diff --git a/compose/cli/docker_client.py b/compose/cli/docker_client.py
index f782a1ae6..0c0113bb7 100644
--- a/compose/cli/docker_client.py
+++ b/compose/cli/docker_client.py
@@ -7,7 +7,6 @@ from docker import Client
 from docker.errors import TLSParameterError
 from docker.tls import TLSConfig
 from docker.utils import kwargs_from_env
-from requests.utils import urlparse
 
 from ..const import HTTP_TIMEOUT
 from .errors import UserError
@@ -21,24 +20,23 @@ def tls_config_from_options(options):
     cert = options.get('--tlscert')
     key = options.get('--tlskey')
     verify = options.get('--tlsverify')
-    hostname = urlparse(options.get('--host') or '').hostname
+    skip_hostname_check = options.get('--skip-hostname-check', False)
 
     advanced_opts = any([ca_cert, cert, key, verify])
 
     if tls is True and not advanced_opts:
         return True
-    elif advanced_opts:
+    elif advanced_opts:  # --tls is a noop
         client_cert = None
         if cert or key:
             client_cert = (cert, key)
+
         return TLSConfig(
             client_cert=client_cert, verify=verify, ca_cert=ca_cert,
-            assert_hostname=(
-                hostname or not options.get('--skip-hostname-check', False)
-            )
+            assert_hostname=False if skip_hostname_check else None
         )
-    else:
-        return None
+
+    return None
 
 
 def docker_client(environment, version=None, tls_config=None, host=None):
@@ -51,7 +49,7 @@ def docker_client(environment, version=None, tls_config=None, host=None):
                  "Please use COMPOSE_HTTP_TIMEOUT instead.")
 
     try:
-        kwargs = kwargs_from_env(assert_hostname=False, environment=environment)
+        kwargs = kwargs_from_env(environment=environment)
     except TLSParameterError:
         raise UserError(
             "TLS configuration is invalid - make sure your DOCKER_TLS_VERIFY "
diff --git a/requirements.txt b/requirements.txt
index 91d0487cd..76f224fbe 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,6 +1,6 @@
 PyYAML==3.11
 cached-property==1.2.0
-docker-py==1.8.0rc2
+docker-py==1.8.0rc5
 dockerpty==0.4.1
 docopt==0.6.1
 enum34==1.0.4
diff --git a/tests/unit/cli/docker_client_test.py b/tests/unit/cli/docker_client_test.py
index 56bab19c3..5334a9440 100644
--- a/tests/unit/cli/docker_client_test.py
+++ b/tests/unit/cli/docker_client_test.py
@@ -103,3 +103,9 @@ class TLSConfigTestCase(unittest.TestCase):
         options = {'--tlskey': self.key}
         with pytest.raises(docker.errors.TLSParameterError):
             tls_config_from_options(options)
+
+    def test_assert_hostname_explicit_skip(self):
+        options = {'--tlscacert': self.ca_cert, '--skip-hostname-check': True}
+        result = tls_config_from_options(options)
+        assert isinstance(result, docker.tls.TLSConfig)
+        assert result.assert_hostname is False