diff --git a/.gitmodules b/.gitmodules
index 12316f30e72..8ea8376a6a4 100644
--- a/.gitmodules
+++ b/.gitmodules
@@ -4,6 +4,3 @@
 [submodule "homeassistant/external/pywemo"]
 	path = homeassistant/external/pywemo
 	url = https://github.com/balloob/pywemo.git
-[submodule "homeassistant/external/phue"]
-	path = homeassistant/external/phue
-	url = https://github.com/studioimaginaire/phue.git
diff --git a/README.md b/README.md
index b4f1e8dc7fd..67ecbdcf27b 100644
--- a/README.md
+++ b/README.md
@@ -58,8 +58,6 @@ After you got the demo mode running it is time to enable some real components an
 ### Philips Hue
 To get Philips Hue working you will have to connect Home Assistant to the Hue bridge.
 
-*Note*: Home Assistant depends on a feature of Phue that is available on GitHub but not on Pypi. Home Assistant will include Phue as a git submodule till this issue is resolved. Before using Philips Hue you will have to install the Phue library so it can create a config file. Do so by running from the Home Assistant directory: `pip3 install -e homeassistant/external/phue`.
-
 Run the following command from your config dir and follow the instructions:
 
 ```bash
diff --git a/homeassistant/components/light/hue.py b/homeassistant/components/light/hue.py
index c7419b931f4..8deb4111e4f 100644
--- a/homeassistant/components/light/hue.py
+++ b/homeassistant/components/light/hue.py
@@ -17,9 +17,7 @@ def get_lights(hass, config):
     """ Gets the Hue lights. """
     logger = logging.getLogger(__name__)
     try:
-        # Pylint does not play nice if not every folders has an __init__.py
-        # pylint: disable=no-name-in-module, import-error
-        import homeassistant.external.phue.phue as phue
+        import phue
     except ImportError:
         logger.exception("Error while importing dependency phue.")
 
diff --git a/homeassistant/external/phue b/homeassistant/external/phue
deleted file mode 160000
index c96d8d5dbe0..00000000000
--- a/homeassistant/external/phue
+++ /dev/null
@@ -1 +0,0 @@
-Subproject commit c96d8d5dbe08adfe3919734c1c8403cd7ec4873e
diff --git a/requirements.txt b/requirements.txt
index 2083943ea10..c4885c361f5 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -7,7 +7,7 @@ requests>=2.0
 pyephem>=3.7
 
 # lights.hue
-# phue>=0.7
+phue>=0.8
 
 # chromecast
 pychromecast>=0.5