diff --git a/src/cdk/stepper/stepper.ts b/src/cdk/stepper/stepper.ts
index 428095a806a0..e80ff26fbf81 100644
--- a/src/cdk/stepper/stepper.ts
+++ b/src/cdk/stepper/stepper.ts
@@ -24,6 +24,8 @@ import {
 } from '@angular/core';
 import {LEFT_ARROW, RIGHT_ARROW, ENTER, SPACE} from '@angular/cdk/keyboard';
 import {CdkStepLabel} from './step-label';
+import {coerceBooleanProperty} from '@angular/cdk/coercion';
+import {AbstractControl} from '@angular/forms';
 
 /** Used to generate unique ID for each stepper component. */
 let nextId = 0;
@@ -45,7 +47,7 @@ export class CdkStepperSelectionEvent {
 
 @Component({
   selector: 'cdk-step',
-  templateUrl: 'step.html',
+  templateUrl: 'step.html'
 })
 export class CdkStep {
   /** Template for step label if it exists. */
@@ -54,6 +56,17 @@ export class CdkStep {
   /** Template for step content. */
   @ViewChild(TemplateRef) content: TemplateRef<any>;
 
+  /** The top level abstract control of the step. */
+  @Input()
+  get stepControl() { return this._stepControl; }
+  set stepControl(control: AbstractControl) {
+    this._stepControl = control;
+  }
+  private _stepControl: AbstractControl;
+
+  /** Whether user has seen the expanded step content or not . */
+  interacted = false;
+
   /** Label of the step. */
   @Input()
   label: string;
@@ -70,7 +83,7 @@ export class CdkStep {
   selector: 'cdk-stepper',
   host: {
     '(focus)': '_focusStep()',
-    '(keydown)': '_onKeydown($event)',
+    '(keydown)': '_onKeydown($event)'
   },
 })
 export class CdkStepper {
@@ -80,11 +93,17 @@ export class CdkStepper {
   /** The list of step headers of the steps in the stepper. */
   _stepHeader: QueryList<ElementRef>;
 
+  /** Whether the validity of previous steps should be checked or not. */
+  @Input()
+  get linear() { return this._linear; }
+  set linear(value: any) { this._linear = coerceBooleanProperty(value); }
+  private _linear = false;
+
   /** The index of the selected step. */
   @Input()
   get selectedIndex() { return this._selectedIndex; }
   set selectedIndex(index: number) {
-    if (this._selectedIndex != index) {
+    if (this._selectedIndex != index && !this._anyControlsInvalid(index)) {
       this._emitStepperSelectionEvent(index);
       this._focusStep(this._selectedIndex);
     }
@@ -153,7 +172,7 @@ export class CdkStepper {
         break;
       case SPACE:
       case ENTER:
-        this._emitStepperSelectionEvent(this._focusIndex);
+        this.selectedIndex = this._focusIndex;
         break;
       default:
         // Return to avoid calling preventDefault on keys that are not explicitly handled.
@@ -166,4 +185,17 @@ export class CdkStepper {
     this._focusIndex = index;
     this._stepHeader.toArray()[this._focusIndex].nativeElement.focus();
   }
+
+  private _anyControlsInvalid(index: number): boolean {
+    const stepsArray = this._steps.toArray();
+    stepsArray[this._selectedIndex].interacted = true;
+    if (this._linear) {
+      for (let i = 0; i < index; i++) {
+        if (!stepsArray[i].stepControl.valid) {
+          return true;
+        }
+      }
+    }
+    return false;
+  }
 }
diff --git a/src/cdk/stepper/tsconfig-build.json b/src/cdk/stepper/tsconfig-build.json
index d00cedda93ea..ea3a295b1e25 100644
--- a/src/cdk/stepper/tsconfig-build.json
+++ b/src/cdk/stepper/tsconfig-build.json
@@ -4,7 +4,8 @@
     "outDir": "../../../dist/packages/cdk",
     "baseUrl": ".",
     "paths": {
-      "@angular/cdk/keyboard": ["../../../dist/packages/cdk/keyboard/public_api"]
+      "@angular/cdk/keyboard": ["../../../dist/packages/cdk/keyboard/public_api"],
+      "@angular/cdk/coercion": ["../../../dist/packages/cdk/coercion/public_api"]
     }
   },
   "files": [
diff --git a/src/demo-app/stepper/stepper-demo.html b/src/demo-app/stepper/stepper-demo.html
index e1205208640e..f394b0de8a24 100644
--- a/src/demo-app/stepper/stepper-demo.html
+++ b/src/demo-app/stepper/stepper-demo.html
@@ -1,3 +1,47 @@
+<h2>Linear Vertical Stepper Demo</h2>
+<md-checkbox [(ngModel)]="isNonLinear">Disable linear mode</md-checkbox>
+<form [formGroup]="formGroup">
+  <md-vertical-stepper formArrayName="formArray" [linear]="!isNonLinear">
+    <md-step formGroupName="0" [stepControl]="formArray.get([0])">
+      <ng-template mdStepLabel>Fill out your name</ng-template>
+      <md-input-container>
+        <input mdInput placeholder="First Name" formControlName="firstNameFormCtrl" required>
+        <md-error>This field is required</md-error>
+      </md-input-container>
+
+      <md-input-container>
+        <input mdInput placeholder="Last Name" formControlName="lastNameFormCtrl" required>
+        <md-error>This field is required</md-error>
+      </md-input-container>
+      <div>
+        <button md-button mdStepperNext type="button">Next</button>
+      </div>
+    </md-step>
+
+    <md-step formGroupName="1" [stepControl]="formArray.get([1])">
+      <ng-template mdStepLabel>
+        <div>Fill out your phone number</div>
+      </ng-template>
+      <md-input-container>
+        <input mdInput placeholder="Phone number" formControlName="phoneFormCtrl">
+        <md-error>This field is required</md-error>
+      </md-input-container>
+      <div>
+        <button md-button mdStepperPrevious type="button">Back</button>
+        <button md-button mdStepperNext type="button">Next</button>
+      </div>
+    </md-step>
+
+    <md-step>
+      <ng-template mdStepLabel>Confirm your information</ng-template>
+      Everything seems correct.
+      <div>
+        <button md-button>Done</button>
+      </div>
+    </md-step>
+  </md-vertical-stepper>
+</form>
+
 <h2>Vertical Stepper Demo</h2>
 <md-vertical-stepper>
   <md-step>
@@ -134,16 +178,3 @@ <h2>Horizontal Stepper Demo with Templated Label</h2>
     </div>
   </md-step>
 </md-horizontal-stepper>
-
-<h2>Vertical Stepper Demo</h2>
-<md-vertical-stepper>
-  <md-step *ngFor="let step of steps" [label]="step.label">
-    <md-input-container>
-      <input mdInput placeholder="Answer" [(ngModel)]="step.content">
-    </md-input-container>
-    <div>
-      <button md-button mdStepperPrevious>Back</button>
-      <button md-button mdStepperNext>Next</button>
-    </div>
-  </md-step>
-</md-vertical-stepper>
diff --git a/src/demo-app/stepper/stepper-demo.ts b/src/demo-app/stepper/stepper-demo.ts
index 7df83cde23f5..cc0bc6673215 100644
--- a/src/demo-app/stepper/stepper-demo.ts
+++ b/src/demo-app/stepper/stepper-demo.ts
@@ -1,16 +1,39 @@
 import {Component} from '@angular/core';
+import {Validators, FormBuilder, FormGroup} from '@angular/forms';
 
 @Component({
   moduleId: module.id,
   selector: 'stepper-demo',
   templateUrl: 'stepper-demo.html',
-  styleUrls: ['stepper-demo.scss'],
+  styleUrls: ['stepper-demo.scss']
 })
 export class StepperDemo {
+  formGroup: FormGroup;
+  isNonLinear = false;
+
   steps = [
     {label: 'Confirm your name', content: 'Last name, First name.'},
     {label: 'Confirm your contact information', content: '123-456-7890'},
     {label: 'Confirm your address', content: '1600 Amphitheater Pkwy MTV'},
     {label: 'You are now done', content: 'Finished!'}
   ];
+
+  /** Returns a FormArray with the name 'formArray'. */
+  get formArray() { return this.formGroup.get('formArray'); }
+
+  constructor(private _formBuilder: FormBuilder) { }
+
+  ngOnInit() {
+    this.formGroup = this._formBuilder.group({
+      formArray: this._formBuilder.array([
+        this._formBuilder.group({
+          firstNameFormCtrl: ['', Validators.required],
+          lastNameFormCtrl: ['', Validators.required],
+        }),
+        this._formBuilder.group({
+          phoneFormCtrl: [''],
+        })
+      ])
+    });
+  }
 }
diff --git a/src/lib/stepper/stepper.ts b/src/lib/stepper/stepper.ts
index f76c63bdd6c0..5a0dd890fa89 100644
--- a/src/lib/stepper/stepper.ts
+++ b/src/lib/stepper/stepper.ts
@@ -15,26 +15,56 @@ import {
   // considers such imports as unused (https://github.com/Microsoft/TypeScript/issues/14953)
   // tslint:disable-next-line:no-unused-variable
   ElementRef,
+  Inject,
+  Optional,
   QueryList,
+  SkipSelf,
   ViewChildren
 }from '@angular/core';
 import {MdStepLabel} from './step-label';
+import {
+  defaultErrorStateMatcher,
+  ErrorOptions,
+  MD_ERROR_GLOBAL_OPTIONS,
+  ErrorStateMatcher
+} from '../core/error/error-options';
+import {FormControl, FormGroupDirective, NgForm} from '@angular/forms';
 
 @Component({
   moduleId: module.id,
   selector: 'md-step, mat-step',
-  templateUrl: 'step.html'
+  templateUrl: 'step.html',
+  providers: [{provide: MD_ERROR_GLOBAL_OPTIONS, useExisting: MdStep}]
 })
-export class MdStep extends CdkStep {
+export class MdStep extends CdkStep implements ErrorOptions {
   /** Content for step label given by <ng-template matStepLabel> or <ng-template mdStepLabel>. */
   @ContentChild(MdStepLabel) stepLabel: MdStepLabel;
 
-  constructor(mdStepper: MdStepper) {
+  /** Original ErrorStateMatcher that checks the validity of form control. */
+  private _originalErrorStateMatcher: ErrorStateMatcher;
+
+  constructor(mdStepper: MdStepper,
+              @Optional() @SkipSelf() @Inject(MD_ERROR_GLOBAL_OPTIONS) errorOptions: ErrorOptions) {
     super(mdStepper);
+    this._originalErrorStateMatcher =
+        errorOptions ? errorOptions.errorStateMatcher || defaultErrorStateMatcher
+            : defaultErrorStateMatcher;
+  }
+
+  /** Custom error state matcher that additionally checks for validity of interacted form. */
+  errorStateMatcher = (control: FormControl, form: FormGroupDirective | NgForm) => {
+    let originalErrorState = this._originalErrorStateMatcher(control, form);
+
+    // Custom error state checks for the validity of form that is not submitted or touched
+    // since user can trigger a form change by calling for another step without directly
+    // interacting with the current form.
+    let customErrorState =  control.invalid && this.interacted;
+
+    return originalErrorState || customErrorState;
   }
 }
 
-export class MdStepper extends CdkStepper {
+export class MdStepper extends CdkStepper implements ErrorOptions {
   /** The list of step headers of the steps in the stepper. */
   @ViewChildren('stepHeader') _stepHeader: QueryList<ElementRef>;