diff --git a/src/demo-app/input/input-demo.html b/src/demo-app/input/input-demo.html
index 2130e211064e..c1a265b808d1 100644
--- a/src/demo-app/input/input-demo.html
+++ b/src/demo-app/input/input-demo.html
@@ -75,6 +75,31 @@ <h4>Textarea</h4>
   </md-card-content>
 </md-card>
 
+<md-card class="demo-card demo-basic">
+  <md-toolbar color="primary">Expanding textarea</md-toolbar>
+  <md-card-content>
+    <div>
+      <md-textarea
+        placeholder="Textarea with autosize"
+        class="demo-full-width"
+        autosize
+        value="Hello world. How are you?">
+      </md-textarea>
+    </div>
+
+    <h4>With `rows` explicitly set</h4>
+    <div>
+      <md-textarea
+        placeholder="Textarea with autosize"
+        class="demo-full-width"
+        autosize
+        [rows]="rows"
+        value="Hello world. How are you?">
+      </md-textarea>
+    </div>
+  </md-card-content>
+</md-card>
+
 <md-card class="demo-card">
   <md-card-title>
     Hello <md-input [(ngModel)]="name" type="text" placeholder="First name"></md-input>,
diff --git a/src/lib/input/input.html b/src/lib/input/input.html
index 5b6924d94813..10368dc3d34c 100644
--- a/src/lib/input/input.html
+++ b/src/lib/input/input.html
@@ -51,6 +51,7 @@
              [attr.rows]="rows"
              [attr.wrap]="wrap"
              [autofocus]="autofocus"
+             [mdAutosize]="autosize"
              [disabled]="disabled"
              [id]="inputId"
              [attr.maxlength]="maxlength"
diff --git a/src/lib/input/input.ts b/src/lib/input/input.ts
index 3d8b10a3c613..b11cbccc6e6a 100644
--- a/src/lib/input/input.ts
+++ b/src/lib/input/input.ts
@@ -5,6 +5,8 @@ import {
   Input,
   Directive,
   AfterContentInit,
+  OnInit,
+  HostListener,
   ContentChild,
   SimpleChange,
   ContentChildren,
@@ -87,6 +89,126 @@ export class MdHint {
   @Input() align: 'start' | 'end' = 'start';
 }
 
+
+/**
+ * Enables auto expanding behaviour for the textarea
+ * based on: https://github.com/stevepapa/angular2-autosize
+ */
+@Directive({
+  selector: 'textarea[mdAutosize]'
+})
+export class MdAutosize implements OnInit {
+  // public because of AOT
+  @HostListener('input')
+  _onChange() {
+    if (this._isActive) {
+      this._adjust();
+    }
+  }
+
+  // public because of AOT
+  @Input('mdAutosize')
+  _isActive: boolean;
+
+  // public because of AOT
+  // TODO: change to a setter, to recalculate on change
+  @Input('attr.rows')
+  _rows: string;
+
+  private _height: number;
+  private _lineHeight: number;
+
+  constructor(private _elRef: ElementRef) {}
+
+  ngOnInit() {
+    console.log(this._isActive);
+
+    if (this._isActive) {
+      this._elRef.nativeElement.style.overflow = 'hidden';
+
+      // check is rows is explicitly set, otherwise we don't need to
+      // care about it(and getting the actual line-height) at all
+      if (this._rows) {
+        this._lineHeight = this._getLineHeight();
+        this._elRef.nativeElement.style.minHeight = `${+this._rows * this._lineHeight}px`;
+      }
+
+      this._adjust();
+    }
+  }
+
+  private _adjust() {
+    // reset height(and rows if it was set by the user)
+    // to the default values to properly calculate new height
+    this._elRef.nativeElement.style.height = 'auto';
+
+    // only need to do this if user explicitly set rows
+    if (this._rows) {
+      this._elRef.nativeElement.rows = this._rows;
+    }
+
+    this._height = +this._elRef.nativeElement.scrollHeight;
+
+    // only need to do this if user explicitly set rows
+    if (this._rows) {
+      this._elRef.nativeElement.rows = this._getCalculatedRows();
+    }
+
+    this._elRef.nativeElement.style.height = `${this._height}px`;
+  }
+
+  private _getCalculatedRows() {
+    return Math.round(this._height / this._lineHeight);
+  }
+
+  private _getLineHeight(): number {
+    const el: HTMLTextAreaElement = this._elRef.nativeElement;
+
+    // get the actual computed styles for the element
+    const computedStyles = window.getComputedStyle(el);
+
+    // if line height is explicitly set(to a pixel value), use that
+    if (computedStyles.lineHeight && computedStyles.lineHeight.toLowerCase().indexOf('px') >= 0) {
+      // return stripped of the "px" and as a number
+      return parseFloat(computedStyles.lineHeight);
+    }
+
+    // create temporary element
+    const tempEl = <HTMLTextAreaElement>document.createElement(el.nodeName);
+
+    // reset styling, visually hiden the element
+    // and set its font styles to match the ones of our textarea
+    tempEl.setAttribute('rows', '1');
+    tempEl.setAttribute(
+      'style',
+      `
+        margin: 0px;
+        padding: 0px;
+        visibility: hidden;
+        opacity: 0;
+        font-family: ${computedStyles.fontFamily};
+        font-size: ${computedStyles.fontSize};
+      `
+    );
+
+    // fill in one row
+    tempEl.value = '-';
+
+    // append to parent element to correctly inherit same values
+    // as the actual textarea
+    el.parentNode.appendChild(tempEl);
+
+    // get the actual line height
+    const lineHeight = tempEl.clientHeight;
+
+    // cleanup
+    tempEl.parentNode.removeChild(tempEl);
+
+    return lineHeight;
+  }
+}
+
+
 /**
  * Component that represents a text input. It encapsulates the <input> HTMLElement and
  * improve on its behaviour, along with styling it according to the Material Design.
@@ -174,6 +296,7 @@ export class MdInput implements ControlValueAccessor, AfterContentInit, OnChange
 
   private _floatingPlaceholder: boolean = true;
   private _autofocus: boolean = false;
+  private _autosize: boolean = false;
   private _disabled: boolean = false;
   private _readonly: boolean = false;
   private _required: boolean = false;
@@ -203,6 +326,10 @@ export class MdInput implements ControlValueAccessor, AfterContentInit, OnChange
   get spellcheck(): boolean { return this._spellcheck; }
   set spellcheck(value) { this._spellcheck = coerceBooleanProperty(value); }
 
+  // textarea-specific
+  @Input()
+  get autosize(): boolean { return this._autosize; }
+  set autosize(value) { this._autosize = coerceBooleanProperty(value); }
 
   private _blurEmitter: EventEmitter<FocusEvent> = new EventEmitter<FocusEvent>();
   private _focusEmitter: EventEmitter<FocusEvent> = new EventEmitter<FocusEvent>();
@@ -360,9 +487,9 @@ export class MdInput implements ControlValueAccessor, AfterContentInit, OnChange
 
 
 @NgModule({
-  declarations: [MdPlaceholder, MdInput, MdHint],
+  declarations: [MdPlaceholder, MdInput, MdHint, MdAutosize],
   imports: [CommonModule, FormsModule],
-  exports: [MdPlaceholder, MdInput, MdHint],
+  exports: [MdPlaceholder, MdInput, MdHint, MdAutosize],
 })
 export class MdInputModule {
   static forRoot(): ModuleWithProviders {