diff --git a/src/MacVim/Base.lproj/Preferences.xib b/src/MacVim/Base.lproj/Preferences.xib
index 70e38fe872..84216c9283 100644
--- a/src/MacVim/Base.lproj/Preferences.xib
+++ b/src/MacVim/Base.lproj/Preferences.xib
@@ -1,8 +1,8 @@
 <?xml version="1.0" encoding="UTF-8"?>
-<document type="com.apple.InterfaceBuilder3.Cocoa.XIB" version="3.0" toolsVersion="17701" targetRuntime="MacOSX.Cocoa" propertyAccessControl="none" useAutolayout="YES">
+<document type="com.apple.InterfaceBuilder3.Cocoa.XIB" version="3.0" toolsVersion="20037" targetRuntime="MacOSX.Cocoa" propertyAccessControl="none" useAutolayout="YES">
     <dependencies>
         <deployment version="1090" identifier="macosx"/>
-        <plugIn identifier="com.apple.InterfaceBuilder.CocoaPlugin" version="17701"/>
+        <plugIn identifier="com.apple.InterfaceBuilder.CocoaPlugin" version="20037"/>
         <capability name="documents saved in the Xcode 8 format" minToolsVersion="8.0"/>
     </dependencies>
     <objects>
@@ -63,6 +63,7 @@
                                 </column>
                             </cells>
                             <connections>
+                                <action selector="openUntitledWindowChanged:" target="-2" id="S8l-uX-tEl"/>
                                 <binding destination="58" name="selectedTag" keyPath="values.MMUntitledWindow" id="171"/>
                             </connections>
                         </matrix>
@@ -175,6 +176,7 @@
                                 </menu>
                             </popUpButtonCell>
                             <connections>
+                                <action selector="lastWindowClosedChanged:" target="-2" id="IcT-7v-gxr"/>
                                 <binding destination="58" name="selectedIndex" keyPath="values.MMLastWindowClosedBehavior" id="968"/>
                             </connections>
                         </popUpButton>
diff --git a/src/MacVim/MMAppController.m b/src/MacVim/MMAppController.m
index 8a70dec11f..78361af670 100644
--- a/src/MacVim/MMAppController.m
+++ b/src/MacVim/MMAppController.m
@@ -529,6 +529,17 @@ - (void)application:(NSApplication *)sender openFiles:(NSArray *)filenames
 
 - (BOOL)applicationShouldTerminateAfterLastWindowClosed:(NSApplication *)sender
 {
+    if (MMUntitledWindowNever ==
+        [[NSUserDefaults standardUserDefaults]
+         integerForKey:MMUntitledWindowKey]) {
+        // Sanity protection: If we never open a new window on application launch, there could
+        // be an issue here where we immediately terminate MacVim. Because of that, we always
+        // return false regardless of what MMLastWindowClosedBehavior is. Note that the user
+        // should not be able to set these two conflicting options together in the preference pane
+        // but it's possible to do so in the terminal by calling "defaults" manually.
+        return false;
+    }
+
     return (MMTerminateWhenLastWindowClosed ==
             [[NSUserDefaults standardUserDefaults]
                 integerForKey:MMLastWindowClosedBehaviorKey]);
diff --git a/src/MacVim/MMPreferenceController.m b/src/MacVim/MMPreferenceController.m
index ac63f2751b..a5078987fa 100644
--- a/src/MacVim/MMPreferenceController.m
+++ b/src/MacVim/MMPreferenceController.m
@@ -133,4 +133,34 @@ - (IBAction)fontPropertiesChanged:(id)sender
     [[MMAppController sharedInstance] refreshAllFonts];
 }
 
+-(IBAction)lastWindowClosedChanged:(id)sender
+{
+    // Sanity checking for terminate when last window closed + not opening an untitled window.
+    // This results in a potentially awkward situation wehre MacVim will close itself since it
+    // doesn't have any window opened when launched.
+    // Note that the potentially bad behavior is already protected against for in applicationShouldTerminateAfterLastWindowClosed:,
+    // but this sanity checking is to make sure the user can see that in an explicit fashion.
+    NSUserDefaults* defaults = [NSUserDefaults standardUserDefaults];
+    if ([defaults integerForKey:MMLastWindowClosedBehaviorKey] == MMTerminateWhenLastWindowClosed) {
+        if ([defaults integerForKey:MMUntitledWindowKey] == MMUntitledWindowNever) {
+            [defaults setInteger:MMUntitledWindowOnOpen forKey:MMUntitledWindowKey];
+        }
+    }
+}
+
+-(IBAction)openUntitledWindowChanged:(id)sender
+{
+    // Sanity checking for terminate when last window closed + not opening an untitled window.
+    // This results in a potentially awkward situation wehre MacVim will close itself since it
+    // doesn't have any window opened when launched.
+    // Note that the potentially bad behavior is already protected against for in applicationShouldTerminateAfterLastWindowClosed:,
+    // but this sanity checking is to make sure the user can see that in an explicit fashion.
+    NSUserDefaults* defaults = [NSUserDefaults standardUserDefaults];
+    if ([defaults integerForKey:MMLastWindowClosedBehaviorKey] == MMTerminateWhenLastWindowClosed) {
+        if ([defaults integerForKey:MMUntitledWindowKey] == MMUntitledWindowNever) {
+            [defaults setInteger:MMHideWhenLastWindowClosed forKey:MMLastWindowClosedBehaviorKey];
+        }
+    }
+}
+
 @end