diff --git a/Gruntfile.js b/Gruntfile.js
index 1a8abdaa2..264ab80e3 100644
--- a/Gruntfile.js
+++ b/Gruntfile.js
@@ -11,7 +11,8 @@ module.exports = function(grunt) {
   grunt.initConfig({
     karma: {
       options: {
-        configFile: 'karma.conf.js'
+        configFile: 'karma.conf.js',
+        colors: grunt.option('color')
       },
       watch: {
         // Does not work under Windows?
diff --git a/dist/select.js b/dist/select.js
index 830bbf838..dffdf2ebc 100644
--- a/dist/select.js
+++ b/dist/select.js
@@ -114,7 +114,8 @@ angular.module('ui.select', [])
   ctrl.open = false;
   ctrl.disabled = undefined; // Initialized inside uiSelect directive link function
   ctrl.resetSearchInput = undefined; // Initialized inside uiSelect directive link function
-  ctrl.refreshDelay = undefined; // Initialized inside choices directive link function
+  ctrl.refreshDelay = undefined; // Initialized inside uiSelectChoices directive link function
+  ctrl.tagging = {isActivated: false, fct: undefined};
 
   var _searchInput = $element.querySelectorAll('input.ui-select-search');
   if (_searchInput.length !== 1) {
@@ -174,21 +175,24 @@ angular.module('ui.select', [])
   ctrl.refresh = function(refreshAttr) {
     if (refreshAttr !== undefined) {
 
-      // Throttle / debounce
-      //
+      // Debounce
       // See https://github.com/angular-ui/bootstrap/blob/0.10.0/src/typeahead/typeahead.js#L155
       // FYI AngularStrap typeahead does not have debouncing: https://github.com/mgcrea/angular-strap/blob/v2.0.0-rc.4/src/typeahead/typeahead.js#L177
       if (_refreshDelayPromise) {
         $timeout.cancel(_refreshDelayPromise);
       }
       _refreshDelayPromise = $timeout(function() {
-        $scope.$apply(refreshAttr);
+        $scope.$eval(refreshAttr);
       }, ctrl.refreshDelay);
     }
   };
 
   // When the user clicks on an item inside the dropdown
   ctrl.select = function(item) {
+    if(ctrl.tagging.isActivated && !item && ctrl.search.length > 0) {
+      // create new item on the fly
+      item = ctrl.tagging.fct !== undefined ? ctrl.tagging.fct(ctrl.search) : ctrl.search;
+    }
     ctrl.selected = item;
     ctrl.close();
     // Using a watch instead of $scope.ngModel.$setViewValue(item)
@@ -217,7 +221,7 @@ angular.module('ui.select', [])
         if (ctrl.activeIndex < ctrl.items.length - 1) { ctrl.activeIndex++; }
         break;
       case Key.Up:
-        if (ctrl.activeIndex > 0) { ctrl.activeIndex--; }
+        if (ctrl.activeIndex > 0 || (ctrl.search.length === 0 && ctrl.tagging.isActivated)) { ctrl.activeIndex--; }
         break;
       case Key.Tab:
       case Key.Enter:
@@ -233,11 +237,12 @@ angular.module('ui.select', [])
   }
 
   // Bind to keyboard shortcuts
-  // Cannot specify a namespace: not supported by jqLite
   _searchInput.on('keydown', function(e) {
     // Keyboard shortcuts are all about the items,
     // does not make sense (and will crash) if ctrl.items is empty
-    if (ctrl.items.length > 0) {
+    // unless we are in tagging mode, in that case we juste need to
+    // have a search term
+    if ((ctrl.items.length > 0 && !ctrl.tagging.isActivated) || (ctrl.search.length > 0 && ctrl.tagging.isActivated)) {
       var key = e.which;
 
       $scope.$apply(function() {
@@ -282,8 +287,8 @@ angular.module('ui.select', [])
 }])
 
 .directive('uiSelect',
-  ['$document', 'uiSelectConfig',
-  function($document, uiSelectConfig) {
+  ['$document', 'uiSelectConfig', 'uiSelectMinErr',
+  function($document, uiSelectConfig, uiSelectMinErr) {
 
   return {
     restrict: 'EA',
@@ -314,6 +319,19 @@ angular.module('ui.select', [])
         $select.resetSearchInput = resetSearchInput !== undefined ? resetSearchInput : true;
       });
 
+      attrs.$observe('tagging', function() {
+        if(attrs.tagging !== undefined)
+        {
+          // $eval() is needed otherwise we get a string instead of a function or a boolean
+          var taggingEval = scope.$eval(attrs.tagging);
+          $select.tagging = {isActivated: true, fct: taggingEval !== true ? taggingEval : undefined};
+        }
+        else
+        {
+          $select.tagging = {isActivated: false, fct: undefined};
+        }
+      });
+
       scope.$watch('$select.selected', function(newValue, oldValue) {
         if (ngModel.$viewValue !== newValue) {
           ngModel.$setViewValue(newValue);
@@ -324,8 +342,24 @@ angular.module('ui.select', [])
         $select.selected = ngModel.$viewValue;
       };
 
-      // See Click everywhere but here event http://stackoverflow.com/questions/12931369
-      $document.on('mousedown', function(e) {
+      function ensureHighlightVisible() {
+        var container = element.querySelectorAll('.ui-select-choices-content');
+        var rows = container.querySelectorAll('.ui-select-choices-row');
+
+        var highlighted = rows[$select.activeIndex];
+        if(highlighted) {
+          var posY = highlighted.offsetTop + highlighted.clientHeight - container[0].scrollTop;
+          var height = container[0].offsetHeight;
+
+          if (posY > height) {
+            container[0].scrollTop += posY - height;
+          } else if (posY < highlighted.clientHeight) {
+            container[0].scrollTop -= highlighted.clientHeight - posY;
+          }
+        }
+      }
+
+      function onDocumentClick(e) {
         var contains = false;
 
         if (window.jQuery) {
@@ -340,10 +374,13 @@ angular.module('ui.select', [])
           $select.close();
           scope.$digest();
         }
-      });
+      }
+
+      // See Click everywhere but here event http://stackoverflow.com/questions/12931369
+      $document.on('click', onDocumentClick);
 
       scope.$on('$destroy', function() {
-        $document.off('mousedown');
+        $document.off('click', onDocumentClick);
       });
 
       // Move transcluded elements to their correct position in main template
@@ -371,7 +408,7 @@ angular.module('ui.select', [])
   };
 }])
 
-.directive('choices',
+.directive('uiSelectChoices',
   ['uiSelectConfig', 'RepeatParser', 'uiSelectMinErr',
   function(uiSelectConfig, RepeatParser, uiSelectMinErr) {
 
@@ -402,7 +439,7 @@ angular.module('ui.select', [])
         $select.parseRepeatAttr(attrs.repeat);
 
         scope.$watch('$select.search', function() {
-          $select.activeIndex = 0;
+          $select.activeIndex = $select.tagging.isActivated ? -1 : 0;
           $select.refresh(attrs.refresh);
         });
 
@@ -416,7 +453,7 @@ angular.module('ui.select', [])
   };
 }])
 
-.directive('match', ['uiSelectConfig', function(uiSelectConfig) {
+.directive('uiSelectMatch', ['uiSelectConfig', function(uiSelectConfig) {
   return {
     restrict: 'EA',
     require: '^uiSelect',
@@ -453,10 +490,10 @@ angular.module('ui.select', [])
 
 angular.module('ui.select').run(['$templateCache', function ($templateCache) {
 	$templateCache.put('bootstrap/choices.tpl.html', '<ul class="ui-select-choices ui-select-choices-content dropdown-menu" role="menu" aria-labelledby="dLabel" ng-show="$select.items.length> 0"> <li class="ui-select-choices-row" ng-class="{active: $select.activeIndex===$index}"> <a href="javascript:void(0)" ng-transclude></a> </li> </ul> ');
-	$templateCache.put('bootstrap/match.tpl.html', '<button class="btn btn-default form-control ui-select-match" ng-hide="$select.open" ng-disabled="$select.disabled" ng-click="$select.activate()"> <span ng-hide="$select.selected !==undefined" class="text-muted">{{$select.placeholder}}</span> <span ng-show="$select.selected !==undefined" ng-transclude></span> <span class="caret"></span> </button> ');
+	$templateCache.put('bootstrap/match.tpl.html', '<button type="button" class="btn btn-default form-control ui-select-match" ng-hide="$select.open" ng-disabled="$select.disabled" ng-click="$select.activate()"> <span ng-hide="$select.selected !==undefined" class="text-muted">{{$select.placeholder}}</span> <span ng-show="$select.selected !==undefined" ng-transclude></span> <span class="caret"></span> </button> ');
 	$templateCache.put('bootstrap/select.tpl.html', '<div class="ui-select-bootstrap dropdown" ng-class="{open: $select.open}"> <div class="ui-select-match"></div> <input type="text" autocomplete="off" tabindex="" class="form-control ui-select-search" placeholder="{{$select.placeholder}}" ng-model="$select.search" ng-show="$select.open"> <div class="ui-select-choices"></div> </div> ');
 	$templateCache.put('select2/choices.tpl.html', '<ul class="ui-select-choices ui-select-choices-content select2-results"> <li class="ui-select-choices-row" ng-class="{\'select2-highlighted\': $select.activeIndex===$index}"> <div class="select2-result-label" ng-transclude></div> </li> </ul> ');
-	$templateCache.put('select2/match.tpl.html', '<a class="select2-choice ui-select-match" ng-class="{\'select2-default\': $select.selected === undefined}" ng-click="$select.activate()"> <span ng-hide="$select.selected !==undefined" class="select2-chosen">{{$select.placeholder}}</span> <span ng-show="$select.selected !==undefined" class="select2-chosen" ng-transclude></span> <span class="select2-arrow"><b></b></span> </a> ');
+	$templateCache.put('select2/match.tpl.html', '<a class="select2-choice ui-select-match" ng-class="{\'select2-default\': $select.selected===undefined}" ng-click="$select.activate()"> <span ng-hide="$select.selected !==undefined" class="select2-chosen">{{$select.placeholder}}</span> <span ng-show="$select.selected !==undefined" class="select2-chosen" ng-transclude></span> <span class="select2-arrow"><b></b></span> </a> ');
 	$templateCache.put('select2/select.tpl.html', '<div class="select2 select2-container" ng-class="{\'select2-container-active select2-dropdown-open\': $select.open, \'select2-container-disabled\': $select.disabled}"> <div class="ui-select-match"></div> <div class="select2-drop select2-with-searchbox select2-drop-active" ng-class="{\'select2-display-none\': !$select.open}"> <div class="select2-search"> <input type="text" autocomplete="off" autocorrect="off" autocapitalize="off" spellcheck="false" class="ui-select-search select2-input" ng-model="$select.search"> </div> <div class="ui-select-choices"></div> </div> </div> ');
 	$templateCache.put('selectize/choices.tpl.html', '<div ng-show="$select.open" class="ui-select-choices selectize-dropdown single"> <div class="ui-select-choices-content selectize-dropdown-content"> <div class="ui-select-choices-row" ng-class="{\'active\': $select.activeIndex===$index}"> <div class="option" data-selectable ng-transclude></div> </div> </div> </div> ');
 	$templateCache.put('selectize/match.tpl.html', '<div ng-hide="$select.open || $select.selected===undefined" class="ui-select-match" ng-transclude></div> ');
diff --git a/examples/bootstrap.html b/examples/bootstrap.html
index 940b62a68..17a40bfbc 100644
--- a/examples/bootstrap.html
+++ b/examples/bootstrap.html
@@ -95,6 +95,21 @@
         </div>
       </div>
 
+      <div class="form-group">
+        <label class="col-sm-3 control-label">Tagging</label>
+        <div class="col-sm-6">
+
+          <ui-select ng-model="person.selected" theme="bootstrap" ng-disabled="false" tagging="tagging">
+            <ui-select-match placeholder="Select or search a person in the list...">{{$select.selected.name}}</ui-select-match>
+            <ui-select-choices repeat="item in people | filter: $select.search">
+              <div ng-bind-html="item.name | highlight: $select.search"></div>
+              <small ng-bind-html="item.email | highlight: $select.search"></small>
+            </ui-select-choices>
+          </ui-select>
+
+        </div>
+      </div>
+
     </fieldset>
   </form>
 
diff --git a/examples/demo.js b/examples/demo.js
index 46756f011..cf9f69f1d 100644
--- a/examples/demo.js
+++ b/examples/demo.js
@@ -56,6 +56,10 @@ app.controller('DemoCtrl', function($scope, $http) {
     $scope.country.selected = undefined;
   };
 
+  $scope.tagging = function(name) {
+    return {name: name, email: name + '@gamil.com', age: 'Unknown'};
+  };
+
   $scope.person = {};
   $scope.people = [
     { name: 'Adam',      email: 'adam@email.com',      age: 10 },
diff --git a/src/select.js b/src/select.js
index 31feeea5c..0de45ee99 100644
--- a/src/select.js
+++ b/src/select.js
@@ -115,6 +115,7 @@ angular.module('ui.select', [])
   ctrl.disabled = undefined; // Initialized inside uiSelect directive link function
   ctrl.resetSearchInput = undefined; // Initialized inside uiSelect directive link function
   ctrl.refreshDelay = undefined; // Initialized inside uiSelectChoices directive link function
+  ctrl.tagging = {isActivated: false, fct: undefined};
 
   var _searchInput = $element.querySelectorAll('input.ui-select-search');
   if (_searchInput.length !== 1) {
@@ -188,6 +189,10 @@ angular.module('ui.select', [])
 
   // When the user clicks on an item inside the dropdown
   ctrl.select = function(item) {
+    if(ctrl.tagging.isActivated && !item && ctrl.search.length > 0) {
+      // create new item on the fly
+      item = ctrl.tagging.fct !== undefined ? ctrl.tagging.fct(ctrl.search) : ctrl.search;
+    }
     ctrl.selected = item;
     ctrl.close();
     // Using a watch instead of $scope.ngModel.$setViewValue(item)
@@ -216,7 +221,7 @@ angular.module('ui.select', [])
         if (ctrl.activeIndex < ctrl.items.length - 1) { ctrl.activeIndex++; }
         break;
       case Key.Up:
-        if (ctrl.activeIndex > 0) { ctrl.activeIndex--; }
+        if (ctrl.activeIndex > 0 || (ctrl.search.length === 0 && ctrl.tagging.isActivated)) { ctrl.activeIndex--; }
         break;
       case Key.Tab:
       case Key.Enter:
@@ -235,7 +240,9 @@ angular.module('ui.select', [])
   _searchInput.on('keydown', function(e) {
     // Keyboard shortcuts are all about the items,
     // does not make sense (and will crash) if ctrl.items is empty
-    if (ctrl.items.length > 0) {
+    // unless we are in tagging mode, in that case we juste need to
+    // have a search term
+    if ((ctrl.items.length > 0 && !ctrl.tagging.isActivated) || (ctrl.search.length > 0 && ctrl.tagging.isActivated)) {
       var key = e.which;
 
       $scope.$apply(function() {
@@ -280,7 +287,7 @@ angular.module('ui.select', [])
 }])
 
 .directive('uiSelect',
-  ['$document', 'uiSelectConfig', 'uiSelectMinErr', 
+  ['$document', 'uiSelectConfig', 'uiSelectMinErr',
   function($document, uiSelectConfig, uiSelectMinErr) {
 
   return {
@@ -312,6 +319,19 @@ angular.module('ui.select', [])
         $select.resetSearchInput = resetSearchInput !== undefined ? resetSearchInput : true;
       });
 
+      attrs.$observe('tagging', function() {
+        if(attrs.tagging !== undefined)
+        {
+          // $eval() is needed otherwise we get a string instead of a function or a boolean
+          var taggingEval = scope.$eval(attrs.tagging);
+          $select.tagging = {isActivated: true, fct: taggingEval !== true ? taggingEval : undefined};
+        }
+        else
+        {
+          $select.tagging = {isActivated: false, fct: undefined};
+        }
+      });
+
       scope.$watch('$select.selected', function(newValue, oldValue) {
         if (ngModel.$viewValue !== newValue) {
           ngModel.$setViewValue(newValue);
@@ -322,6 +342,23 @@ angular.module('ui.select', [])
         $select.selected = ngModel.$viewValue;
       };
 
+      function ensureHighlightVisible() {
+        var container = element.querySelectorAll('.ui-select-choices-content');
+        var rows = container.querySelectorAll('.ui-select-choices-row');
+
+        var highlighted = rows[$select.activeIndex];
+        if(highlighted) {
+          var posY = highlighted.offsetTop + highlighted.clientHeight - container[0].scrollTop;
+          var height = container[0].offsetHeight;
+
+          if (posY > height) {
+            container[0].scrollTop += posY - height;
+          } else if (posY < highlighted.clientHeight) {
+            container[0].scrollTop -= highlighted.clientHeight - posY;
+          }
+        }
+      }
+
       function onDocumentClick(e) {
         var contains = false;
 
@@ -402,7 +439,7 @@ angular.module('ui.select', [])
         $select.parseRepeatAttr(attrs.repeat);
 
         scope.$watch('$select.search', function() {
-          $select.activeIndex = 0;
+          $select.activeIndex = $select.tagging.isActivated ? -1 : 0;
           $select.refresh(attrs.refresh);
         });
 
diff --git a/test/select.spec.js b/test/select.spec.js
index d6971729f..63f7d5ecb 100644
--- a/test/select.spec.js
+++ b/test/select.spec.js
@@ -35,10 +35,11 @@ describe('ui-select tests', function() {
     if (attrs !== undefined) {
       if (attrs.disabled !== undefined) { attrsHtml += ' ng-disabled="' + attrs.disabled + '"'; }
       if (attrs.required !== undefined) { attrsHtml += ' ng-required="' + attrs.required + '"'; }
+      if (attrs.tagging !== undefined) { attrsHtml += ' tagging="' + attrs.tagging + '"'; }
     }
 
     return compileTemplate(
-      '<ui-select ng-model="selection"' + attrsHtml + '> \
+      '<ui-select ng-model="selection" ' + attrsHtml + '> \
         <ui-select-match placeholder="Pick one...">{{$select.selected.name}}</ui-select-match> \
         <ui-select-choices repeat="person in people | filter: $select.search"> \
           <div ng-bind-html="person.name | highlight: $select.search"></div> \
@@ -163,6 +164,15 @@ describe('ui-select tests', function() {
     expect(isDropdownOpened(el3)).toEqual(true);
   });
 
+  it('should allow tagging if the attribute says so', function() {
+    var el = createUiSelect({tagging: true});
+    clickMatch(el);
+
+    $(el).scope().$select.select("I don't exist");
+
+    expect($(el).scope().$select.selected).toEqual("I don't exist");
+  });
+
   // See when an item that evaluates to false (such as "false" or "no") is selected, the placeholder is shown https://github.com/angular-ui/ui-select/pull/32
   it('should not display the placeholder when item evaluates to false', function() {
     scope.items = ['false'];