diff --git a/src/lib/stepper/stepper.spec.ts b/src/lib/stepper/stepper.spec.ts
new file mode 100644
index 000000000000..c7e478fa77bb
--- /dev/null
+++ b/src/lib/stepper/stepper.spec.ts
@@ -0,0 +1,567 @@
+import {async, ComponentFixture, TestBed} from '@angular/core/testing';
+import {Component, DebugElement} from '@angular/core';
+import {MdStepperModule} from './index';
+import {By} from '@angular/platform-browser';
+import {MdHorizontalStepper} from './stepper-horizontal';
+import {MdVerticalStepper} from './stepper-vertical';
+import {NoopAnimationsModule} from '@angular/platform-browser/animations';
+import {FormControl, FormGroup, ReactiveFormsModule, Validators} from '@angular/forms';
+import {MdStepperNext, MdStepperPrevious} from './stepper-button';
+import {dispatchKeyboardEvent} from '@angular/cdk/testing';
+import {ENTER, LEFT_ARROW, RIGHT_ARROW, SPACE} from '@angular/cdk/keycodes';
+import {MdStepper} from './stepper';
+
+describe('MdHorizontalStepper', () => {
+  beforeEach(async(() => {
+    TestBed.configureTestingModule({
+      imports: [MdStepperModule, NoopAnimationsModule, ReactiveFormsModule],
+      declarations: [
+        SimpleMdHorizontalStepperApp,
+        LinearMdHorizontalStepperApp
+      ]
+    });
+
+    TestBed.compileComponents();
+  }));
+
+  describe('basic horizontal stepper', () => {
+    let fixture: ComponentFixture<SimpleMdHorizontalStepperApp>;
+    let stepperComponent: MdHorizontalStepper;
+
+    beforeEach(() => {
+      fixture = TestBed.createComponent(SimpleMdHorizontalStepperApp);
+      fixture.detectChanges();
+
+      stepperComponent = fixture.debugElement
+          .query(By.css('md-horizontal-stepper')).componentInstance;
+    });
+
+    it('should default to the first step', () => {
+      expect(stepperComponent.selectedIndex).toBe(0);
+    });
+
+    it('should change selected index on header click', () => {
+      let stepHeaders = fixture.debugElement.queryAll(By.css('.mat-horizontal-stepper-header'));
+      checkSelectionChangeOnHeaderClick(stepperComponent, fixture, stepHeaders);
+    });
+
+    it('should set the "tablist" role on stepper', () => {
+      let stepperEl = fixture.debugElement.query(By.css('md-horizontal-stepper')).nativeElement;
+      expect(stepperEl.getAttribute('role')).toBe('tablist');
+    });
+
+    it('should set aria-expanded of content correctly', () => {
+      let stepContents = fixture.debugElement.queryAll(By.css(`.mat-horizontal-stepper-content`));
+      checkExpandedContent(stepperComponent, fixture, stepContents);
+    });
+
+    it('should display the correct label', () => {
+      checkCorrectLabel(stepperComponent, fixture);
+    });
+
+    it('should go to next available step when the next button is clicked', () => {
+      checkNextStepperButton(stepperComponent, fixture);
+    });
+
+    it('should go to previous available step when the previous button is clicked', () => {
+      checkPreviousStepperButton(stepperComponent, fixture);
+    });
+
+    it('should set the correct step position for animation', () => {
+      checkStepPosition(stepperComponent, fixture);
+    });
+
+    it('should support keyboard events to move and select focus', () => {
+      let stepHeaders = fixture.debugElement.queryAll(By.css('.mat-horizontal-stepper-header'));
+      checkKeyboardEvent(stepperComponent, fixture, stepHeaders);
+    });
+  });
+
+  describe('linear horizontal stepper', () => {
+    let fixture: ComponentFixture<LinearMdHorizontalStepperApp>;
+    let testComponent: LinearMdHorizontalStepperApp;
+    let stepperComponent: MdHorizontalStepper;
+
+    beforeEach(() => {
+      fixture = TestBed.createComponent(LinearMdHorizontalStepperApp);
+      fixture.detectChanges();
+
+      testComponent = fixture.componentInstance;
+      stepperComponent = fixture.debugElement
+          .query(By.css('md-horizontal-stepper')).componentInstance;
+    });
+
+    it('should have true linear attribute', () => {
+      expect(stepperComponent.linear).toBe(true);
+    });
+
+    it('should not move to next step if current step is not valid', () => {
+      expect(testComponent.oneGroup.get('oneCtrl')!.value).toBe('');
+      expect(testComponent.oneGroup.get('oneCtrl')!.valid).toBe(false);
+      expect(testComponent.oneGroup.valid).toBe(false);
+      expect(stepperComponent.selectedIndex).toBe(0);
+
+      let stepHeaderEl = fixture.debugElement
+          .queryAll(By.css('.mat-horizontal-stepper-header'))[1].nativeElement;
+      checkLinearStepperValidity(stepHeaderEl, stepperComponent, testComponent, fixture);
+    });
+  });
+});
+
+describe('MdVerticalStepper', () => {
+  beforeEach(async(() => {
+    TestBed.configureTestingModule({
+      imports: [MdStepperModule, NoopAnimationsModule, ReactiveFormsModule],
+      declarations: [
+        SimpleMdVerticalStepperApp,
+        LinearMdVerticalStepperApp
+      ]
+    });
+
+    TestBed.compileComponents();
+  }));
+
+  describe('basic vertical stepper', () => {
+    let fixture: ComponentFixture<SimpleMdVerticalStepperApp>;
+    let stepperComponent: MdVerticalStepper;
+
+    beforeEach(() => {
+      fixture = TestBed.createComponent(SimpleMdVerticalStepperApp);
+      fixture.detectChanges();
+
+      stepperComponent = fixture.debugElement
+          .query(By.css('md-vertical-stepper')).componentInstance;
+    });
+
+    it('should default to the first step', () => {
+      expect(stepperComponent.selectedIndex).toBe(0);
+    });
+
+    it('should change selected index on header click', () => {
+      let stepHeaders = fixture.debugElement.queryAll(By.css('.mat-vertical-stepper-header'));
+      checkSelectionChangeOnHeaderClick(stepperComponent, fixture, stepHeaders);
+
+    });
+
+    it('should set the "tablist" role on stepper', () => {
+      let stepperEl = fixture.debugElement.query(By.css('md-vertical-stepper')).nativeElement;
+      expect(stepperEl.getAttribute('role')).toBe('tablist');
+    });
+
+    it('should set aria-expanded of content correctly', () => {
+      let stepContents = fixture.debugElement.queryAll(By.css(`.mat-vertical-stepper-content`));
+      checkExpandedContent(stepperComponent, fixture, stepContents);
+    });
+
+    it('should display the correct label', () => {
+      checkCorrectLabel(stepperComponent, fixture);
+    });
+
+    it('should go to next available step when the next button is clicked', () => {
+      checkNextStepperButton(stepperComponent, fixture);
+    });
+
+    it('should go to previous available step when the previous button is clicked', () => {
+      checkPreviousStepperButton(stepperComponent, fixture);
+    });
+
+    it('should set the correct step position for animation', () => {
+      checkStepPosition(stepperComponent, fixture);
+    });
+
+    it('should support keyboard events to move and select focus', () => {
+      let stepHeaders = fixture.debugElement.queryAll(By.css('.mat-vertical-stepper-header'));
+      checkKeyboardEvent(stepperComponent, fixture, stepHeaders);
+    });
+  });
+
+  describe('linear vertical stepper', () => {
+    let fixture: ComponentFixture<LinearMdVerticalStepperApp>;
+    let testComponent: LinearMdVerticalStepperApp;
+    let stepperComponent: MdVerticalStepper;
+
+    beforeEach(() => {
+      fixture = TestBed.createComponent(LinearMdVerticalStepperApp);
+      fixture.detectChanges();
+
+      testComponent = fixture.componentInstance;
+      stepperComponent = fixture.debugElement
+          .query(By.css('md-vertical-stepper')).componentInstance;
+    });
+
+    it('should have true linear attribute', () => {
+      expect(stepperComponent.linear).toBe(true);
+    });
+
+    it('should not move to next step if current step is not valid', () => {
+      expect(testComponent.oneGroup.get('oneCtrl')!.value).toBe('');
+      expect(testComponent.oneGroup.get('oneCtrl')!.valid).toBe(false);
+      expect(testComponent.oneGroup.valid).toBe(false);
+      expect(stepperComponent.selectedIndex).toBe(0);
+
+      let stepHeaderEl = fixture.debugElement
+          .queryAll(By.css('.mat-vertical-stepper-header'))[1].nativeElement;
+
+      checkLinearStepperValidity(stepHeaderEl, stepperComponent, testComponent, fixture);
+    });
+  });
+});
+
+function checkSelectionChangeOnHeaderClick(stepperComponent: MdStepper,
+                                           fixture: ComponentFixture<any>,
+                                           stepHeaders: DebugElement[]) {
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  // select the second step
+  let stepHeaderEl = stepHeaders[1].nativeElement;
+  stepHeaderEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(1);
+
+  // select the third step
+  stepHeaderEl = stepHeaders[2].nativeElement;
+  stepHeaderEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(2);
+}
+
+function checkExpandedContent(stepperComponent: MdStepper,
+                              fixture: ComponentFixture<any>,
+                              stepContents: DebugElement[]) {
+  let firstStepContentEl = stepContents[0].nativeElement;
+  expect(firstStepContentEl.getAttribute('aria-expanded')).toBe('true');
+
+  stepperComponent.selectedIndex = 1;
+  fixture.detectChanges();
+
+  expect(firstStepContentEl.getAttribute('aria-expanded')).toBe('false');
+  let secondStepContentEl = stepContents[1].nativeElement;
+  expect(secondStepContentEl.getAttribute('aria-expanded')).toBe('true');
+}
+
+function checkCorrectLabel(stepperComponent: MdStepper, fixture: ComponentFixture<any>) {
+  let selectedLabel = fixture.nativeElement.querySelector('[aria-selected="true"]');
+  expect(selectedLabel.textContent).toMatch('Step 1');
+
+  stepperComponent.selectedIndex = 2;
+  fixture.detectChanges();
+
+  selectedLabel = fixture.nativeElement.querySelector('[aria-selected="true"]');
+  expect(selectedLabel.textContent).toMatch('Step 3');
+
+  fixture.componentInstance.inputLabel = 'New Label';
+  fixture.detectChanges();
+
+  selectedLabel = fixture.nativeElement.querySelector('[aria-selected="true"]');
+  expect(selectedLabel.textContent).toMatch('New Label');
+}
+
+function checkNextStepperButton(stepperComponent: MdStepper, fixture: ComponentFixture<any>) {
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  let nextButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperNext))[0].nativeElement;
+  nextButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(1);
+
+  nextButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperNext))[1].nativeElement;
+  nextButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(2);
+
+  nextButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperNext))[2].nativeElement;
+  nextButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(2);
+}
+
+function checkPreviousStepperButton(stepperComponent: MdStepper, fixture: ComponentFixture<any>) {
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  stepperComponent.selectedIndex = 2;
+  let previousButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperPrevious))[2].nativeElement;
+  previousButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(1);
+
+  previousButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperPrevious))[1].nativeElement;
+  previousButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  previousButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperPrevious))[0].nativeElement;
+  previousButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(0);
+}
+
+function checkStepPosition(stepperComponent: MdStepper, fixture: ComponentFixture<any>) {
+  expect(stepperComponent._getAnimationDirection(0)).toBe('current');
+  expect(stepperComponent._getAnimationDirection(1)).toBe('next');
+  expect(stepperComponent._getAnimationDirection(2)).toBe('next');
+
+  stepperComponent.selectedIndex = 1;
+  fixture.detectChanges();
+
+  expect(stepperComponent._getAnimationDirection(0)).toBe('previous');
+  expect(stepperComponent._getAnimationDirection(1)).toBe('current');
+  expect(stepperComponent._getAnimationDirection(2)).toBe('next');
+
+  stepperComponent.selectedIndex = 2;
+  fixture.detectChanges();
+
+  expect(stepperComponent._getAnimationDirection(0)).toBe('previous');
+  expect(stepperComponent._getAnimationDirection(1)).toBe('previous');
+  expect(stepperComponent._getAnimationDirection(2)).toBe('current');
+}
+
+function checkKeyboardEvent(stepperComponent: MdStepper,
+                            fixture: ComponentFixture<any>,
+                            stepHeaders: DebugElement[]) {
+  expect(stepperComponent._focusIndex).toBe(0);
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  let stepHeaderEl = stepHeaders[0].nativeElement;
+  dispatchKeyboardEvent(stepHeaderEl, 'keydown', RIGHT_ARROW);
+  fixture.detectChanges();
+
+  expect(stepperComponent._focusIndex)
+      .toBe(1, 'Expected index of focused step to be increased by 1 after RIGHT_ARROW event.');
+  expect(stepperComponent.selectedIndex)
+      .toBe(0, 'Expected index of selected step to remain unchanged after RIGHT_ARROW event.');
+
+  stepHeaderEl = stepHeaders[1].nativeElement;
+  dispatchKeyboardEvent(stepHeaderEl, 'keydown', ENTER);
+  fixture.detectChanges();
+
+  expect(stepperComponent._focusIndex)
+      .toBe(1, 'Expected index of focused step to remain unchanged after ENTER event.');
+  expect(stepperComponent.selectedIndex)
+      .toBe(1,
+          'Expected index of selected step to change to index of focused step after EVENT event.');
+
+  stepHeaderEl = stepHeaders[1].nativeElement;
+  dispatchKeyboardEvent(stepHeaderEl, 'keydown', LEFT_ARROW);
+  fixture.detectChanges();
+
+  expect(stepperComponent._focusIndex)
+      .toBe(0, 'Expected index of focused step to decrease by 1 after LEFT_ARROW event.');
+  expect(stepperComponent.selectedIndex)
+      .toBe(1, 'Expected index of selected step to remain unchanged after LEFT_ARROW event.');
+
+  // When the focus is on the last step and right arrow key is pressed, the focus should cycle
+  // through to the first step.
+  stepperComponent._focusIndex = 2;
+  stepHeaderEl = stepHeaders[2].nativeElement;
+  dispatchKeyboardEvent(stepHeaderEl, 'keydown', RIGHT_ARROW);
+  fixture.detectChanges();
+
+  expect(stepperComponent._focusIndex)
+      .toBe(0,
+          'Expected index of focused step to cycle through to index 0 after RIGHT_ARROW event.');
+  expect(stepperComponent.selectedIndex)
+      .toBe(1, 'Expected index of selected step to remain unchanged after RIGHT_ARROW event.');
+
+  stepHeaderEl = stepHeaders[0].nativeElement;
+  dispatchKeyboardEvent(stepHeaderEl, 'keydown', SPACE);
+  fixture.detectChanges();
+
+  expect(stepperComponent._focusIndex)
+      .toBe(0, 'Expected index of focused to remain unchanged after SPACE event.');
+  expect(stepperComponent.selectedIndex)
+      .toBe(0,
+          'Expected index of selected step to change to index of focused step after SPACE event.');
+}
+
+function checkLinearStepperValidity(stepHeaderEl: HTMLElement,
+                                    stepperComponent: MdStepper,
+                                    testComponent:
+                                        LinearMdHorizontalStepperApp | LinearMdVerticalStepperApp,
+                                    fixture: ComponentFixture<any>) {
+  stepHeaderEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  let nextButtonNativeEl = fixture.debugElement
+      .queryAll(By.directive(MdStepperNext))[0].nativeElement;
+  nextButtonNativeEl.click();
+  fixture.detectChanges();
+
+  expect(stepperComponent.selectedIndex).toBe(0);
+
+  testComponent.oneGroup.get('oneCtrl')!.setValue('answer');
+  stepHeaderEl.click();
+  fixture.detectChanges();
+
+  expect(testComponent.oneGroup.valid).toBe(true);
+  expect(stepperComponent.selectedIndex).toBe(1);
+}
+
+@Component({
+  template: `
+    <md-horizontal-stepper>
+      <md-step>
+        <ng-template mdStepLabel>Step 1</ng-template>
+        Content 1
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+      <md-step>
+        <ng-template mdStepLabel>Step 2</ng-template>
+        Content 2
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+      <md-step [label]="inputLabel">
+        Content 3
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+    </md-horizontal-stepper>
+  `
+})
+class SimpleMdHorizontalStepperApp {
+  inputLabel = 'Step 3';
+}
+
+@Component({
+  template: `
+    <md-horizontal-stepper linear>
+      <md-step [stepControl]="oneGroup">
+        <form [formGroup]="oneGroup">
+          <ng-template mdStepLabel>Step one</ng-template>
+          <md-form-field>
+            <input mdInput formControlName="oneCtrl" required>
+          </md-form-field>
+          <div>
+            <button md-button mdStepperPrevious>Back</button>
+            <button md-button mdStepperNext>Next</button>
+          </div>
+        </form>
+      </md-step>
+      <md-step [stepControl]="twoGroup">
+        <form [formGroup]="twoGroup">
+          <ng-template mdStepLabel>Step two</ng-template>
+          <md-form-field>
+            <input mdInput formControlName="twoCtrl" required>
+          </md-form-field>
+          <div>
+            <button md-button mdStepperPrevious>Back</button>
+            <button md-button mdStepperNext>Next</button>
+          </div>
+        </form>
+      </md-step>
+    </md-horizontal-stepper>
+  `
+})
+class LinearMdHorizontalStepperApp {
+  oneGroup: FormGroup;
+  twoGroup: FormGroup;
+
+  ngOnInit() {
+    this.oneGroup = new FormGroup({
+      oneCtrl: new FormControl('', Validators.required)
+    });
+    this.twoGroup = new FormGroup({
+      twoCtrl: new FormControl('', Validators.required)
+    });
+  }
+}
+
+@Component({
+  template: `
+    <md-vertical-stepper>
+      <md-step>
+        <ng-template mdStepLabel>Step 1</ng-template>
+        Content 1
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+      <md-step>
+        <ng-template mdStepLabel>Step 2</ng-template>
+        Content 2
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+      <md-step [label]="inputLabel">
+        Content 3
+        <div>
+          <button md-button mdStepperPrevious>Back</button>
+          <button md-button mdStepperNext>Next</button>
+        </div>
+      </md-step>
+    </md-vertical-stepper>
+  `
+})
+class SimpleMdVerticalStepperApp {
+  inputLabel = 'Step 3';
+}
+
+@Component({
+  template: `
+    <md-vertical-stepper linear>
+      <md-step [stepControl]="oneGroup">
+        <form [formGroup]="oneGroup">
+          <ng-template mdStepLabel>Step one</ng-template>
+          <md-form-field>
+            <input mdInput formControlName="oneCtrl" required>
+          </md-form-field>
+          <div>
+            <button md-button mdStepperPrevious>Back</button>
+            <button md-button mdStepperNext>Next</button>
+          </div>
+        </form>
+      </md-step>
+      <md-step [stepControl]="twoGroup">
+        <form [formGroup]="twoGroup">
+          <ng-template mdStepLabel>Step two</ng-template>
+          <md-form-field>
+            <input mdInput formControlName="twoCtrl" required>
+          </md-form-field>
+          <div>
+            <button md-button mdStepperPrevious>Back</button>
+            <button md-button mdStepperNext>Next</button>
+          </div>
+        </form>
+      </md-step>
+    </md-vertical-stepper>
+  `
+})
+class LinearMdVerticalStepperApp {
+  oneGroup: FormGroup;
+  twoGroup: FormGroup;
+
+  ngOnInit() {
+    this.oneGroup = new FormGroup({
+      oneCtrl: new FormControl('', Validators.required)
+    });
+    this.twoGroup = new FormGroup({
+      twoCtrl: new FormControl('', Validators.required)
+    });
+  }
+}
diff --git a/test/karma-test-shim.js b/test/karma-test-shim.js
index fadbd1397e7d..450ad1286576 100644
--- a/test/karma-test-shim.js
+++ b/test/karma-test-shim.js
@@ -58,6 +58,7 @@ System.config({
     '@angular/cdk/platform': 'dist/packages/cdk/platform/index.js',
     '@angular/cdk/portal': 'dist/packages/cdk/portal/index.js',
     '@angular/cdk/rxjs': 'dist/packages/cdk/rxjs/index.js',
+    '@angular/cdk/stepper': 'dist/packages/cdk/stepper/index.js',
     '@angular/cdk/table': 'dist/packages/cdk/table/index.js',
     '@angular/cdk/testing': 'dist/packages/cdk/testing/index.js',
   },