diff --git a/src/lib/autocomplete/autocomplete-trigger.ts b/src/lib/autocomplete/autocomplete-trigger.ts
index cdc00c36aeba..7710bd335033 100644
--- a/src/lib/autocomplete/autocomplete-trigger.ts
+++ b/src/lib/autocomplete/autocomplete-trigger.ts
@@ -409,9 +409,18 @@ export class MdAutocompleteTrigger implements ControlValueAccessor, OnDestroy {
 
   private _setTriggerValue(value: any): void {
     const toDisplay = this.autocomplete.displayWith ? this.autocomplete.displayWith(value) : value;
+
     // Simply falling back to an empty string if the display value is falsy does not work properly.
     // The display value can also be the number zero and shouldn't fall back to an empty string.
-    this._element.nativeElement.value = toDisplay != null ? toDisplay : '';
+    const inputValue = toDisplay != null ? toDisplay : '';
+
+    // If it's used in a Material container, we should set it through
+    // the property so it can go through the change detection.
+    if (this._inputContainer) {
+      this._inputContainer._mdInputChild.value = inputValue;
+    } else {
+      this._element.nativeElement.value = inputValue;
+    }
   }
 
    /**
diff --git a/src/lib/autocomplete/autocomplete.spec.ts b/src/lib/autocomplete/autocomplete.spec.ts
index d043c13ee17f..495af40ba1a9 100644
--- a/src/lib/autocomplete/autocomplete.spec.ts
+++ b/src/lib/autocomplete/autocomplete.spec.ts
@@ -54,7 +54,8 @@ describe('MdAutocomplete', () => {
         AutocompleteWithNumbers,
         AutocompleteWithOnPushDelay,
         AutocompleteWithNativeInput,
-        AutocompleteWithoutPanel
+        AutocompleteWithoutPanel,
+        AutocompleteWithFormsAndNonfloatingPlaceholder
       ],
       providers: [
         {provide: OverlayContainer, useFactory: () => {
@@ -1314,6 +1315,21 @@ describe('MdAutocomplete', () => {
       }).toThrow(getMdAutocompleteMissingPanelError());
     }));
 
+    it('should hide the placeholder with a preselected form control value ' +
+      'and a disabled floating placeholder', fakeAsync(() => {
+        const fixture = TestBed.createComponent(AutocompleteWithFormsAndNonfloatingPlaceholder);
+
+        fixture.detectChanges();
+        tick();
+        fixture.detectChanges();
+
+        const input = fixture.nativeElement.querySelector('input');
+        const placeholder = fixture.nativeElement.querySelector('.mat-input-placeholder');
+
+        expect(input.value).toBe('California');
+        expect(placeholder.classList).not.toContain('mat-empty');
+      }));
+
   });
 
   it('should have correct width when opened', () => {
@@ -1501,7 +1517,6 @@ class AutocompleteWithoutForms {
   onInput(value: any) {
     this.filteredStates = this.states.filter(s => new RegExp(value, 'gi').test(s));
   }
-
 }
 
 
@@ -1531,7 +1546,6 @@ class AutocompleteWithNgModel {
   onInput(value: any) {
     this.filteredStates = this.states.filter(s => new RegExp(value, 'gi').test(s));
   }
-
 }
 
 @Component({
@@ -1611,3 +1625,19 @@ class AutocompleteWithNativeInput {
 class AutocompleteWithoutPanel {
   @ViewChild(MdAutocompleteTrigger) trigger: MdAutocompleteTrigger;
 }
+
+
+@Component({
+  template: `
+    <md-input-container floatPlaceholder="never">
+      <input placeholder="State" mdInput [mdAutocomplete]="auto" [formControl]="formControl">
+    </md-input-container>
+
+    <md-autocomplete #auto="mdAutocomplete">
+      <md-option value="California">California</md-option>
+    </md-autocomplete>
+  `
+})
+class AutocompleteWithFormsAndNonfloatingPlaceholder {
+  formControl = new FormControl('California');
+}
diff --git a/src/lib/input/input-container.spec.ts b/src/lib/input/input-container.spec.ts
index cb31144b2670..58cd7889fbc4 100644
--- a/src/lib/input/input-container.spec.ts
+++ b/src/lib/input/input-container.spec.ts
@@ -566,6 +566,25 @@ describe('MdInputContainer without forms', function () {
     expect(labelEl.classList).not.toContain('mat-float');
   });
 
+  it('should be able to toggle the floating placeholder programmatically', () => {
+    const fixture = TestBed.createComponent(MdInputContainerWithId);
+
+    fixture.detectChanges();
+
+    const inputContainer = fixture.debugElement.query(By.directive(MdInputContainer));
+    const containerInstance = inputContainer.componentInstance as MdInputContainer;
+    const placeholder = inputContainer.nativeElement.querySelector('.mat-input-placeholder');
+
+    expect(containerInstance.floatPlaceholder).toBe('auto');
+    expect(placeholder.classList).toContain('mat-empty', 'Expected input to be considered empty.');
+
+    containerInstance.floatPlaceholder = 'always';
+    fixture.detectChanges();
+
+    expect(placeholder.classList)
+        .not.toContain('mat-empty', 'Expected input to be considered not empty.');
+  });
+
   it('should not have prefix and suffix elements when none are specified', () => {
     let fixture = TestBed.createComponent(MdInputContainerWithId);
     fixture.detectChanges();
diff --git a/src/lib/input/input-container.ts b/src/lib/input/input-container.ts
index 3227965b24b2..4d065e68e381 100644
--- a/src/lib/input/input-container.ts
+++ b/src/lib/input/input-container.ts
@@ -208,7 +208,12 @@ export class MdInputDirective implements OnChanges, OnDestroy, DoCheck {
 
   /** The input element's value. */
   get value() { return this._elementRef.nativeElement.value; }
-  set value(value: string) { this._elementRef.nativeElement.value = value; }
+  set value(value: string) {
+    if (value !== this.value) {
+      this._elementRef.nativeElement.value = value;
+      this._stateChanges.next();
+    }
+  }
 
   /** Whether the input is empty. */
   get empty() {
@@ -429,7 +434,10 @@ export class MdInputContainer implements AfterViewInit, AfterContentInit, AfterC
   @Input()
   get floatPlaceholder() { return this._floatPlaceholder; }
   set floatPlaceholder(value: FloatPlaceholderType) {
-    this._floatPlaceholder = value || this._placeholderOptions.float || 'auto';
+    if (value !== this._floatPlaceholder) {
+      this._floatPlaceholder = value || this._placeholderOptions.float || 'auto';
+      this._changeDetectorRef.markForCheck();
+    }
   }
   private _floatPlaceholder: FloatPlaceholderType;