diff --git a/src/ng/directive/ngOptions.js b/src/ng/directive/ngOptions.js
index 8d562082f983..7265a1f6e892 100644
--- a/src/ng/directive/ngOptions.js
+++ b/src/ng/directive/ngOptions.js
@@ -420,6 +420,7 @@ var ngOptionsDirective = ['$compile', '$document', '$parse', function($compile,
       // option when the viewValue does not match any of the option values.
       for (var i = 0, children = selectElement.children(), ii = children.length; i < ii; i++) {
         if (children[i].value === '') {
+          selectCtrl.hasEmptyOption = true;
           selectCtrl.emptyOption = children.eq(i);
           break;
         }
@@ -556,9 +557,35 @@ var ngOptionsDirective = ['$compile', '$document', '$parse', function($compile,
         // compile the element since there might be bindings in it
         $compile(selectCtrl.emptyOption)(scope);
 
-        // remove the class, which is added automatically because we recompile the element and it
-        // becomes the compilation root
-        selectCtrl.emptyOption.removeClass('ng-scope');
+        if (selectCtrl.emptyOption[0].nodeType === NODE_TYPE_COMMENT) {
+          // This means the empty option has currently no actual DOM node, probably because
+          // it has been modified by a transclusion directive.
+          selectCtrl.hasEmptyOption = false;
+
+          // Redefine the registerOption function, which will catch
+          // options that are added by ngIf etc. (rendering of the node is async because of
+          // lazy transclusion)
+          selectCtrl.registerOption = function(optionScope, optionEl) {
+            if (optionEl.val() === '') {
+              selectCtrl.hasEmptyOption = true;
+              selectCtrl.emptyOption = optionEl;
+              selectCtrl.emptyOption.removeClass('ng-scope');
+              // This ensures the new empty option is selected if previously no option was selected
+              ngModelCtrl.$render();
+
+              optionEl.on('$destroy', function() {
+                selectCtrl.hasEmptyOption = false;
+                selectCtrl.emptyOption = undefined;
+              });
+            }
+          };
+
+        } else {
+          // remove the class, which is added automatically because we recompile the element and it
+          // becomes the compilation root
+          selectCtrl.emptyOption.removeClass('ng-scope');
+        }
+
       }
 
       selectElement.empty();
diff --git a/src/ng/directive/select.js b/src/ng/directive/select.js
index 34f7c8a2a853..20271e2077aa 100644
--- a/src/ng/directive/select.js
+++ b/src/ng/directive/select.js
@@ -32,6 +32,14 @@ var SelectController =
   // to create it in <select> and IE barfs otherwise.
   self.unknownOption = jqLite(window.document.createElement('option'));
 
+  // The empty option is an option with the value '' that te application developer can
+  // provide inside the select. When the model changes to a value that doesn't match an option,
+  // it is selected - so if an empty option is provided, no unknown option is generated.
+  // However, the empty option is not removed when the model matches an option. It is always selectable
+  // and indicates that a "null" selection has been made.
+  self.hasEmptyOption = false;
+  self.emptyOption = undefined;
+
   self.renderUnknownOption = function(val) {
     var unknownVal = self.generateUnknownOptionValue(val);
     self.unknownOption.val(unknownVal);
@@ -55,13 +63,6 @@ var SelectController =
     if (self.unknownOption.parent()) self.unknownOption.remove();
   };
 
-  // The empty option is an option with the value '' that te application developer can
-  // provide inside the select. When the model changes to a value that doesn't match an option,
-  // it is selected - so if an empty option is provided, no unknown option is generated.
-  // However, the empty option is not removed when the model matches an option. It is always selectable
-  // and indicates that a "null" selection has been made.
-  self.emptyOption = undefined;
-
   self.selectEmptyOption = function() {
     if (self.emptyOption) {
       $element.val('');
@@ -70,7 +71,7 @@ var SelectController =
   };
 
   self.unselectEmptyOption = function() {
-    if (self.emptyOption) {
+    if (self.hasEmptyOption) {
       self.emptyOption.removeAttr('selected');
     }
   };
@@ -132,6 +133,7 @@ var SelectController =
 
     assertNotHasOwnProperty(value, '"option value"');
     if (value === '') {
+      self.hasEmptyOption = true;
       self.emptyOption = element;
     }
     var count = optionsMap.get(value) || 0;
@@ -148,6 +150,7 @@ var SelectController =
       if (count === 1) {
         optionsMap.remove(value);
         if (value === '') {
+          self.hasEmptyOption = false;
           self.emptyOption = undefined;
         }
       } else {
diff --git a/test/ng/directive/ngOptionsSpec.js b/test/ng/directive/ngOptionsSpec.js
index c00cd507dbf7..9ea12735a835 100644
--- a/test/ng/directive/ngOptionsSpec.js
+++ b/test/ng/directive/ngOptionsSpec.js
@@ -2524,6 +2524,96 @@ describe('ngOptions', function() {
       }
     );
 
+
+    it('should select the correct option after linking when the ngIf expression is initially falsy', function() {
+      scope.values = [
+        {name:'black'},
+        {name:'white'},
+        {name:'red'}
+      ];
+      scope.selected = scope.values[2];
+
+      expect(function() {
+        createSingleSelect('<option ng-if="isBlank" value="">blank</option>');
+        scope.$apply();
+      }).not.toThrow();
+
+      expect(element.find('option')[2]).toBeMarkedAsSelected();
+      expect(linkLog).toEqual(['linkNgOptions']);
+    });
+
+
+    it('should add / remove the "selected" attribute on empty option which has an initially falsy ngIf expression', function() {
+      scope.values = [
+        {name:'black'},
+        {name:'white'},
+        {name:'red'}
+      ];
+      scope.selected = scope.values[2];
+
+      createSingleSelect('<option ng-if="isBlank" value="">blank</option>');
+      scope.$apply();
+
+      expect(element.find('option')[2]).toBeMarkedAsSelected();
+
+      scope.$apply('isBlank = true');
+      expect(element.find('option')[0].value).toBe('');
+      expect(element.find('option')[0]).not.toBeMarkedAsSelected();
+
+      scope.$apply('selected = null');
+      expect(element.find('option')[0].value).toBe('');
+      expect(element.find('option')[0]).toBeMarkedAsSelected();
+
+      scope.selected = scope.values[1];
+      scope.$apply();
+      expect(element.find('option')[0].value).toBe('');
+      expect(element.find('option')[0]).not.toBeMarkedAsSelected();
+      expect(element.find('option')[2]).toBeMarkedAsSelected();
+    });
+
+
+    it('should add / remove the "selected" attribute on empty option which has an initially truthy ngIf expression when no option is selected', function() {
+      scope.values = [
+        {name:'black'},
+        {name:'white'},
+        {name:'red'}
+      ];
+      scope.isBlank = true;
+
+      createSingleSelect('<option ng-if="isBlank" value="">blank</option>');
+      scope.$apply();
+
+      expect(element.find('option')[0].value).toBe('');
+      expect(element.find('option')[0]).toBeMarkedAsSelected();
+
+      scope.selected = scope.values[2];
+      scope.$apply();
+      expect(element.find('option')[0]).not.toBeMarkedAsSelected();
+      expect(element.find('option')[3]).toBeMarkedAsSelected();
+    });
+
+
+    it('should add the "selected" attribute on empty option which has an initially falsy ngIf expression when no option is selected', function() {
+      scope.values = [
+        {name:'black'},
+        {name:'white'},
+        {name:'red'}
+      ];
+
+      createSingleSelect('<option ng-if="isBlank" value="">blank</option>');
+      scope.$apply();
+
+      expect(element.find('option')[0]).not.toBeMarkedAsSelected();
+
+      scope.isBlank = true;
+      scope.$apply();
+
+      expect(element.find('option')[0].value).toBe('');
+      expect(element.find('option')[0]).toBeMarkedAsSelected();
+      expect(element.find('option')[1]).not.toBeMarkedAsSelected();
+    });
+
+
     it('should not throw when a directive compiles the blank option before ngOptions is linked', function() {
       expect(function() {
         createSelect({