diff --git a/src/demo-app/select/select-demo.html b/src/demo-app/select/select-demo.html
index 821934b4b59f..b1fc095641b5 100644
--- a/src/demo-app/select/select-demo.html
+++ b/src/demo-app/select/select-demo.html
@@ -19,6 +19,8 @@
   <md-card>
     <md-select placeholder="Drink" [(ngModel)]="currentDrink" [required]="isRequired" [disabled]="isDisabled"
       [floatPlaceholder]="floatPlaceholder" #drinkControl="ngModel">
+      #drinkControl="ngModel">
+      <md-option>None</md-option>
       <md-option *ngFor="let drink of drinks" [value]="drink.value" [disabled]="drink.disabled">
         {{ drink.viewValue }}
       </md-option>
diff --git a/src/demo-app/select/select-demo.ts b/src/demo-app/select/select-demo.ts
index b731087b5624..3307dd1ee848 100644
--- a/src/demo-app/select/select-demo.ts
+++ b/src/demo-app/select/select-demo.ts
@@ -18,6 +18,7 @@ export class SelectDemo {
   foodControl = new FormControl('pizza-1');
 
   foods = [
+    {value: null, viewValue: 'None'},
     {value: 'steak-0', viewValue: 'Steak'},
     {value: 'pizza-1', viewValue: 'Pizza'},
     {value: 'tacos-2', viewValue: 'Tacos'}
diff --git a/src/lib/select/select.spec.ts b/src/lib/select/select.spec.ts
index ab82b27c9634..bebf3907eca9 100644
--- a/src/lib/select/select.spec.ts
+++ b/src/lib/select/select.spec.ts
@@ -38,7 +38,8 @@ describe('MdSelect', () => {
         FloatPlaceholderSelect,
         SelectWithErrorSibling,
         ThrowsErrorOnInit,
-        BasicSelectOnPush
+        BasicSelectOnPush,
+        ResetValuesSelect
       ],
       providers: [
         {provide: OverlayContainer, useFactory: () => {
@@ -1342,6 +1343,72 @@ describe('MdSelect', () => {
       expect(trigger.textContent).not.toContain('Pizza');
     });
   });
+
+  describe('reset values', () => {
+    let fixture: ComponentFixture<ResetValuesSelect>;
+    let trigger: HTMLElement;
+    let placeholder: HTMLElement;
+    let options: NodeListOf<HTMLElement>;
+
+
+    beforeEach(() => {
+      fixture = TestBed.createComponent(ResetValuesSelect);
+      fixture.detectChanges();
+      trigger = fixture.debugElement.query(By.css('.mat-select-trigger')).nativeElement;
+      placeholder = fixture.debugElement.query(By.css('.mat-select-placeholder')).nativeElement;
+
+      trigger.click();
+      fixture.detectChanges();
+      options = overlayContainerElement.querySelectorAll('md-option') as NodeListOf<HTMLElement>;
+
+      options[0].click();
+      fixture.detectChanges();
+    });
+
+    it('should reset when an option with an undefined value is selected', () => {
+      options[4].click();
+      fixture.detectChanges();
+
+      expect(fixture.componentInstance.control.value).toBeUndefined();
+      expect(fixture.componentInstance.select.selected).toBeFalsy();
+      expect(placeholder.classList).not.toContain('mat-floating-placeholder');
+      expect(trigger.textContent).not.toContain('Undefined');
+    });
+
+    it('should reset when an option with a null value is selected', () => {
+      options[5].click();
+      fixture.detectChanges();
+
+      expect(fixture.componentInstance.control.value).toBeNull();
+      expect(fixture.componentInstance.select.selected).toBeFalsy();
+      expect(placeholder.classList).not.toContain('mat-floating-placeholder');
+      expect(trigger.textContent).not.toContain('Null');
+    });
+
+    it('should not reset when any other falsy option is selected', () => {
+      options[3].click();
+      fixture.detectChanges();
+
+      expect(fixture.componentInstance.control.value).toBe(false);
+      expect(fixture.componentInstance.select.selected).toBeTruthy();
+      expect(placeholder.classList).toContain('mat-floating-placeholder');
+      expect(trigger.textContent).toContain('Falsy');
+    });
+
+    it('should not consider the reset values as selected when resetting the form control', () => {
+      expect(placeholder.classList).toContain('mat-floating-placeholder');
+
+      fixture.componentInstance.control.reset();
+      fixture.detectChanges();
+
+      expect(fixture.componentInstance.control.value).toBeNull();
+      expect(fixture.componentInstance.select.selected).toBeFalsy();
+      expect(placeholder.classList).not.toContain('mat-floating-placeholder');
+      expect(trigger.textContent).not.toContain('Null');
+      expect(trigger.textContent).not.toContain('Undefined');
+    });
+
+  });
 });
 
 
@@ -1588,6 +1655,32 @@ class FloatPlaceholderSelect {
   @ViewChild(MdSelect) select: MdSelect;
 }
 
+@Component({
+  selector: 'reset-values-select',
+  template: `
+    <md-select placeholder="Food" [formControl]="control" [required]="isRequired">
+      <md-option *ngFor="let food of foods" [value]="food.value">
+        {{ food.viewValue }}
+      </md-option>
+    </md-select>
+  `
+})
+class ResetValuesSelect {
+  foods: any[] = [
+    { value: 'steak-0', viewValue: 'Steak' },
+    { value: 'pizza-1', viewValue: 'Pizza' },
+    { value: 'tacos-2', viewValue: 'Tacos' },
+    { value: false, viewValue: 'Falsy' },
+    { viewValue: 'Undefined' },
+    { value: null, viewValue: 'Null' },
+  ];
+  control = new FormControl();
+  isRequired: boolean;
+
+  @ViewChild(MdSelect) select: MdSelect;
+  @ViewChildren(MdOption) options: QueryList<MdOption>;
+}
+
 
 /**
  * TODO: Move this to core testing utility until Angular has event faking
diff --git a/src/lib/select/select.ts b/src/lib/select/select.ts
index 1a92699e5437..db0870db2710 100644
--- a/src/lib/select/select.ts
+++ b/src/lib/select/select.ts
@@ -500,7 +500,7 @@ export class MdSelect implements AfterContentInit, ControlValueAccessor, OnDestr
 
   /** When a new option is selected, deselects the others and closes the panel. */
   private _onSelect(option: MdOption): void {
-    this._selected = option;
+    this._selected = option.value == null ? null : option;
     this._updateOptions();
     this._setValueWidth();
     this._placeholderState = '';