diff --git a/src/cdk/a11y/list-key-manager.spec.ts b/src/cdk/a11y/list-key-manager.spec.ts
index ac0e83a45e91..b6cc2d5e8d5d 100644
--- a/src/cdk/a11y/list-key-manager.spec.ts
+++ b/src/cdk/a11y/list-key-manager.spec.ts
@@ -491,6 +491,62 @@ describe('Key managers', () => {
         expect(keyManager.activeItem).toBeFalsy();
       }));
 
+      it('should start looking for matches after the active item', fakeAsync(() => {
+        itemList.items = [
+          new FakeFocusable('Bilbo'),
+          new FakeFocusable('Frodo'),
+          new FakeFocusable('Pippin'),
+          new FakeFocusable('Boromir'),
+          new FakeFocusable('Aragorn')
+        ];
+
+        keyManager.setActiveItem(1);
+        keyManager.onKeydown(createKeyboardEvent('keydown', 66, undefined, 'b'));
+        tick(debounceInterval);
+
+        expect(keyManager.activeItem).toBe(itemList.items[3]);
+      }));
+
+      it('should wrap back around if there were no matches after the active item', fakeAsync(() => {
+        itemList.items = [
+          new FakeFocusable('Bilbo'),
+          new FakeFocusable('Frodo'),
+          new FakeFocusable('Pippin'),
+          new FakeFocusable('Boromir'),
+          new FakeFocusable('Aragorn')
+        ];
+
+        keyManager.setActiveItem(3);
+        keyManager.onKeydown(createKeyboardEvent('keydown', 66, undefined, 'b'));
+        tick(debounceInterval);
+
+        expect(keyManager.activeItem).toBe(itemList.items[0]);
+      }));
+
+      it('should wrap back around if the last item is active', fakeAsync(() => {
+        keyManager.setActiveItem(2);
+        keyManager.onKeydown(createKeyboardEvent('keydown', 79, undefined, 'o'));
+        tick(debounceInterval);
+
+        expect(keyManager.activeItem).toBe(itemList.items[0]);
+      }));
+
+      it('should be able to select the first item', fakeAsync(() => {
+        keyManager.setActiveItem(-1);
+        keyManager.onKeydown(createKeyboardEvent('keydown', 79, undefined, 'o'));
+        tick(debounceInterval);
+
+        expect(keyManager.activeItem).toBe(itemList.items[0]);
+      }));
+
+      it('should not do anything if there is no match', fakeAsync(() => {
+        keyManager.setActiveItem(1);
+        keyManager.onKeydown(createKeyboardEvent('keydown', 87, undefined, 'w'));
+        tick(debounceInterval);
+
+        expect(keyManager.activeItem).toBe(itemList.items[1]);
+      }));
+
     });
 
   });
diff --git a/src/cdk/a11y/list-key-manager.ts b/src/cdk/a11y/list-key-manager.ts
index c3a3def7175e..6268194925eb 100644
--- a/src/cdk/a11y/list-key-manager.ts
+++ b/src/cdk/a11y/list-key-manager.ts
@@ -73,11 +73,14 @@ export class ListKeyManager<T extends ListKeyManagerOption> {
       .subscribe(inputString => {
         const items = this._items.toArray();
 
-        for (let i = 0; i < items.length; i++) {
-          let item = items[i];
+        // Start at 1 because we want to start searching at the item immediately
+        // following the current active item.
+        for (let i = 1; i < items.length + 1; i++) {
+          const index = (this._activeItemIndex + i) % items.length;
+          const item = items[index];
 
           if (!item.disabled && item.getLabel!().toUpperCase().trim().indexOf(inputString) === 0) {
-            this.setActiveItem(i);
+            this.setActiveItem(index);
             break;
           }
         }