diff --git a/src/ng/directive/ngOptions.js b/src/ng/directive/ngOptions.js
index 405c8879da3f..282dff3aedd2 100644
--- a/src/ng/directive/ngOptions.js
+++ b/src/ng/directive/ngOptions.js
@@ -626,7 +626,10 @@ var ngOptionsDirective = ['$compile', '$parse', function($compile, $parse) {
         if (emptyOption_ || unknownOption_) {
           while (current &&
                 (current === emptyOption_ ||
-                current === unknownOption_)) {
+                current === unknownOption_ ||
+                emptyOption_ && emptyOption_.nodeType === NODE_TYPE_COMMENT)) {
+            // Empty options might have directives that transclude
+            // and insert comments (e.g. ngIf)
             current = current.nextSibling;
           }
         }
diff --git a/test/ng/directive/ngOptionsSpec.js b/test/ng/directive/ngOptionsSpec.js
index a5172bf3fc3a..e9b512f7cbf4 100644
--- a/test/ng/directive/ngOptionsSpec.js
+++ b/test/ng/directive/ngOptionsSpec.js
@@ -2093,6 +2093,30 @@ describe('ngOptions', function() {
       expect(element[0].selectedIndex).toEqual(0);
       expect(scope.selected).toEqual([]);
     });
+
+
+    it('should be possible to use ngIf in the blank option', function() {
+      var option;
+      createSingleSelect('<option ng-if="isBlank" value="">blank</option>');
+
+      scope.$apply(function() {
+        scope.values = [{name: 'A'}];
+        scope.isBlank = true;
+      });
+
+      expect(element.find('option').length).toBe(2);
+      option = element.find('option').eq(0);
+      expect(option.val()).toBe('');
+      expect(option.text()).toBe('blank');
+
+      scope.$apply(function() {
+        scope.isBlank = false;
+      });
+
+      expect(element.find('option').length).toBe(1);
+      option = element.find('option').eq(0);
+      expect(option.text()).toBe('A');
+    });
   });