diff --git a/ui-v2/app/components/phrase-editor.js b/ui-v2/app/components/phrase-editor.js
index e280b571c1e9..4eb7bce817fc 100644
--- a/ui-v2/app/components/phrase-editor.js
+++ b/ui-v2/app/components/phrase-editor.js
@@ -1,44 +1,67 @@
 import Component from '@ember/component';
 import { get, set } from '@ember/object';
+import { inject as service } from '@ember/service';
 
 export default Component.extend({
+  dom: service('dom'),
   classNames: ['phrase-editor'],
   item: '',
-  remove: function(index, e) {
-    this.items.removeAt(index, 1);
-    this.onchange(e);
+  didInsertElement: function() {
+    this._super(...arguments);
+    // TODO: use {{ref}}
+    this.input = get(this, 'dom').element('input', this.element);
   },
-  add: function(e) {
-    const value = get(this, 'item').trim();
-    if (value !== '') {
-      set(this, 'item', '');
-      const currentItems = get(this, 'items') || [];
-      const items = new Set(currentItems).add(value);
-      if (items.size > currentItems.length) {
-        set(this, 'items', [...items]);
-        this.onchange(e);
+  onchange: function(e) {},
+  search: function(e) {
+    // TODO: Temporarily continue supporting `searchable`
+    let searchable = get(this, 'searchable');
+    if (searchable) {
+      if (!Array.isArray(searchable)) {
+        searchable = [searchable];
       }
+      searchable.forEach(item => {
+        item.search(get(this, 'value'));
+      });
     }
+    this.onchange(e);
   },
-  onkeydown: function(e) {
-    switch (e.keyCode) {
-      case 8:
-        if (e.target.value == '' && this.items.length > 0) {
-          this.remove(this.items.length - 1);
+  oninput: function(e) {},
+  onkeydown: function(e) {},
+  actions: {
+    keydown: function(e) {
+      switch (e.keyCode) {
+        case 8: // backspace
+          if (e.target.value == '' && get(this, 'value').length > 0) {
+            this.actions.remove.bind(this)(get(this, 'value').length - 1);
+          }
+          break;
+        case 27: // escape
+          set(this, 'value', []);
+          this.search({ target: this });
+          break;
+      }
+      this.onkeydown({ target: this });
+    },
+    input: function(e) {
+      set(this, 'item', e.target.value);
+      this.oninput({ target: this });
+    },
+    remove: function(index, e) {
+      get(this, 'value').removeAt(index, 1);
+      this.search({ target: this });
+      this.input.focus();
+    },
+    add: function(e) {
+      const item = get(this, 'item').trim();
+      if (item !== '') {
+        set(this, 'item', '');
+        const currentItems = get(this, 'value') || [];
+        const items = new Set(currentItems).add(item);
+        if (items.size > currentItems.length) {
+          set(this, 'value', [...items]);
+          this.search({ target: this });
         }
-        break;
-    }
-  },
-  oninput: function(e) {
-    set(this, 'item', e.target.value);
-  },
-  onchange: function(e) {
-    let searchable = get(this, 'searchable');
-    if (!Array.isArray(searchable)) {
-      searchable = [searchable];
-    }
-    searchable.forEach(item => {
-      item.search(get(this, 'items'));
-    });
+      }
+    },
   },
 });
diff --git a/ui-v2/app/styles/base/components/pill/layout.scss b/ui-v2/app/styles/base/components/pill/layout.scss
index 6b4b05f39b12..95b1e132ea81 100644
--- a/ui-v2/app/styles/base/components/pill/layout.scss
+++ b/ui-v2/app/styles/base/components/pill/layout.scss
@@ -8,4 +8,5 @@
   padding: 0;
   height: 10px;
   margin-right: 3px;
+  font-size: 0;
 }
diff --git a/ui-v2/app/templates/components/phrase-editor.hbs b/ui-v2/app/templates/components/phrase-editor.hbs
index 480849c5f979..d0e8d5e74ed1 100644
--- a/ui-v2/app/templates/components/phrase-editor.hbs
+++ b/ui-v2/app/templates/components/phrase-editor.hbs
@@ -1,11 +1,11 @@
-<ul>
-  {{#each items as |item index|}}
-    <li>
-      <button type="button" onclick={{action remove index}}>Remove</button>{{item}}
-    </li>
-  {{/each}}
-</ul>
-<label class="type-search">
+  <ul>
+      {{#each value as |item index|}}
+        <li>
+          <button type="button" {{action 'remove' index}}>Remove</button>{{item}}
+        </li>
+      {{/each}}
+  </ul>
+  <label class="type-search">
     <span>Search</span>
-    <input onchange={{action add}} onsearch={{action add}} oninput={{action oninput}} onkeydown={{action onkeydown}} placeholder="{{placeholder}}" value="{{item}}" type="search" name="s" autofocus="autofocus" />
-</label>
\ No newline at end of file
+    <input onchange={{action 'add'}} onsearch={{action 'add'}} oninput={{action 'input'}} onkeydown={{action 'keydown'}} placeholder={{if (eq value.length 0) placeholder}} value={{item}} type="search" name="s" autofocus="autofocus" />
+  </label>
\ No newline at end of file
diff --git a/ui-v2/app/templates/dc/services/index.hbs b/ui-v2/app/templates/dc/services/index.hbs
index eb323e1a4acb..6a1cf8de7282 100644
--- a/ui-v2/app/templates/dc/services/index.hbs
+++ b/ui-v2/app/templates/dc/services/index.hbs
@@ -10,7 +10,12 @@
     {{/block-slot}}
     {{#block-slot 'toolbar'}}
 {{#if (gt items.length 0) }}
-    {{#phrase-editor placeholder=(if (eq terms.length 0) 'service:name tag:name status:critical search-term' '') items=terms searchable=searchable}}{{/phrase-editor}}
+      {{phrase-editor
+        placeholder='service:name tag:name status:critical search-term'
+        value=(slice 0 terms.length terms)
+        onchange=(action (mut terms) value='target.value')
+        searchable=searchable
+      }}
 {{/if}}
     {{/block-slot}}
     {{#block-slot 'content'}}
diff --git a/ui-v2/tests/integration/components/phrase-editor-test.js b/ui-v2/tests/integration/components/phrase-editor-test.js
index 1ce41299bd57..5d8de0aa3bee 100644
--- a/ui-v2/tests/integration/components/phrase-editor-test.js
+++ b/ui-v2/tests/integration/components/phrase-editor-test.js
@@ -5,30 +5,45 @@ moduleForComponent('phrase-editor', 'Integration | Component | phrase editor', {
   integration: true,
 });
 
-test('it renders', function(assert) {
-  // Set any properties with this.set('myProperty', 'value');
-  // Handle any actions with this.on('myAction', function(val) { ... });
-
-  this.render(hbs`{{phrase-editor}}`);
-
-  assert.equal(
+test('it renders a phrase', function(assert) {
+  this.set('value', ['phrase']);
+  this.render(hbs`{{phrase-editor value=value}}`);
+  assert.notEqual(
     this.$()
       .text()
-      .trim(),
-    'Search'
+      .trim()
+      .indexOf('phrase'),
+    -1
   );
-
-  // Template block usage:
-  this.render(hbs`
-    {{#phrase-editor}}
-      template block text
-    {{/phrase-editor}}
-  `);
-
-  assert.equal(
+});
+test('it calls onchange when a phrase is removed by clicking the phrase remove button and refocuses', function(assert) {
+  assert.expect(3);
+  this.set('value', ['phrase']);
+  this.on('change', function(e) {
+    assert.equal(e.target.value.length, 0);
+  });
+  this.render(hbs`{{phrase-editor value=value onchange=(action 'change')}}`);
+  assert.notEqual(
     this.$()
       .text()
-      .trim(),
-    'Search'
+      .trim()
+      .indexOf('phrase'),
+    -1
   );
+  const $input = this.$('input');
+  const $button = this.$('button');
+  $button.trigger('click');
+  assert.equal(document.activeElement, $input.get(0));
+});
+test('it calls onchange when a phrase is added', function(assert) {
+  assert.expect(1);
+  this.on('change', function(e) {
+    assert.equal(e.target.value.length, 2);
+  });
+  this.set('value', ['phrase']);
+  this.render(hbs`{{phrase-editor value=value onchange=(action 'change')}}`);
+  const $input = this.$('input');
+  $input.get(0).value = 'phrase 2';
+  $input.trigger('input');
+  $input.trigger('search');
 });