diff --git a/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.spec.ts b/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.spec.ts
index e69de29bb2d..dabcb600464 100644
--- a/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.spec.ts
+++ b/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.spec.ts
@@ -0,0 +1,74 @@
+import { Component, ViewChild, Pipe, PipeTransform } from '@angular/core';
+import { async, TestBed } from '@angular/core/testing';
+import { NoopAnimationsModule } from '@angular/platform-browser/animations';
+import { IgxAutocompleteModule } from './autocomplete.directive';
+import { configureTestSuite } from '../../test-utils/configure-suite';
+import { UIInteractions } from '../../test-utils/ui-interactions.spec';
+import { IgxInputDirective } from '../input/input.directive';
+import { IgxInputGroupModule } from '../../input-group';
+import { IgxDropDownModule } from '../../drop-down';
+import { FormsModule, ReactiveFormsModule } from '@angular/forms';
+
+describe('IgxAutocomplete', () => {
+    configureTestSuite();
+
+    beforeEach(async(() => {
+        TestBed.configureTestingModule({
+            declarations: [
+                AutocompleteComponent,
+                IgxAutocompletePipeStartsWith
+            ],
+            imports: [
+                IgxInputGroupModule,
+                IgxDropDownModule,
+                IgxAutocompleteModule,
+                FormsModule,
+                ReactiveFormsModule,
+                NoopAnimationsModule
+            ]
+        })
+        .compileComponents();
+    }));
+
+    fit('Initializes autocomplete.', () => {
+        const fixture = TestBed.createComponent(AutocompleteComponent);
+        fixture.detectChanges();
+        const input = fixture.componentInstance.input;
+        UIInteractions.sendInput(input, 's', fixture);
+    });
+});
+
+@Component({
+    template: `<igx-input-group>
+        <input igxInput name="towns" type="text" [(ngModel)]="townSelected" required
+            [igxAutocomplete]='townsPanel'/>
+        <label igxLabel for="towns">Towns</label>
+    </igx-input-group>
+    <igx-drop-down #townsPanel>
+        <igx-drop-down-item *ngFor="let town of towns | startsWith:townSelected" [value]="town">
+            {{town}}
+        </igx-drop-down-item>
+    </igx-drop-down>`
+})
+class AutocompleteComponent {
+    @ViewChild(IgxInputDirective) public input: IgxInputDirective;
+    townSelected;
+    towns;
+
+    constructor() {
+        this.towns = [
+            // tslint:disable-next-line:max-line-length
+            1, 'Sofia', 'Plovdiv', 'Varna', 'Burgas', 'Ruse', 'Stara Zagora', 'Pleven', 'Dobrich', 'Sliven', 'Shumen', 'Pernik', 'Haskovo', 'Yambol', 'Pazardzhik', 'Blagoevgrad', 'Veliko Tarnovo', 'Vratsa', 'Gabrovo', 'Asenovgrad', 'Vidin', 'Kazanlak', 'Kyustendil', 'Kardzhali', 'Montana', 'Dimitrovgrad', 'Targovishte', 'Lovech', 'Silistra', 'Dupnitsa', 'Svishtov', 'Razgrad', 'Gorna Oryahovitsa', 'Smolyan', 'Petrich', 'Sandanski', 'Samokov', 'Sevlievo', 'Lom', 'Karlovo', 'Velingrad', 'Nova Zagora', 'Troyan', 'Aytos', 'Botevgrad', 'Gotse Delchev', 'Peshtera', 'Harmanli', 'Karnobat', 'Svilengrad', 'Panagyurishte', 'Chirpan', 'Popovo', 'Rakovski', 'Radomir', 'Novi Iskar', 'Kozloduy', 'Parvomay', 'Berkovitsa', 'Cherven Bryag', 'Pomorie', 'Ihtiman', 'Radnevo', 'Provadiya', 'Novi Pazar', 'Razlog', 'Byala Slatina', 'Nesebar', 'Balchik', 'Kostinbrod', 'Stamboliyski', 'Kavarna', 'Knezha', 'Pavlikeni', 'Mezdra', 'Etropole', 'Levski', 'Teteven', 'Elhovo', 'Bankya', 'Tryavna', 'Lukovit', 'Tutrakan', 'Sredets', 'Sopot', 'Byala', 'Veliki Preslav', 'Isperih', 'Belene', 'Omurtag', 'Bansko', 'Krichim', 'Galabovo', 'Devnya', 'Septemvri', 'Rakitovo', 'Lyaskovets', 'Svoge', 'Aksakovo', 'Kubrat', 'Dryanovo', 'Beloslav', 'Pirdop', 'Lyubimets', 'Momchilgrad', 'Slivnitsa', 'Hisarya', 'Zlatograd', 'Kostenets', 'Devin', 'General Toshevo', 'Simeonovgrad', 'Simitli', 'Elin Pelin', 'Dolni Chiflik', 'Tervel', 'Dulovo', 'Varshets', 'Kotel', 'Madan', 'Straldzha', 'Saedinenie', 'Bobov Dol', 'Tsarevo', 'Kuklen', 'Tvarditsa', 'Yakoruda', 'Elena', 'Topolovgrad', 'Bozhurishte', 'Chepelare', 'Oryahovo', 'Sozopol', 'Belogradchik', 'Perushtitsa', 'Zlatitsa', 'Strazhitsa', 'Krumovgrad', 'Kameno', 'Dalgopol', 'Vetovo', 'Suvorovo', 'Dolni Dabnik', 'Dolna Banya', 'Pravets', 'Nedelino', 'Polski Trambesh', 'Trastenik', 'Bratsigovo', 'Koynare', 'Godech', 'Slavyanovo', 'Dve Mogili', 'Kostandovo', 'Debelets', 'Strelcha', 'Sapareva Banya', 'Ignatievo', 'Smyadovo', 'Breznik', 'Sveti Vlas', 'Nikopol', 'Shivachevo', 'Belovo', 'Tsar Kaloyan', 'Ivaylovgrad', 'Valchedram', 'Marten', 'Glodzhevo', 'Sarnitsa', 'Letnitsa', 'Varbitsa', 'Iskar', 'Ardino', 'Shabla', 'Rudozem', 'Vetren', 'Kresna', 'Banya', 'Batak', 'Maglizh', 'Valchi Dol', 'Gulyantsi', 'Dragoman', 'Zavet', 'Kran', 'Miziya', 'Primorsko', 'Sungurlare', 'Dolna Mitropoliya', 'Krivodol', 'Kula', 'Kalofer', 'Slivo Pole', 'Kaspichan', 'Apriltsi', 'Belitsa', 'Roman', 'Dzhebel', 'Dolna Oryahovitsa', 'Buhovo', 'Gurkovo', 'Pavel Banya', 'Nikolaevo', 'Yablanitsa', 'Kableshkovo', 'Opaka', 'Rila', 'Ugarchin', 'Dunavtsi', 'Dobrinishte', 'Hadzhidimovo', 'Bregovo', 'Byala Cherkva', 'Zlataritsa', 'Kocherinovo', 'Dospat', 'Tran', 'Sadovo', 'Laki', 'Koprivshtitsa', 'Malko Tarnovo', 'Loznitsa', 'Obzor', 'Kilifarevo', 'Borovo', 'Batanovtsi', 'Chernomorets', 'Aheloy', 'Byala', 'Pordim', 'Suhindol', 'Merichleri', 'Glavinitsa', 'Chiprovtsi', 'Kermen', 'Brezovo', 'Plachkovtsi', 'Zemen', 'Balgarovo', 'Alfatar', 'Boychinovtsi', 'Gramada', 'Senovo', 'Momin Prohod', 'Kaolinovo', 'Shipka', 'Antonovo', 'Ahtopol', 'Boboshevo', 'Bolyarovo', 'Brusartsi', 'Klisura', 'Dimovo', 'Kiten', 'Pliska', 'Madzharovo', 'Melnik'
+        ];
+    }
+}
+
+@Pipe({ name: 'startsWith' })
+export class IgxAutocompletePipeStartsWith implements PipeTransform {
+    public transform(collection: any[], term = '', key?: string) {
+        return collection.filter(item => {
+            const currItem = key ? item[key] : item;
+            return currItem.toString().toLowerCase().startsWith(term.toString().toLowerCase());
+        });
+    }
+}
diff --git a/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.ts b/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.ts
index 69380d10559..882a7450c6a 100644
--- a/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.ts
+++ b/projects/igniteui-angular/src/lib/directives/autocomplete/autocomplete.directive.ts
@@ -137,6 +137,7 @@ export class IgxAutocompleteDirective extends IgxDropDownItemNavigationDirective
         if (!value.newSelection) {
             return;
         }
+        value.cancel = true;
         const newValue = value.newSelection.value;
         const args: IAutocompleteItemSelectionEventArgs = { value: newValue, cancel: false };
         this.onItemSelected.emit(args);