocked on a data dependency discovered to be missing
+  /// at runtime.
+  const std::list<Task> &GetBlockedTasks() const;
+
   /// Remove tasks from the task queue.
   ///
   /// \param tasks The set of task IDs to remove from the queue. The
@@ -77,7 +84,8 @@ class SchedulingQueue {
   /// \param tasks The tasks to queue.
   void QueueUncreatedActorMethods(const std::vector<Task> &tasks);
 
-  /// Queue tasks in the waiting state.
+  /// Queue tasks in the waiting state. These are tasks that cannot yet be
+  /// scheduled since they are blocked on a missing data dependency.
   ///
   /// \param tasks The tasks to queue.
   void QueueWaitingTasks(const std::vector<Task> &tasks);
@@ -97,6 +105,13 @@ class SchedulingQueue {
   /// \param tasks The tasks to queue.
   void QueueRunningTasks(const std::vector<Task> &tasks);
 
+  /// Queue tasks in the blocked state. These are tasks that have been
+  /// dispatched to a worker but are blocked on a data dependency that was
+  /// discovered to be missing at runtime.
+  ///
+  /// \param tasks The tasks to queue.
+  void QueueBlockedTasks(const std::vector<Task> &tasks);
+
  private:
   /// Tasks that are destined for actors that have not yet been created.
   std::list<Task> uncreated_actor_methods_;
@@ -109,6 +124,9 @@ class SchedulingQueue {
   std::list<Task> scheduled_tasks_;
   /// Tasks that are running on a worker.
   std::list<Task> running_tasks_;
+  /// Tasks that were dispatched to a worker but are blocked on a data
+  /// dependency that was missing at runtime.
+  std::list<Task> blocked_tasks_;
 };
 
 }  // namespace raylet
diff --git a/src/ray/raylet/scheduling_resources.cc b/src/ray/raylet/scheduling_resources.cc
index adb8a7e6a..6354e2570 100644
--- a/src/ray/raylet/scheduling_resources.cc
+++ b/src/ray/raylet/scheduling_resources.cc
@@ -73,19 +73,19 @@ bool ResourceSet::RemoveResource(const std::string &resource_name) {
   throw std::runtime_error("Method not implemented");
 }
 bool ResourceSet::SubtractResources(const ResourceSet &other) {
-  // Return failure if attempting to perform vector subtraction with unknown labels.
-  // TODO(atumanov): make the implementation atomic. Currently, if false is returned
-  // the resource capacity may be partially mutated. To reverse, call AddResources.
+  // Subtract the resources and track whether a resource goes below zero.
+  bool oversubscribed = false;
   for (const auto &resource_pair : other.GetResourceMap()) {
     const std::string &resource_label = resource_pair.first;
     const double &resource_capacity = resource_pair.second;
-    if (resource_capacity_.count(resource_label) == 0) {
-      return false;
-    } else {
-      resource_capacity_[resource_label] -= resource_capacity;
+    RAY_CHECK(resource_capacity_.count(resource_label) == 1)
+        << "Attempt to acquire unknown resource: " << resource_label;
+    resource_capacity_[resource_label] -= resource_capacity;
+    if (resource_capacity_[resource_label] < 0) {
+      oversubscribed = true;
     }
   }
-  return true;
+  return !oversubscribed;
 }
 
 bool ResourceSet::AddResources(const ResourceSet &other) {
diff --git a/src/ray/raylet/scheduling_resources.h b/src/ray/raylet/scheduling_resources.h
index 7474a2413..435fe450b 100644
--- a/src/ray/raylet/scheduling_resources.h
+++ b/src/ray/raylet/scheduling_resources.h
@@ -10,6 +10,8 @@ namespace ray {
 
 namespace raylet {
 
+const std::string kCPU_ResourceLabel = "CPU";
+
 /// Resource availability status reports whether the resource requirement is
 /// (1) infeasible, (2) feasible but currently unavailable, or (3) available.
 typedef enum {
@@ -160,7 +162,9 @@ class SchedulingResources {
   /// \brief Acquire the amount of resources specified.
   ///
   /// \param resources: the amount of resources to be acquired.
-  /// \return True if resources were successfully acquired. False otherwise.
+  /// \return True if resources were acquired without oversubscription. If this
+  /// returns false, then the resources were still acquired, but we are now at
+  /// negative resources.
   bool Acquire(const ResourceSet &resources);
 
  private:
diff --git a/src/ray/raylet/worker.cc b/src/ray/raylet/worker.cc
index cec388346..328cd1d7a 100644
--- a/src/ray/raylet/worker.cc
+++ b/src/ray/raylet/worker.cc
@@ -15,7 +15,14 @@ Worker::Worker(pid_t pid, std::shared_ptr<LocalClientConnection> connection)
     : pid_(pid),
       connection_(connection),
       assigned_task_id_(TaskID::nil()),
-      actor_id_(ActorID::nil()) {}
+      actor_id_(ActorID::nil()),
+      blocked_(false) {}
+
+void Worker::MarkBlocked() { blocked_ = true; }
+
+void Worker::MarkUnblocked() { blocked_ = false; }
+
+bool Worker::IsBlocked() const { return blocked_; }
 
 pid_t Worker::Pid() const { return pid_; }
 
diff --git a/src/ray/raylet/worker.h b/src/ray/raylet/worker.h
index 3017521ff..4690df88d 100644
--- a/src/ray/raylet/worker.h
+++ b/src/ray/raylet/worker.h
@@ -19,6 +19,9 @@ class Worker {
   Worker(pid_t pid, std::shared_ptr<LocalClientConnection> connection);
   /// A destructor responsible for freeing all worker state.
   ~Worker() {}
+  void MarkBlocked();
+  void MarkUnblocked();
+  bool IsBlocked() const;
   /// Return the worker's PID.
   pid_t Pid() const;
   void AssignTaskId(const TaskID &task_id);
@@ -37,6 +40,9 @@ class Worker {
   TaskID assigned_task_id_;
   /// The worker's actor ID. If this is nil, then the worker is not an actor.
   ActorID actor_id_;
+  /// Whether the worker is blocked. Workers become blocked in a `ray.get`, if
+  /// they require a data dependency while executing a task.
+  bool blocked_;
 };
 
 }  // namespace raylet