diff --git a/src/dropdown/dropdown.js b/src/dropdown/dropdown.js
index e7e8b1b81a..9957957e83 100644
--- a/src/dropdown/dropdown.js
+++ b/src/dropdown/dropdown.js
@@ -60,7 +60,7 @@ angular.module('ui.bootstrap.dropdown', ['ui.bootstrap.position'])
     else if ( openScope.isKeynavEnabled() && /(38|40)/.test(evt.which) && openScope.isOpen ) {
       evt.preventDefault();
       evt.stopPropagation();
-      openScope.focusMenuEntry(evt.which);
+      openScope.focusDropdownEntry(evt.which);
     }
   };
 }])
@@ -71,7 +71,7 @@ angular.module('ui.bootstrap.dropdown', ['ui.bootstrap.position'])
 	templateScope,
     openClass = dropdownConfig.openClass,
     getIsOpen,
-  setIsOpen = angular.noop,
+    setIsOpen = angular.noop,
     toggleInvoker = $attrs.onToggle ? $parse($attrs.onToggle) : angular.noop,
     appendToBody = false,
     keynavEnabled =false,
@@ -125,8 +125,8 @@ angular.module('ui.bootstrap.dropdown', ['ui.bootstrap.position'])
     return keynavEnabled;
   };
 
-  scope.focusMenuEntry = function(keyCode) {
-    var elems = self.dropdownMenu ?
+  scope.focusDropdownEntry = function(keyCode) {
+    var elems = self.dropdownMenu ? //If append to body is used.
       (angular.element(self.dropdownMenu).find('a')) :
       (angular.element(self.$element).find('ul').eq(0).find('a'));
 
@@ -135,14 +135,22 @@ angular.module('ui.bootstrap.dropdown', ['ui.bootstrap.position'])
         if ( !angular.isNumber(self.selectedOption)) {
           self.selectedOption = 0;
         } else {
-          self.selectedOption = (self.selectedOption === elems.length -1 ? self.selectedOption : self.selectedOption+1);
+          self.selectedOption = (self.selectedOption === elems.length -1 ?
+            self.selectedOption :
+            self.selectedOption + 1);
         }
+        break;
       }
-      break;
       case (38): {
-        self.selectedOption = (self.selectedOption === 0 ? 0 : self.selectedOption-1);
+        if ( !angular.isNumber(self.selectedOption)) {
+          return;
+        } else {
+          self.selectedOption = (self.selectedOption === 0 ?
+            0 :
+            self.selectedOption - 1);
+        }
+        break;
       }
-      break;
     }
     elems[self.selectedOption].focus();
   };
diff --git a/src/dropdown/test/dropdown.spec.js b/src/dropdown/test/dropdown.spec.js
index fa741caca4..ee7fcf8097 100644
--- a/src/dropdown/test/dropdown.spec.js
+++ b/src/dropdown/test/dropdown.spec.js
@@ -238,7 +238,7 @@ describe('dropdownToggle', function() {
       });
 
       return $compile('<li dropdown><a href dropdown-toggle></a>' +
-                      '<ul><li><a href="#something">Hello</a></li></ul></li>')($rootScope);
+        '<ul><li><a href="#something">Hello</a></li></ul></li>')($rootScope);
     }
 
     beforeEach(function() {
@@ -375,8 +375,8 @@ describe('dropdownToggle', function() {
   describe('`auto-close` option', function() {
     function dropdown(autoClose) {
       return $compile('<li dropdown ' +
-                      (autoClose === void 0 ? '' : 'auto-close="'+autoClose+'"') +
-                      '><a href dropdown-toggle></a><ul><li><a href>Hello</a></li></ul></li>')($rootScope);
+        (autoClose === void 0 ? '' : 'auto-close="'+autoClose+'"') +
+        '><a href dropdown-toggle></a><ul><li><a href>Hello</a></li></ul></li>')($rootScope);
     }
 
     it('should close on document click if no auto-close is specified', function() {
@@ -507,4 +507,147 @@ describe('dropdownToggle', function() {
       expect(isFocused(focusEl)).toBe(true);
     });
   });
+
+  describe('`keyboard-nav` option', function() {
+    function dropdown() {
+      return $compile('<li dropdown keyboard-nav><a href dropdown-toggle></a><ul><li><a href>Hello</a></li><li><a href>Hello Again</a></li></ul></li>')($rootScope);
+    }
+    beforeEach(function() {
+      element = dropdown();
+    });
+
+    it('should focus first list element when down arrow pressed', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a').eq(0);
+      expect(isFocused(focusEl)).toBe(true);
+    });
+
+    it('should not focus first list element when up arrow pressed after dropdown toggled', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+
+      triggerKeyDown($document, 38);
+      var focusEl = element.find('ul').eq(0).find('a').eq(0);
+      expect(isFocused(focusEl)).toBe(false);
+    });
+
+    it('should not focus any list element when down arrow pressed if closed', function() {
+      $document.find('body').append(element);
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(false);
+      var focusEl = element.find('ul').eq(0).find('a');
+      expect(isFocused(focusEl[0])).toBe(false);
+      expect(isFocused(focusEl[1])).toBe(false);
+    });
+
+    it('should not change focus when other keys are pressed', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      triggerKeyDown($document, 37);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a');
+      expect(isFocused(focusEl[0])).toBe(false);
+      expect(isFocused(focusEl[1])).toBe(false);
+    });
+
+    it('should focus second list element when down arrow pressed twice', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      triggerKeyDown($document, 40);
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a').eq(1);
+      expect(isFocused(focusEl)).toBe(true);
+    });
+
+    it('should focus first list element when down arrow pressed 2x and up pressed 1x', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      triggerKeyDown($document, 40);
+      triggerKeyDown($document, 40);
+
+      triggerKeyDown($document, 38);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a').eq(0);
+      expect(isFocused(focusEl)).toBe(true);
+    });
+
+    it('should stay focused on final list element if down pressed at list end', function() {
+      $document.find('body').append(element);
+      clickDropdownToggle();
+      triggerKeyDown($document, 40);
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a').eq(1);
+      expect(isFocused(focusEl)).toBe(true);
+
+      triggerKeyDown($document, 40);
+      expect(isFocused(focusEl)).toBe(true);
+    });
+
+    it('should close if esc is pressed while focused', function() {
+      element = dropdown('disabled');
+      $document.find('body').append(element);
+      clickDropdownToggle();
+
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = element.find('ul').eq(0).find('a').eq(0);
+      expect(isFocused(focusEl)).toBe(true);
+
+      triggerKeyDown($document, 27);
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(false);
+    });
+  });
+
+  describe('`keyboard-nav` option with `dropdown-append-to-body` option', function() {
+    function dropdown() {
+      return $compile('<li dropdown dropdown-append-to-body keyboard-nav><a href dropdown-toggle></a><ul class="dropdown-menu" id="dropdown-menu"><li><a href>Hello On Body</a></li><li><a href>Hello Again</a></li></ul></li>')($rootScope);
+    }
+
+    beforeEach(function() {
+      element = dropdown();
+    });
+
+    it('should focus first list element when down arrow pressed', function() {
+      clickDropdownToggle();
+
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var focusEl = $document.find('ul').eq(0).find('a');
+      expect(isFocused(focusEl)).toBe(true);
+    });
+
+    it('should not focus first list element when down arrow pressed if closed', function() {
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(false);
+      var focusEl = $document.find('ul').eq(0).find('a');
+      expect(isFocused(focusEl)).toBe(false);
+    });
+
+    it('should focus second list element when down arrow pressed twice', function() {
+      clickDropdownToggle();
+      triggerKeyDown($document, 40);
+      triggerKeyDown($document, 40);
+
+      expect(element.hasClass(dropdownConfig.openClass)).toBe(true);
+      var elem1 = $document.find('ul');
+      var elem2 = elem1.find('a');
+      var focusEl = $document.find('ul').eq(0).find('a').eq(1);
+      expect(isFocused(focusEl)).toBe(true);
+    });
+  });
 });