diff --git a/src/lib/autocomplete/autocomplete-trigger.ts b/src/lib/autocomplete/autocomplete-trigger.ts
index 398829627c6..6116754b087 100644
--- a/src/lib/autocomplete/autocomplete-trigger.ts
+++ b/src/lib/autocomplete/autocomplete-trigger.ts
@@ -453,6 +453,11 @@ export class MatAutocompleteTrigger implements ControlValueAccessor, OnDestroy {
         switchMap(() => {
           this._resetActiveItem();
           this.autocomplete._setVisibility();
+
+          if (this.panelOpen) {
+            this._overlayRef!.updatePosition();
+          }
+
           return this.panelClosingActions;
         }),
         // when the first closing event occurs...
diff --git a/src/lib/autocomplete/autocomplete.spec.ts b/src/lib/autocomplete/autocomplete.spec.ts
index b8df3f0e9fb..8bd6d3521b1 100644
--- a/src/lib/autocomplete/autocomplete.spec.ts
+++ b/src/lib/autocomplete/autocomplete.spec.ts
@@ -1606,6 +1606,39 @@ describe('MatAutocomplete', () => {
       subscription!.unsubscribe();
     }));
 
+    it('should reposition the panel when the amount of options changes', fakeAsync(() => {
+      let formField = fixture.debugElement.query(By.css('.mat-form-field')).nativeElement;
+      let inputReference = formField.querySelector('.mat-form-field-flex');
+      let input = inputReference.querySelector('input');
+
+      formField.style.bottom = '100px';
+      formField.style.position = 'fixed';
+
+      typeInElement('Cali', input);
+      fixture.detectChanges();
+      tick();
+      zone.simulateZoneExit();
+      fixture.detectChanges();
+
+      const inputBottom = inputReference.getBoundingClientRect().bottom;
+      const panel = overlayContainerElement.querySelector('.mat-autocomplete-panel')!;
+      const panelTop = panel.getBoundingClientRect().top;
+
+      expect(Math.floor(inputBottom)).toBe(Math.floor(panelTop),
+          `Expected panel top to match input bottom when there is only one option.`);
+
+      typeInElement('', input);
+      fixture.detectChanges();
+      tick();
+      fixture.detectChanges();
+
+      const inputTop = inputReference.getBoundingClientRect().top;
+      const panelBottom = panel.getBoundingClientRect().bottom;
+
+      expect(Math.floor(inputTop)).toBe(Math.floor(panelBottom),
+          `Expected panel switch to the above position if the options no longer fit.`);
+    }));
+
   });
 
   describe('panel closing', () => {