diff --git a/src/lib/datepicker/datepicker.spec.ts b/src/lib/datepicker/datepicker.spec.ts
index dd2b266b528..308d7a3f0da 100644
--- a/src/lib/datepicker/datepicker.spec.ts
+++ b/src/lib/datepicker/datepicker.spec.ts
@@ -1,14 +1,19 @@
-import {async, ComponentFixture, TestBed} from '@angular/core/testing';
-import {MdDatepickerModule} from './index';
 import {Component, ViewChild} from '@angular/core';
-import {MdDatepicker} from './datepicker';
-import {MdDatepickerInput} from './datepicker-input';
+import {async, ComponentFixture, TestBed} from '@angular/core/testing';
+import {NoopAnimationsModule} from '@angular/platform-browser/animations';
 import {FormControl, FormsModule, ReactiveFormsModule} from '@angular/forms';
 import {By} from '@angular/platform-browser';
-import {dispatchFakeEvent, dispatchMouseEvent} from '../core/testing/dispatch-events';
+import {MdDatepickerModule} from './index';
+import {MdDatepicker} from './datepicker';
+import {MdDatepickerInput} from './datepicker-input';
 import {MdInputModule} from '../input/index';
-import {NoopAnimationsModule} from '@angular/platform-browser/animations';
 import {MdNativeDateModule, DateAdapter, NativeDateAdapter} from '../core/datetime/index';
+import {ESCAPE} from '../core';
+import {
+  dispatchFakeEvent,
+  dispatchMouseEvent,
+  dispatchKeyboardEvent,
+} from '../core/testing/dispatch-events';
 
 
 // When constructing a Date, the month is zero-based. This can be confusing, since people are
@@ -107,6 +112,23 @@ describe('MdDatepicker', () => {
         });
       }));
 
+      it('should close the popup when pressing ESCAPE', () => {
+        testComponent.datepicker.open();
+        fixture.detectChanges();
+
+        let content = document.querySelector('.cdk-overlay-pane md-datepicker-content');
+        expect(content).toBeTruthy('Expected datepicker to be open.');
+
+        let keyboadEvent = dispatchKeyboardEvent(content, 'keydown', ESCAPE);
+        fixture.detectChanges();
+
+        content = document.querySelector('.cdk-overlay-pane md-datepicker-content');
+
+        expect(content).toBeFalsy('Expected datepicker to be closed.');
+        expect(keyboadEvent.defaultPrevented)
+            .toBe(true, 'Expected default ESCAPE action to be prevented.');
+      });
+
       it('close should close dialog', async(() => {
         testComponent.touch = true;
         fixture.detectChanges();
@@ -425,6 +447,30 @@ describe('MdDatepicker', () => {
         let toggle = fixture.debugElement.query(By.css('button')).nativeElement;
         expect(toggle.getAttribute('type')).toBe('button');
       });
+
+      it('should restore focus to the toggle after the calendar is closed', () => {
+        let toggle = fixture.debugElement.query(By.css('button')).nativeElement;
+
+        fixture.componentInstance.touchUI = false;
+        fixture.detectChanges();
+
+        toggle.focus();
+        expect(document.activeElement).toBe(toggle, 'Expected toggle to be focused.');
+
+        fixture.componentInstance.datepicker.open();
+        fixture.detectChanges();
+
+        let pane = document.querySelector('.cdk-overlay-pane');
+
+        expect(pane).toBeTruthy('Expected calendar to be open.');
+        expect(pane.contains(document.activeElement))
+            .toBe(true, 'Expected focus to be inside the calendar.');
+
+        fixture.componentInstance.datepicker.close();
+        fixture.detectChanges();
+
+        expect(document.activeElement).toBe(toggle, 'Expected focus to be restored to toggle.');
+      });
     });
 
     describe('datepicker inside input-container', () => {
@@ -767,11 +813,12 @@ class DatepickerWithFormControl {
   template: `
     <input [mdDatepicker]="d">
     <button [mdDatepickerToggle]="d"></button>
-    <md-datepicker #d [touchUi]="true"></md-datepicker>
+    <md-datepicker #d [touchUi]="touchUI"></md-datepicker>
   `,
 })
 class DatepickerWithToggle {
   @ViewChild('d') datepicker: MdDatepicker<Date>;
+  touchUI = true;
 }
 
 
diff --git a/src/lib/datepicker/datepicker.ts b/src/lib/datepicker/datepicker.ts
index 76f35a73a37..ce0787ab5ad 100644
--- a/src/lib/datepicker/datepicker.ts
+++ b/src/lib/datepicker/datepicker.ts
@@ -20,7 +20,9 @@ import {
   ViewContainerRef,
   ViewEncapsulation,
   NgZone,
+  Inject,
 } from '@angular/core';
+import {DOCUMENT} from '@angular/platform-browser';
 import {Overlay} from '../core/overlay/overlay';
 import {OverlayRef} from '../core/overlay/overlay-ref';
 import {ComponentPortal} from '../core/portal/portal';
@@ -77,16 +79,10 @@ export class MdDatepickerContent<D> implements AfterContentInit {
    * @param event The event.
    */
   _handleKeydown(event: KeyboardEvent): void {
-    switch (event.keyCode) {
-      case ESCAPE:
-        this.datepicker.close();
-        break;
-      default:
-        // Return so that we don't preventDefault on keys that are not explicitly handled.
-        return;
+    if (event.keyCode === ESCAPE) {
+      this.datepicker.close();
+      event.preventDefault();
     }
-
-    event.preventDefault();
   }
 }
 
@@ -158,6 +154,9 @@ export class MdDatepicker<D> implements OnDestroy {
   /** The input element this datepicker is associated with. */
   private _datepickerInput: MdDatepickerInput<D>;
 
+  /** The element that was focused before the datepicker was opened. */
+  private _focusedElementBeforeOpen: HTMLElement;
+
   private _inputSubscription: Subscription;
 
   constructor(private _dialog: MdDialog,
@@ -165,11 +164,12 @@ export class MdDatepicker<D> implements OnDestroy {
               private _ngZone: NgZone,
               private _viewContainerRef: ViewContainerRef,
               @Optional() private _dateAdapter: DateAdapter<D>,
-              @Optional() private _dir: Dir) {
+              @Optional() private _dir: Dir,
+              @Optional() @Inject(DOCUMENT) private _document: any) {
+
     if (!this._dateAdapter) {
       throw createMissingDateImplError('DateAdapter');
     }
-
   }
 
   ngOnDestroy() {
@@ -213,6 +213,9 @@ export class MdDatepicker<D> implements OnDestroy {
     if (!this._datepickerInput) {
       throw Error('Attempted to open an MdDatepicker with no associated input.');
     }
+    if (this._document) {
+      this._focusedElementBeforeOpen = this._document.activeElement;
+    }
 
     this.touchUi ? this._openAsDialog() : this._openAsPopup();
     this.opened = true;
@@ -233,6 +236,11 @@ export class MdDatepicker<D> implements OnDestroy {
     if (this._calendarPortal && this._calendarPortal.isAttached) {
       this._calendarPortal.detach();
     }
+    if (this._focusedElementBeforeOpen && 'focus' in this._focusedElementBeforeOpen) {
+      this._focusedElementBeforeOpen.focus();
+      this._focusedElementBeforeOpen = null;
+    }
+
     this.opened = false;
   }