diff --git a/src/demo-app/toolbar/toolbar-demo.html b/src/demo-app/toolbar/toolbar-demo.html
index fa7f900c945d..db46064beaa0 100644
--- a/src/demo-app/toolbar/toolbar-demo.html
+++ b/src/demo-app/toolbar/toolbar-demo.html
@@ -1,40 +1,58 @@
 <div class="demo-toolbar">
-
   <p>
     <mat-toolbar>
-      <mat-icon class="demo-toolbar-icon">menu</mat-icon>
-      <span>Default Toolbar</span>
+      <button mat-icon-button>
+        <mat-icon>menu</mat-icon>
+      </button>
 
+      <span>Default Toolbar</span>
       <span class="demo-fill-remaining"></span>
 
-      <mat-icon>code</mat-icon>
+      <button mat-icon-button>
+        <mat-icon>code</mat-icon>
+      </button>
+
+      <button mat-icon-button color="warn">
+        <mat-icon>code</mat-icon>
+      </button>
     </mat-toolbar>
   </p>
 
   <p>
     <mat-toolbar color="primary">
-      <mat-icon class="demo-toolbar-icon">menu</mat-icon>
-      <span>Primary Toolbar</span>
+      <button mat-icon-button>
+        <mat-icon>menu</mat-icon>
+      </button>
 
+      <span>Primary Toolbar</span>
       <span class="demo-fill-remaining"></span>
 
-      <mat-icon>code</mat-icon>
+      <button mat-raised-button>Text</button>
+      <button mat-raised-button color="accent">Accent</button>
     </mat-toolbar>
   </p>
 
   <p>
     <mat-toolbar color="accent">
-      <mat-icon class="demo-toolbar-icon">menu</mat-icon>
-      <span>Accent Toolbar</span>
+      <button mat-icon-button>
+        <mat-icon>menu</mat-icon>
+      </button>
 
+      <span>Accent Toolbar</span>
       <span class="demo-fill-remaining"></span>
 
-      <mat-icon>code</mat-icon>
+      <button mat-raised-button>Text</button>
+      <button mat-mini-fab color="">
+        <mat-icon>done</mat-icon>
+      </button>
+      <button mat-mini-fab color="primary">
+        <mat-icon>done</mat-icon>
+      </button>
     </mat-toolbar>
   </p>
 
   <p>
-    <mat-toolbar color="accent">
+    <mat-toolbar>
       <mat-toolbar-row>First Row</mat-toolbar-row>
       <mat-toolbar-row>Second Row</mat-toolbar-row>
     </mat-toolbar>
diff --git a/src/demo-app/toolbar/toolbar-demo.scss b/src/demo-app/toolbar/toolbar-demo.scss
index a433f45b5cb9..fa679ae89f1f 100644
--- a/src/demo-app/toolbar/toolbar-demo.scss
+++ b/src/demo-app/toolbar/toolbar-demo.scss
@@ -9,4 +9,7 @@
     flex: 1 1 auto;
   }
 
+  button {
+    margin: 0 4px;
+  }
 }
diff --git a/src/lib/button/_button-theme.scss b/src/lib/button/_button-theme.scss
index 661cb8015bec..149a4b6e96ed 100644
--- a/src/lib/button/_button-theme.scss
+++ b/src/lib/button/_button-theme.scss
@@ -76,7 +76,8 @@
   $foreground: map-get($theme, foreground);
 
   .mat-button, .mat-icon-button {
-    background: transparent;
+    color: mat-color($foreground, text);
+    background-color: transparent;
 
     @include _mat-button-focus-color($theme);
     @include _mat-button-theme-color($theme, 'color');
diff --git a/src/lib/button/button.scss b/src/lib/button/button.scss
index 952889dd9a34..70b4e4009b83 100644
--- a/src/lib/button/button.scss
+++ b/src/lib/button/button.scss
@@ -52,7 +52,6 @@
 
 // The text and icon should be vertical aligned inside a button
 .mat-button, .mat-raised-button, .mat-icon-button, .mat-fab, .mat-mini-fab {
-  color: currentColor;
   .mat-button-wrapper > * {
     vertical-align: middle;
   }
diff --git a/src/lib/button/button.spec.ts b/src/lib/button/button.spec.ts
index 846f89563dbd..7b511eeb0818 100644
--- a/src/lib/button/button.spec.ts
+++ b/src/lib/button/button.spec.ts
@@ -2,7 +2,7 @@ import {async, ComponentFixture, TestBed} from '@angular/core/testing';
 import {Component, DebugElement} from '@angular/core';
 import {By} from '@angular/platform-browser';
 import {MatButtonModule, MatButton} from './index';
-import {MatRipple} from '@angular/material/core';
+import {MatRipple, ThemePalette} from '@angular/material/core';
 
 
 describe('MatButton', () => {
@@ -41,6 +41,29 @@ describe('MatButton', () => {
     expect(aDebugElement.nativeElement.classList).not.toContain('mat-accent');
   });
 
+  it('should mark buttons without a background color and theme as plain buttons', () => {
+    const fixture = TestBed.createComponent(TestApp);
+    const buttonDebugEl = fixture.debugElement.query(By.css('button'));
+    const anchorDebugEl = fixture.debugElement.query(By.css('a'));
+    const fabDebugEl = fixture.debugElement.query(By.css('[mat-fab]'));
+
+    fixture.detectChanges();
+
+    // Buttons that have no background color and theme palette are considered as plain buttons.
+    expect(buttonDebugEl.nativeElement.classList).toContain('mat-plain-button');
+    expect(anchorDebugEl.nativeElement.classList).toContain('mat-plain-button');
+    expect(fabDebugEl.nativeElement.classList).not.toContain('mat-plain-button');
+
+    fixture.componentInstance.buttonColor = 'primary';
+    fixture.detectChanges();
+
+    // Buttons that have no background color, but use an explicit theme palette, are not
+    // considered as plain buttons.
+    expect(buttonDebugEl.nativeElement.classList).not.toContain('mat-plain-button');
+    expect(anchorDebugEl.nativeElement.classList).not.toContain('mat-plain-button');
+    expect(fabDebugEl.nativeElement.classList).not.toContain('mat-plain-button');
+  });
+
   it('should expose the ripple instance', () => {
     const fixture = TestBed.createComponent(TestApp);
     const button = fixture.debugElement.query(By.css('button')).componentInstance as MatButton;
@@ -259,6 +282,7 @@ class TestApp {
   clickCount: number = 0;
   isDisabled: boolean = false;
   rippleDisabled: boolean = false;
+  buttonColor: ThemePalette;
 
   increment() {
     this.clickCount++;
diff --git a/src/lib/button/button.ts b/src/lib/button/button.ts
index b68b417c3c97..d3bb04a5f3e5 100644
--- a/src/lib/button/button.ts
+++ b/src/lib/button/button.ts
@@ -103,6 +103,7 @@ export const _MatButtonMixinBase = mixinColor(mixinDisabled(mixinDisableRipple(M
   exportAs: 'matButton',
   host: {
     '[disabled]': 'disabled || null',
+    '[class.mat-plain-button]': '_isPlainButton()',
   },
   templateUrl: 'button.html',
   styleUrls: ['button.css'],
@@ -120,6 +121,9 @@ export class MatButton extends _MatButtonMixinBase
   /** Whether the button is icon button. */
   _isIconButton: boolean = this._hasHostAttributes('mat-icon-button');
 
+  /** Whether the button is a flat button. */
+  _isFlatButton: boolean = this._hasHostAttributes('mat-button');
+
   /** Reference to the MatRipple instance of the button. */
   @ViewChild(MatRipple) ripple: MatRipple;
 
@@ -152,6 +156,14 @@ export class MatButton extends _MatButtonMixinBase
     return this.disableRipple || this.disabled;
   }
 
+  /**
+   * Whether the button is a plain button. Plain buttons are buttons without a background
+   * color and theme color set.
+   */
+  _isPlainButton() {
+    return !this.color && (this._isIconButton || this._isFlatButton);
+  }
+
   /** Gets whether the button has one of the given attributes. */
   _hasHostAttributes(...attributes: string[]) {
     // If not on the browser, say that there are none of the attributes present.
@@ -176,6 +188,7 @@ export class MatButton extends _MatButtonMixinBase
     '[attr.tabindex]': 'disabled ? -1 : 0',
     '[attr.disabled]': 'disabled || null',
     '[attr.aria-disabled]': 'disabled.toString()',
+    '[class.mat-plain-button]': '_isPlainButton()',
     '(click)': '_haltDisabledEvents($event)',
   },
   inputs: ['disabled', 'disableRipple', 'color'],
diff --git a/src/lib/toolbar/toolbar.scss b/src/lib/toolbar/toolbar.scss
index e6b4cb21650b..f8958715a8f3 100644
--- a/src/lib/toolbar/toolbar.scss
+++ b/src/lib/toolbar/toolbar.scss
@@ -30,6 +30,12 @@ $mat-toolbar-row-padding: 16px !default;
   // Per Material specs a toolbar cannot have multiple lines inside of a single row.
   // Disable text wrapping inside of the toolbar. Developers are still able to overwrite it.
   white-space: nowrap;
+
+  // Plain buttons (buttons without a background color and color palette) should inherit the color
+  // from the  toolbar row, because otherwise the text will be unreadable on themed toolbars.
+  .mat-plain-button {
+    color: inherit;
+  }
 }
 
 .mat-toolbar-multiple-rows {