diff --git a/src/components/chips/chips.spec.js b/src/components/chips/chips.spec.js
index 847dfe8ed1a..1e519f4208e 100644
--- a/src/components/chips/chips.spec.js
+++ b/src/components/chips/chips.spec.js
@@ -217,6 +217,58 @@ describe('<md-chips>', function() {
         expect(scope.appendChip).toHaveBeenCalled();
         expect(scope.appendChip.calls.mostRecent().args[0]).toBe('Apple');
       });
+
+      it('should prevent the default when backspace is pressed', inject(function($mdConstant) {
+        var element = buildChips(BASIC_CHIP_TEMPLATE);
+        var ctrl = element.controller('mdChips');
+
+        var backspaceEvent = {
+          type: 'keydown',
+          keyCode: $mdConstant.KEY_CODE.BACKSPACE,
+          which: $mdConstant.KEY_CODE.BACKSPACE,
+          preventDefault: jasmine.createSpy('preventDefault')
+        };
+
+        element.find('input').triggerHandler(backspaceEvent);
+
+        expect(backspaceEvent.preventDefault).toHaveBeenCalled();
+      }));
+
+      describe('with input text', function() {
+
+        it('should prevent the default when enter is pressed', inject(function($mdConstant) {
+          var element = buildChips(BASIC_CHIP_TEMPLATE);
+          var ctrl = element.controller('mdChips');
+
+          var enterEvent = {
+            type: 'keydown',
+            keyCode: $mdConstant.KEY_CODE.ENTER,
+            which: $mdConstant.KEY_CODE.ENTER,
+            preventDefault: jasmine.createSpy('preventDefault')
+          };
+
+          ctrl.chipBuffer = 'Test';
+          element.find('input').triggerHandler(enterEvent);
+
+          expect(enterEvent.preventDefault).toHaveBeenCalled();
+        }));
+      });
+
+      it('focuses/blurs the component when focusing/blurring the input', inject(function() {
+        var element = buildChips(BASIC_CHIP_TEMPLATE);
+        var ctrl = element.controller('mdChips');
+
+        // Focus the input and check
+        element.find('input').triggerHandler('focus');
+        expect(ctrl.inputHasFocus).toBe(true);
+        expect(element.find('md-chips-wrap').hasClass('md-focused')).toBe(true);
+
+        // Blur the input and check
+        element.find('input').triggerHandler('blur');
+        expect(ctrl.inputHasFocus).toBe(false);
+        expect(element.find('md-chips-wrap').hasClass('md-focused')).toBe(false);
+      }));
+
     });
 
     describe('custom inputs', function() {
@@ -264,6 +316,24 @@ describe('<md-chips>', function() {
             <input type="text">\
           </md-chips>';
 
+        it('focuses/blurs the component when focusing/blurring the input', inject(function($timeout) {
+          var element = buildChips(INPUT_TEMPLATE);
+          var ctrl = element.controller('mdChips');
+          $timeout.flush();
+
+          // Focus the input and check
+          element.find('input').triggerHandler('focus');
+          $timeout.flush();
+          expect(ctrl.inputHasFocus).toBe(true);
+          expect(element.find('md-chips-wrap').hasClass('md-focused')).toBe(true);
+
+          // Blur the input and check
+          element.find('input').triggerHandler('blur');
+          $timeout.flush();
+          expect(ctrl.inputHasFocus).toBe(false);
+          expect(element.find('md-chips-wrap').hasClass('md-focused')).toBe(false);
+        }));
+
         describe('using ngModel', function() {
           it('should add the ngModelCtrl.$viewValue when <enter> is pressed',
             inject(function($timeout) {
diff --git a/src/components/chips/js/chipsController.js b/src/components/chips/js/chipsController.js
index 9db0aae7d15..e43efff4da2 100644
--- a/src/components/chips/js/chipsController.js
+++ b/src/components/chips/js/chipsController.js
@@ -92,6 +92,7 @@ function MdChipsCtrl ($scope, $mdConstant, $log, $element, $timeout) {
  */
 MdChipsCtrl.prototype.inputKeydown = function(event) {
   var chipBuffer = this.getChipBuffer();
+
   switch (event.keyCode) {
     case this.$mdConstant.KEY_CODE.ENTER:
       if ((this.hasAutocomplete && this.requireMatch) || !chipBuffer) break;
@@ -101,6 +102,7 @@ MdChipsCtrl.prototype.inputKeydown = function(event) {
       break;
     case this.$mdConstant.KEY_CODE.BACKSPACE:
       if (chipBuffer) break;
+      event.preventDefault();
       event.stopPropagation();
       if (this.items.length) this.selectAndFocusChipSafe(this.items.length - 1);
       break;
@@ -373,14 +375,20 @@ MdChipsCtrl.prototype.configureUserInput = function(inputElement) {
     this.userInputNgModelCtrl = ngModelCtrl;
   }
 
-  // Bind to keydown and focus events of input
   var scope = this.$scope;
   var ctrl = this;
+
+  // Run all of the events using evalAsync because a focus may fire a blur in the same digest loop
+  var scopeApplyFn = function(event, fn) {
+    scope.$evalAsync(angular.bind(ctrl, fn, event));
+  };
+
+  // Bind to keydown and focus events of input
   inputElement
       .attr({ tabindex: 0 })
-      .on('keydown', function(event) { scope.$apply( angular.bind(ctrl, function() { ctrl.inputKeydown(event); })) })
-      .on('focus', angular.bind(ctrl, ctrl.onInputFocus))
-      .on('blur', angular.bind(ctrl, ctrl.onInputBlur));
+      .on('keydown', function(event) { scopeApplyFn(event, ctrl.inputKeydown) })
+      .on('focus', function(event) { scopeApplyFn(event, ctrl.onInputFocus) })
+      .on('blur', function(event) { scopeApplyFn(event, ctrl.onInputBlur) })
 };
 
 MdChipsCtrl.prototype.configureAutocomplete = function(ctrl) {