diff -r f349e03bb41f Lib/unittest/mock.py
--- a/Lib/unittest/mock.py	Tue Mar 05 01:37:02 2013 -0500
+++ b/Lib/unittest/mock.py	Sun Apr 07 15:43:31 2013 +0300
@@ -931,6 +931,8 @@
                 result = next(effect)
                 if _is_exception(result):
                     raise result
+                if result is DEFAULT:
+                    result = self.return_value
                 return result
 
             ret_val = effect(*args, **kwargs)
diff -r f349e03bb41f Lib/unittest/test/testmock/testmock.py
--- a/Lib/unittest/test/testmock/testmock.py	Tue Mar 05 01:37:02 2013 -0500
+++ b/Lib/unittest/test/testmock/testmock.py	Sun Apr 07 15:43:31 2013 +0300
@@ -978,6 +978,10 @@
         self.assertRaises(StopIteration, mock)
         self.assertIs(mock.side_effect, this_iter)
 
+    def test_side_effect_iterator_default(self):
+        mock = Mock(return_value=2)
+        mock.side_effect = iter([1, DEFAULT])
+        self.assertEqual([mock(), mock()], [1, 2])
 
     def test_assert_has_calls_any_order(self):
         mock = Mock()