diff --git a/src/cdk/a11y/key-manager/list-key-manager.spec.ts b/src/cdk/a11y/key-manager/list-key-manager.spec.ts
index a937d187d21..4bbc026b87a 100644
--- a/src/cdk/a11y/key-manager/list-key-manager.spec.ts
+++ b/src/cdk/a11y/key-manager/list-key-manager.spec.ts
@@ -93,6 +93,15 @@ describe('Key managers', () => {
       expect(keyManager.activeItem!.getLabel()).toBe('one');
     });
 
+    it('should start off the activeItem as null', () => {
+      expect(new ListKeyManager([]).activeItem).toBeNull();
+    });
+
+    it('should set the activeItem to null if an invalid index is passed in', () => {
+      keyManager.setActiveItem(1337);
+      expect(keyManager.activeItem).toBeNull();
+    });
+
     describe('Key events', () => {
 
       it('should emit tabOut when the tab key is pressed', () => {
diff --git a/src/cdk/a11y/key-manager/list-key-manager.ts b/src/cdk/a11y/key-manager/list-key-manager.ts
index 98e2ad4348f..9b6bf2d04dc 100644
--- a/src/cdk/a11y/key-manager/list-key-manager.ts
+++ b/src/cdk/a11y/key-manager/list-key-manager.ts
@@ -40,7 +40,7 @@ export type ListKeyManagerModifierKey = 'altKey' | 'ctrlKey' | 'metaKey' | 'shif
  */
 export class ListKeyManager<T extends ListKeyManagerOption> {
   private _activeItemIndex = -1;
-  private _activeItem: T;
+  private _activeItem: T | null = null;
   private _wrap = false;
   private _letterKeyStream = new Subject<string>();
   private _typeaheadSubscription = Subscription.EMPTY;
@@ -310,9 +310,11 @@ export class ListKeyManager<T extends ListKeyManagerOption> {
   updateActiveItem(item: any): void {
     const itemArray = this._getItemsArray();
     const index = typeof item === 'number' ? item : itemArray.indexOf(item);
+    const activeItem = itemArray[index];
 
+    // Explicitly check for `null` and `undefined` because other falsy values are valid.
+    this._activeItem = activeItem == null ? null : activeItem;
     this._activeItemIndex = index;
-    this._activeItem = itemArray[index];
   }
 
   /**