diff --git a/lib/ansible/inventory/group.py b/lib/ansible/inventory/group.py
index 0933e1ab5d0..4847e6fbd82 100644
--- a/lib/ansible/inventory/group.py
+++ b/lib/ansible/inventory/group.py
@@ -18,7 +18,6 @@ from __future__ import (absolute_import, division, print_function)
 __metaclass__ = type
 
 from ansible.errors import AnsibleError
-from ansible.utils.vars import combine_vars
 
 
 class Group:
@@ -31,7 +30,7 @@ class Group:
         self.depth = 0
         self.name = name
         self.hosts = []
-        self._hosts = set()
+        self._hosts = None
         self.vars = {}
         self.child_groups = []
         self.parent_groups = []
@@ -72,9 +71,8 @@ class Group:
         self.name = data.get('name')
         self.vars = data.get('vars', dict())
         self.depth = data.get('depth', 0)
-        self.hosts = data.get('hosts', {})
-
-        self._hosts = set(self.hosts)
+        self.hosts = data.get('hosts', [])
+        self._hosts = None
 
         parent_groups = data.get('parent_groups', [])
         for parent_data in parent_groups:
@@ -82,6 +80,12 @@ class Group:
             g.deserialize(parent_data)
             self.parent_groups.append(g)
 
+    @property
+    def host_names(self):
+        if self._hosts is None:
+            self._hosts = set(self.hosts)
+        return self._hosts
+
     def get_name(self):
         return self.name
 
@@ -119,7 +123,7 @@ class Group:
             raise AnsibleError("The group named '%s' has a recursive dependency loop." % self.name)
 
     def add_host(self, host):
-        if host.name not in self._hosts:
+        if host.name not in self.host_names:
             self.hosts.append(host)
             self._hosts.add(host.name)
             host.add_group(self)
@@ -127,7 +131,7 @@ class Group:
 
     def remove_host(self, host):
 
-        if host.name in self._hosts:
+        if host.name in self.host_names:
             self.hosts.remove(host)
             self._hosts.remove(host.name)
             host.remove_group(self)