diff --git a/src/components/panel/panel.js b/src/components/panel/panel.js
new file mode 100644
index 00000000000..56012d31286
--- /dev/null
+++ b/src/components/panel/panel.js
@@ -0,0 +1,368 @@
+/**
+ * @ngdoc module
+ * @name material.components.panel
+ */
+angular
+    .module('material.components.panel', [
+      'material.core'
+    ])
+    .service('$mdPanel', MdPanelService);
+
+
+/***************************************************************************************
+ *                              PUBLIC DOCUMENTATION                                   *
+ ***************************************************************************************/
+
+/**
+ * @ngdoc service
+ * @name $mdPanel
+ * @module material.components.panel
+ *
+ * @description
+ * `$mdPanel` is a robust, low-level service for creating floating panels on
+ * the screen. It can be used to implement tooltips, dialogs, pop-ups, etc.
+ *
+ * @usage
+ * <hljs lang="js">
+ * (function(angular, undefined) {
+ *   ‘use strict’;
+ *
+ *   angular
+ *       .module('demoApp', ['ngMaterial'])
+ *       .controller('DemoDialogController', DialogController);
+ *
+ *   var panelRef;
+ *
+ *   function showPanel($event) {
+ *     var panelPosition = $mdPanelPosition
+ *         .absolute()
+ *         .top('50%')
+ *         .left('50%');
+ *
+ *     var panelAnimation = $mdPanelAnimation
+ *         .targetEvent($event)
+ *         .defaultAnimation('md-panel-animate-fly')
+ *         .closeTo('.show-button');
+ *
+ *     var config = {
+ *       attachTo: angular.element(document.body),
+ *       controller: DialogController,
+ *       controllerAs: 'ctrl',
+ *       position: panelPosition,
+ *       animation: panelAnimation,
+ *       targetEvent: $event,
+ *       template: 'dialog-template.html',
+ *       clickOutsideToClose: true,
+ *       escapeToClose: true,
+ *       focusOnOpen: true
+ *     }
+ *     panelRef = $mdPanel.create(config);
+ *     panelRef.open()
+ *         .finally(function() {
+ *           panelRef = undefined;
+ *         });
+ *   }
+ *
+ *   function DialogController($mdPanelRef, toppings) {
+ *     var toppings;
+ *
+ *     function closeDialog() {
+ *       $mdPanelRef.close();
+ *     }
+ *   }
+ * })(angular);
+ * </hljs>
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanel#create
+ * @description
+ * Creates a panel with the specified options.
+ *
+ * @param opt_config {Object=} Specific configuration object that may contain the
+ * following properties:
+ *
+ *   N/A
+ *
+ * TODO(ErinCoughlan): Add the following config options.
+ *   - `groupName` - `{string=}`: Name of panel groups. This group name is used for
+ *     configuring the number of open panels and identifying specific behaviors for
+ *     groups. For instance, all tooltips will be identified using the same groupName.
+ *   - `template` - `{string=}`: HTML template to show in the dialog. This **must** be
+ *     trusted HTML with respect to Angular’s
+ *     [$sce service](https://docs.angularjs.org/api/ng/service/$sce).
+ *   - `templateUrl` - `{string=}`: The URL that will be used as the content of
+ *     the panel.
+ *   - `controller` - `{(function|string)=}`: The controller to associate with the
+ *     panel. The controller can inject a reference to the returned
+ *     panelRef, which allows the panel to be closed, hidden, and shown.
+ *     Any fields passed in through locals or resolve will be bound to the controller.
+ *   - `controllerAs` - `{string=}`: An alias to assign the controller to on the
+ *     scope.
+ *   - `locals` - `{Object=}`: An object containing key/value pairs. The keys will be
+ *     used as names of values to inject into the controller. For example,
+ *     `locals: {three: 3}` would inject `three` into the controller, with the value
+ *     3.
+ *   - `resolve` - `{Object=}`: Similar to locals, except it takes promises as
+ *     values. The panel will not open until all of the promises resolve.
+ *   - `attachTo` - `{Element=}`: The element to attach the panel to. Defaults to
+ *     appending to the root element of the application.
+ *   - `position` - `{$mdPanelPosition=}`: An $mdPanelPosition object that specifies
+ *     the alignment of the panel. For more information, see $mdPanelPosition.
+ *   - `animation` - `{$mdPanelAnimation=}`: An $mdPanelAnimation object that specifies
+ *     the animation of the panel. For more information, see $mdPanelAnimation.
+ *   - `hasBackdrop` - `{boolean=}`: Whether there should be an opaque backdrop behind
+ *     the panel. Defaults to false.
+ *   - `escapeToClose` - `{boolean=}`: Whether the user can press escape to close the
+ *     panel. Defaults to false.
+ *   - `clickOutsideToClose` - `{boolean=}`: Whether the user can click outside the
+ *     panel to close it. Defaults to false.
+ *   - `disableParentScroll` - `{boolean=}`: Whether the user can scroll the page
+ *     behind the panel. Defaults to false.
+ *   - `fullScreen` - `{boolean=}`: Whether the panel should be full screen. Applies
+ *     the class `.md-panel-fullscreen` to the panel on open. Defaults to false.
+ *   - `trapFocus` - `{boolean=}`: Whether focus should be trapped within the panel.
+ *     If `trapFocus` is true, the user will not be able to interact with the rest of
+ *     the page until the panel is dismissed. Defaults to false.
+ *   - `focusOnOpen` - `{boolean=}`: An option to override focus behavior on open.
+ *     Only disable if focusing some other way, as focus management is required for
+ *     panels to be accessible. Defaults to true.
+ *
+ * @returns {$mdPanelRef} panelRef
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanel#setGroupMaxOpen
+ * @description
+ * Sets the maximum number of panels in a group that can be opened at a given time.
+ *
+ * @param groupName {string} The name of the group to configure.
+ * @param maxOpen {number} The max number of panels that can be opened.
+ */
+
+
+/***************************************************************************************
+ *                                   $mdPanelRef                                       *
+ ***************************************************************************************/
+
+
+/**
+ * @ngdoc object
+ * @name $mdPanelRef
+ * @description
+ * A reference to a created panel. This reference contains a unique id for the panel,
+ * along with the following properties:
+ *   - `id` - `{string}: The unique id for the panel. This id is used to track when
+ *     a panel was interacted with.
+ *   - `config` - `{Object=}`: The entire config object that was used in create.
+ *
+ * TODO(ErinCoughlan): Add the following properties.
+ *   - `isOpen` - `{boolean}`: Whether the panel is attached to the DOM. Visibility
+ *     to the user does not factor into isOpen.
+ *   - `isHidden` - `{boolean}`: Whether the panel is attached to the DOM, but not
+ *     visible to the user.
+ *   - `onDomAdded` - `{function=}`: Callback function used to announce when the
+ *     panel is added to the DOM.
+ *   - `onOpenComplete` - `{function=}`: Callback function used to announce when the
+ *     open() action is finished.
+ *   - `onRemoving` - `{function=}`: Callback function used to announce the
+ *     close/hide() action is starting. This allows developers to run custom
+ *     animations in parallel the close animations.
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelRef#open
+ * @description
+ * If the panel is not visible, opens an already created and configured panel.
+ *
+ * @returns {angular.$q.Promise} A promise that is resolved when the panel is closed.
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelRef#close
+ * @description
+ * If the panel is visible, closes the panel, resolving the promise that is returned
+ * from `$mdPanelRef#open`. This method destroys the reference to the panel. In order
+ * to open the panel again, a new one must be created.
+ */
+
+
+/***************************************************************************************
+ *                                 $mdPanelPosition                                    *
+ ***************************************************************************************/
+
+
+/**
+ * @ngdoc object
+ * @name $mdPanelPosition
+ * @description
+ * Object for configuring the position of the panel. Examples:
+ *
+ * Centering the panel:
+ * `$mdPanelPosition.absolute().top(‘50%’).left(‘50%’);`
+ *
+ * Overlapping the panel with an element:
+ * `$mdPanelPosition.relativeTo(someElement).top(‘0’).left(‘0’);`
+ *
+ * Aligning the panel with the bottom of an element:
+ * `$mdPanelPosition.relativeTo(someElement);`
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#absolute
+ * @description
+ * Positions the panel absolutely relative to the parent element. If the parent is
+ * document.body, this is equivalent to positioning the panel absolutely within the
+ * viewport.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#relativeTo
+ * @description
+ * Positions the panel relative to a specific element.
+ * @param {!angular.JQLite} element Element to position the panel with respect to.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#top
+ * @description
+ * Sets the value of `top` for the panel.
+ * @param {string} top Value of `top`.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#bottom
+ * @description
+ * Sets the value of `bottom` for the panel.
+ * @param {string} top Value of `bottom`.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#left
+ * @description
+ * Sets the value of `left` for the panel.
+ * @param {string} top Value of `left`.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#right
+ * @description
+ * Sets the value of `right` for the panel.
+ * @param {string} top Value of `right`.
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#offsetX
+ * @description
+ * Sets the value of the offset in the x-direction.
+ * @param {string} offsetX
+ * @returns {$mdPanelPosition}
+ */
+
+/**
+ * @ngdoc method
+ * @name $mdPanelPosition#offsetY
+ * @description
+ * Sets the value of the offset in the y-direction.
+ * @param {string} offsetY
+ * @returns {$mdPanelPosition}
+ */
+
+
+/***************************************************************************************
+ *                                   IMPLEMENTATION                                    *
+ ***************************************************************************************/
+
+
+/**
+ * A service that is used for controlling/displaying panels on the screen.
+ * @param {!angular.JQLite} $rootElement
+ * @param {!angular.$injector} $injector
+ * @final @constructor @ngInject
+ */
+function MdPanelService($rootElement, $injector) {
+  // Default config options for the panel.
+  this.defaultConfigOptions_ = {
+    attachTo: $rootElement
+  };
+
+  this.config_ = this.defaultConfigOptions_;
+  this.$injector_ = $injector;
+}
+
+
+/**
+ * Creates a panel with the specified options.
+ * @param {!Object=} opt_config Configuration object for the panel.
+ * @returns {!$mdPanelRef}
+ */
+MdPanelService.prototype.create = function(opt_config) {
+  var configSettings = opt_config || {};
+  angular.extend(this.config_, configSettings);
+
+  return new MdPanelRef(this.$injector_, this.config_);
+};
+
+
+/**
+ * A reference to a created panel. This reference contains a unique id for the panel,
+ * along with properties/functions used to control the panel.
+ *
+ * @param {!angular.$injector} $injector
+ * @param {!Object} config
+ * @final @constructor
+ */
+function MdPanelRef($injector, config) {
+  // Injected variables.
+  this.$mdUtil_ = $injector.get('$mdUtil');
+  this.$q_ = $injector.get('$q');
+
+  // Public variables.
+  this.config = config;
+  this.id = 'panel_' + this.$mdUtil_.nextUid();
+  this.isOpen = false;
+
+  // Private variables.
+  this.openPromise_;
+}
+
+
+/**
+ * Opens an already created and configured panel. If the panel is already visible,
+ * does nothing.
+ *
+ * @returns {!angular.$q.Promise} A promise that is resolved when the panel is closed.
+ */
+MdPanelRef.prototype.open = function() {
+  this.openPromise_ = this.$q_.defer();
+  this.isOpen = true;
+  return this.openPromise_.promise;
+};
+
+
+/**
+ * Closes the panel.
+ */
+MdPanelRef.prototype.close = function() {
+  if (this.isOpen) {
+    this.isOpen = false;
+    this.openPromise_.resolve(true);
+  }
+};
diff --git a/src/components/panel/panel.spec.js b/src/components/panel/panel.spec.js
new file mode 100644
index 00000000000..e2571888993
--- /dev/null
+++ b/src/components/panel/panel.spec.js
@@ -0,0 +1,44 @@
+describe('$mdPanel', function() {
+  var $mdPanel, $rootScope;
+
+  /**
+   * @param {!angular.$injector} $injector
+   * @ngInject
+   */
+  var injectLocals = function($injector) {
+    $mdPanel = $injector.get('$mdPanel');
+    $rootScope = $injector.get('$rootScope');
+  };
+
+  beforeEach(function() {
+    module('material.components.panel', 'ngSanitize');
+
+    inject(injectLocals);
+  });
+
+  it('creates a basic panel', function() {
+    var resolved = false;
+    var config = {attachTo: 'hello'};
+
+    var panelRef = $mdPanel.create(config);
+
+    expect(panelRef.id).toBeDefined();
+    expect(panelRef.open).toBeDefined();
+    expect(panelRef.close).toBeDefined();
+    expect(panelRef.config).toEqual(config);
+    expect(panelRef.isOpen).toEqual(false);
+
+    panelRef.open().then(function() {
+      resolved = true;
+    });
+    $rootScope.$apply();
+
+    expect(panelRef.isOpen).toEqual(true);
+
+    panelRef.close();
+    $rootScope.$apply();
+
+    expect(resolved).toBe(true);
+    expect(panelRef.isOpen).toEqual(false);
+  });
+});