diff --git a/src/components/autocomplete/js/autocompleteController.js b/src/components/autocomplete/js/autocompleteController.js
index 53f0526fadf..95f0a5f9b8d 100644
--- a/src/components/autocomplete/js/autocompleteController.js
+++ b/src/components/autocomplete/js/autocompleteController.js
@@ -589,7 +589,7 @@ function MdAutocompleteCtrl ($scope, $element, $mdUtil, $mdConstant, $mdTheming,
   }
 
   function notFoundVisible () {
-    return !ctrl.matches.length && !ctrl.loading && ctrl.scope.searchText;
+    return !ctrl.matches.length && !ctrl.loading && ctrl.scope.searchText && hasFocus && !ctrl.scope.selectedItem;
   }
 
   /**