diff --git a/src/lib/autocomplete/autocomplete-trigger.ts b/src/lib/autocomplete/autocomplete-trigger.ts
index 89e8d3487b90..9d1b1241f660 100644
--- a/src/lib/autocomplete/autocomplete-trigger.ts
+++ b/src/lib/autocomplete/autocomplete-trigger.ts
@@ -7,7 +7,7 @@
  */
 
 import {Directionality} from '@angular/cdk/bidi';
-import {DOWN_ARROW, ENTER, ESCAPE, UP_ARROW} from '@angular/cdk/keycodes';
+import {DOWN_ARROW, ENTER, ESCAPE, UP_ARROW, TAB} from '@angular/cdk/keycodes';
 import {
   ConnectedPositionStrategy,
   Overlay,
@@ -270,19 +270,21 @@ export class MdAutocompleteTrigger implements ControlValueAccessor, OnDestroy {
   }
 
   _handleKeydown(event: KeyboardEvent): void {
-    if (event.keyCode === ESCAPE && this.panelOpen) {
+    const keyCode = event.keyCode;
+
+    if (keyCode === ESCAPE && this.panelOpen) {
       this._resetActiveItem();
       this.closePanel();
       event.stopPropagation();
-    } else if (this.activeOption && event.keyCode === ENTER && this.panelOpen) {
+    } else if (this.activeOption && keyCode === ENTER && this.panelOpen) {
       this.activeOption._selectViaInteraction();
       this._resetActiveItem();
       event.preventDefault();
     } else {
       const prevActiveItem = this.autocomplete._keyManager.activeItem;
-      const isArrowKey = event.keyCode === UP_ARROW || event.keyCode === DOWN_ARROW;
+      const isArrowKey = keyCode === UP_ARROW || keyCode === DOWN_ARROW;
 
-      if (this.panelOpen) {
+      if (this.panelOpen || keyCode === TAB) {
         this.autocomplete._keyManager.onKeydown(event);
       } else if (isArrowKey) {
         this.openPanel();
diff --git a/src/lib/autocomplete/autocomplete.spec.ts b/src/lib/autocomplete/autocomplete.spec.ts
index e4886f42dd1d..c99c9865eb6b 100644
--- a/src/lib/autocomplete/autocomplete.spec.ts
+++ b/src/lib/autocomplete/autocomplete.spec.ts
@@ -1,9 +1,14 @@
 import {Direction, Directionality} from '@angular/cdk/bidi';
-import {DOWN_ARROW, ENTER, ESCAPE, SPACE, UP_ARROW} from '@angular/cdk/keycodes';
+import {DOWN_ARROW, ENTER, ESCAPE, SPACE, UP_ARROW, TAB} from '@angular/cdk/keycodes';
 import {OverlayContainer} from '@angular/cdk/overlay';
 import {map, RxChain, startWith} from '@angular/cdk/rxjs';
 import {ScrollDispatcher} from '@angular/cdk/scrolling';
-import {createKeyboardEvent, dispatchFakeEvent, typeInElement} from '@angular/cdk/testing';
+import {
+  createKeyboardEvent,
+  dispatchKeyboardEvent,
+  dispatchFakeEvent,
+  typeInElement,
+} from '@angular/cdk/testing';
 import {
   ChangeDetectionStrategy,
   Component,
@@ -944,6 +949,26 @@ describe('MdAutocomplete', () => {
       });
     }));
 
+    it('should close the panel when tabbing away from a trigger without results', async(() => {
+      const trigger = fixture.componentInstance.trigger;
+
+      fixture.componentInstance.states = [];
+      fixture.componentInstance.filteredStates = [];
+      fixture.detectChanges();
+      input.focus();
+
+      fixture.whenStable().then(() => {
+        expect(overlayContainerElement.querySelector('.mat-autocomplete-panel'))
+            .toBeTruthy('Expected panel to be rendered.');
+
+        dispatchKeyboardEvent(input, 'keydown', TAB);
+        fixture.detectChanges();
+
+        expect(overlayContainerElement.querySelector('.mat-autocomplete-panel'))
+            .toBeFalsy('Expected panel to be removed.');
+      });
+    }));
+
     it('should reset the active option when closing with the escape key', fakeAsync(() => {
       const trigger = fixture.componentInstance.trigger;