diff --git a/src/components/calendar/calendar.js b/src/components/calendar/calendar.js
index c2b16d91147..2936d825fc6 100644
--- a/src/components/calendar/calendar.js
+++ b/src/components/calendar/calendar.js
@@ -27,11 +27,9 @@
   // TODO(jelbourn): Animations should use `.finally()` instead of `.then()`
   // TODO(jelbourn): improve default date parser in locale provider.
   // TODO(jelbourn): read-only state.
+  // TODO(jelbourn): make aria-live element visibly hidden (but still present on the page).
 
   function calendarDirective() {
-    // Generate a unique ID for each instance of the directive.
-    var directiveId = 0;
-
     return {
       template:
         '<div>' +
@@ -50,7 +48,6 @@
       link: function(scope, element, attrs, controllers) {
         var ngModelCtrl = controllers[0];
         var mdCalendarCtrl = controllers[1];
-        mdCalendarCtrl.directiveId = directiveId++;
         mdCalendarCtrl.configureNgModel(ngModelCtrl);
       }
     };
@@ -74,6 +71,9 @@
   /** Class applied to the cell for today. */
   var TODAY_CLASS = 'md-calendar-date-today';
 
+  /** Next idientifier for calendar instance. */
+  var nextUniqueId = 0;
+
   /**
    * Controller for the mdCalendar component.
    * @ngInject @constructor
@@ -117,6 +117,9 @@
     /** @final {Date} */
     this.today = new Date();
 
+    /** @final {number} Unique ID for this calendar instance. */
+    this.id = nextUniqueId++;
+
     /** @type {!angular.NgModelController} */
     this.ngModelCtrl = null;
 
@@ -227,7 +230,14 @@
   CalendarCtrl.prototype.handleKeyEvent = function(event) {
     var self = this;
     this.$scope.$apply(function() {
-      // Handled key events fall into two categories: selection and navigation.
+      // Capture escape and emit back up so that a wrapping component (such as a date-picker)
+      // can decide to close.
+      if (event.which == self.keyCode.ESCAPE) {
+        self.$scope.$emit('md-calendar-escape');
+        return;
+      }
+
+      // Remaining key events fall into two categories: selection and navigation.
       // Start by checking if this is a selection event.
       if (event.which === self.keyCode.ENTER) {
         self.setNgModelValue(self.displayDate);
@@ -292,6 +302,11 @@
     var cell = this.calendarElement.querySelector('#' + cellId);
     cell.focus();
   };
+
+  /** Focus the calendar. */
+  CalendarCtrl.prototype.focus = function() {
+    this.focusDateElement(this.selectedDate);
+  };
   
 
   /*** Animation ***/
@@ -470,11 +485,15 @@
    */
   CalendarCtrl.prototype.changeSelectedDate = function(date) {
     var self = this;
+    var previousSelectedDate = this.selectedDate;
+    this.selectedDate = date;
+
     this.changeDisplayDate(date).then(function() {
 
       // Remove the selected class from the previously selected date, if any.
-      if (self.selectedDate) {
-        var prevDateCell = self.calendarElement.querySelector('#' + self.getDateId_(self.selectedDate));
+      if (previousSelectedDate) {
+        var prevDateCell =
+            self.calendarElement.querySelector('#' + self.getDateId_(previousSelectedDate));
         if (prevDateCell) {
           prevDateCell.classList.remove(SELECTED_DATE_CLASS);
         }
@@ -487,8 +506,6 @@
           dateCell.classList.add(SELECTED_DATE_CLASS);
         }
       }
-
-      self.selectedDate = date;
     });
   };
 
@@ -701,7 +718,7 @@
   CalendarCtrl.prototype.getDateId_ = function (date) {
     return [
       'md',
-      this.directiveId,
+      this.id,
       date.getFullYear(), 
       date.getMonth(), 
       date.getDate()
diff --git a/src/components/calendar/dateLocaleProvider.js b/src/components/calendar/dateLocaleProvider.js
index 4f03c1921e7..1c5e3cf7d6e 100644
--- a/src/components/calendar/dateLocaleProvider.js
+++ b/src/components/calendar/dateLocaleProvider.js
@@ -77,6 +77,7 @@
 
       window.$locale = $locale;
 
+      // TODO(jelbourn): Freeze this object.
       return {
         months: this.months || $locale.DATETIME_FORMATS.MONTH,
         shortMonths: this.shortMonths || $locale.DATETIME_FORMATS.SHORTMONTH,
diff --git a/src/components/calendar/datePicker.js b/src/components/calendar/datePicker.js
index 184866389b8..f17b1dd7d8c 100644
--- a/src/components/calendar/datePicker.js
+++ b/src/components/calendar/datePicker.js
@@ -12,10 +12,11 @@
   function datePickerDirective() {
     return {
       template:
-        '<div class="md-date-picker">' +
-          '<input> <br>' +
-          '<md-calendar ng-model="ctrl.date"></md-calendar>' +
-        '</div>',
+          '<input><button type="button" ng-click="ctrl.openCalendarPane()">📅</button>' +
+          '<div class="md-date-calendar-pane">' +
+            '<md-calendar ng-model="ctrl.date" ng-if="ctrl.isCalendarOpen"></md-calendar>' +
+          '</div>',
+      // <md-calendar ng-model="ctrl.date"></md-calendar>
       require: ['ngModel', 'mdDatePicker'],
       scope: {},
       controller: DatePickerCtrl,
@@ -23,24 +24,46 @@
       link: function(scope, element, attr, controllers) {
         var ngModelCtrl = controllers[0];
         var mdDatePickerCtrl = controllers[1];
+
         mdDatePickerCtrl.configureNgModel(ngModelCtrl);
       }
     };
   }
 
-  function DatePickerCtrl($scope, $element, $$mdDateLocale, $$mdDateUtil) {
+  /**
+   * Controller for md-date-picker.
+   *
+   * @ngInject @constructor
+   */
+  function DatePickerCtrl($scope, $element, $compile, $timeout, $mdConstant, $mdUtil,
+      $$mdDateLocale, $$mdDateUtil) {
+    /** @final */
+    this.$compile = $compile;
+
+    /** @final */
+    this.$timeout = $timeout;
+
     /** @final */
     this.dateLocale = $$mdDateLocale;
 
     /** @final */
     this.dateUtil = $$mdDateUtil;
 
+    /** @final */
+    this.$mdConstant = $mdConstant;
+
+    /* @final */
+    this.$mdUtil = $mdUtil;
+
     /** @type {!angular.NgModelController} */
     this.ngModelCtrl = null;
 
     /** @type {HTMLInputElement} */
     this.inputElement = $element[0].querySelector('input');
 
+    /** @type {HTMLElement} Floating calendar pane (instantiated lazily) */
+    this.calendarPane = $element[0].querySelector('.md-date-calendar-pane');
+
     /** @type {Date} */
     this.date = null;
 
@@ -50,7 +73,19 @@
     /** @final {!angular.Scope} */
     this.$scope = $scope;
 
+    /** @type {boolean} Whether the date-picker's calendar pane is open. */
+    this.isCalendarOpen = false;
+
+    /** Pre-bound click handler is saved so that the event listener can be removed. */
+    this.bodyClickHandler = this.handleBodyClick.bind(this);
+
     this.attachChangeListeners();
+    this.attachInterationListeners();
+
+    var self = this;
+    $scope.$on('$destroy', function() {
+      self.detachCalendarPane();
+    });
   }
 
   /**
@@ -78,6 +113,7 @@
     self.$scope.$on('md-calendar-change', function(event, date) {
       self.ngModelCtrl.$setViewValue(date);
       self.inputElement.value = self.dateLocale.formatDate(date);
+      self.closeCalendarPane();
     });
 
     // TODO(jelbourn): debounce
@@ -89,4 +125,92 @@
       }
     });
   };
+
+  /** Attach event listeners for user interaction. */
+  DatePickerCtrl.prototype.attachInterationListeners = function() {
+    var self = this;
+    var $scope = this.$scope;
+    var keyCodes = this.$mdConstant.KEY_CODE;
+
+    self.inputElement.addEventListener('keydown', function(event) {
+      $scope.$apply(function() {
+        if (event.altKey && event.keyCode == keyCodes.DOWN_ARROW) {
+          self.openCalendarPane();
+        }
+      });
+    });
+
+    self.$scope.$on('md-calendar-escape', function() {
+      self.closeCalendarPane();
+    });
+  };
+
+  /** Position and attach the floating calendar to the document. */
+  DatePickerCtrl.prototype.attachCalendarPane = function() {
+    var elementRect = this.$element[0].getBoundingClientRect();
+
+    this.calendarPane.style.left = elementRect.left + 'px';
+    this.calendarPane.style.top = elementRect.bottom + 'px';
+    document.body.appendChild(this.calendarPane);
+  };
+
+  /** Detach the floating calendar pane from the document. */
+  DatePickerCtrl.prototype.detachCalendarPane = function() {
+    // Use native DOM removal because we do not want any of the angular state of this element
+    // to be disposed.
+    this.calendarPane.parentNode.removeChild(this.calendarPane);
+  };
+
+  /** Open the floating calendar pane. */
+  DatePickerCtrl.prototype.openCalendarPane = function() {
+    if (!this.isCalendarOpen) {
+      this.isCalendarOpen = true;
+      this.attachCalendarPane();
+      // TODO(jelbourn): dispatch to tell other date pickers to close.
+      this.focusCalendar();
+
+      // Attach click listener inside of a timeout because, if this open call was triggered by a
+      // click, we don't want it to be immediately propogated up to the body and handled.
+      var self = this;
+      this.$timeout(function() {
+        document.body.addEventListener('click', self.bodyClickHandler);
+      }, 0, false);
+    }
+  };
+
+  /** Close the floating calendar pane. */
+  DatePickerCtrl.prototype.closeCalendarPane = function() {
+    this.isCalendarOpen = false;
+    this.detachCalendarPane();
+    this.inputElement.focus();
+    document.body.removeEventListener('click', this.bodyClickHandler);
+  };
+
+  /** Gets the controller instance for the calendar in the floating pane. */
+  DatePickerCtrl.prototype.getCalendarCtrl = function() {
+    return angular.element(this.calendarPane.querySelector('md-calendar')).controller('mdCalendar');
+  };
+
+  /** Focus the calendar in the floating pane. */
+  DatePickerCtrl.prototype.focusCalendar = function() {
+    // Use a timeout in order to allow the calendar to be rendered, as it is gated behind an ng-if.
+    var self = this;
+    this.$timeout(function() {
+      self.getCalendarCtrl().focus();
+    }, 0, false);
+  };
+
+  /**
+   * Handles a click on the document body when the floating calendar pane is open.
+   * Closes the floating calendar pane if the click is not inside of it.
+   * @param {MouseEvent} event
+   */
+  DatePickerCtrl.prototype.handleBodyClick = function(event) {
+    if (this.isCalendarOpen) {
+      var isInCalendar = this.$mdUtil.getClosest(event.target, 'md-calendar');
+      if (!isInCalendar) {
+        this.closeCalendarPane();
+      }
+    }
+  };
 })();
diff --git a/src/components/calendar/datePicker.scss b/src/components/calendar/datePicker.scss
new file mode 100644
index 00000000000..7f64a65ba63
--- /dev/null
+++ b/src/components/calendar/datePicker.scss
@@ -0,0 +1,9 @@
+.md-date-calendar-pane {
+  position: absolute;
+  top: 0;
+  left: 0;
+
+  // DEBUG
+  box-shadow: 0 4px 4px;
+  background: white;
+}
diff --git a/src/components/calendar/demoDatePicker/index.html b/src/components/calendar/demoDatePicker/index.html
index 6ef90d649e1..bb558cc78ca 100644
--- a/src/components/calendar/demoDatePicker/index.html
+++ b/src/components/calendar/demoDatePicker/index.html
@@ -22,7 +22,6 @@ <h2>Development tools</h2>
     <p>Here is a bunch of stuff after the calendar</p>
     <p>Here is a bunch of stuff after the calendar</p>
     <p>Here is a bunch of stuff after the calendar</p>
-    <input>
 
   </md-content>
 </div>