diff --git a/modules/angular2_material/src/components/button/button.scss b/modules/angular2_material/src/components/button/button.scss
index 68f45f2a77..c248315dc1 100644
--- a/modules/angular2_material/src/components/button/button.scss
+++ b/modules/angular2_material/src/components/button/button.scss
@@ -4,6 +4,10 @@
 // TODO(jelbourn): This goes away.
 @import "../../core/style/default-theme";
 
+// TODO(jelbourn): Move variables and mixins into a partial file.
+// TODO(jelbourn): Measure perf benefits for translate3d and will-change.
+// TODO(jelbourn): Figure out if anchor hover underline actually happens in any browser.
+
 
 // Standard button sizing.
 $md-button-padding: 0 rem(0.600) !default;
@@ -19,7 +23,7 @@ $md-fab-padding: rem(1.60) !default;
 $md-fab-mini-size: rem(4.00) !default;
 $md-fab-mini-line-height: rem(4.00) !default;
 
-/** Mixin to create distinct classes for fab positions, e.g. ".md-fab-bottom-right". */
+/** Mixin to create distinct classes for fab positions, e.g. ".md-fab-position-bottom-right". */
 @mixin md-fab-position($spot, $top: auto, $right: auto, $bottom: auto, $left: auto) {
   .md-fab-position-#{$spot} {
     top: $top;
@@ -30,14 +34,17 @@ $md-fab-mini-line-height: rem(4.00) !default;
   }
 }
 
-// Base styles for all buttons.
+/** Styles for all disabled buttons. */
+@mixin md-button-disabled() {
+  color: md-color($md-foreground, disabled);
+  background-color: transparent;
+  cursor: default;
+}
+
+/** Base styles for all buttons. */
 @mixin md-button-base() {
   box-sizing: border-box;
   position: relative;
-  display: inline-block;
-
-  font-size: $md-body-font-size-base;
-  font-weight: 500;
 
   // Reset browser <button> styles.
   background: transparent;
@@ -48,9 +55,15 @@ $md-fab-mini-line-height: rem(4.00) !default;
   outline: none;
   border: none;
 
-  // Apply nowrap and remove underline for anchor md-buttons.
+  // Make anchors render like buttons.
+  display: inline-block;
   white-space: nowrap;
   text-decoration: none;
+  vertical-align: middle;
+
+  // Typography.
+  font-size: $md-body-font-size-base;
+  font-weight: 500;
 
   // Sizing.
   padding: $md-button-padding;
@@ -60,10 +73,10 @@ $md-fab-mini-line-height: rem(4.00) !default;
   border-radius: $md-button-border-radius;
 
   // Animation.
-  // TODO(jelbourn): figure out where will-change would be beneficial.
-  transition: background $swift-ease-out-duration $swift-ease-out-timing-function;
+  transition: background $swift-ease-out-duration $swift-ease-out-timing-function,
+              box-shadow $swift-ease-out-duration $swift-ease-out-timing-function;
 
-  // Hide the default browser focus indicator.
+  // Hide the browser focus indicator, instead applying our own focus style on background-color.
   &:focus {
     outline: none;
   }
@@ -71,7 +84,11 @@ $md-fab-mini-line-height: rem(4.00) !default;
   &:hover, &:focus {
     // Remove anchor underline again for more specific modifiers.
     text-decoration: none;
+  }
 
+  // Use a CSS class for focus style because we only want to render the focus style when
+  // the focus originated from a keyboard event (see JS source for more details).
+  &:hover, &.md-button-focus {
     background: md-color($md-background, 500, 0.2);
   }
 
@@ -83,10 +100,10 @@ $md-fab-mini-line-height: rem(4.00) !default;
     color: md-color($md-accent);
   }
 
-  &:disabled {
-    color: md-color($md-foreground, disabled);
-    background-color: transparent;
-    cursor: default;
+  // Use the [disabled] attribute instead of the :disabled pseudo-class because anchors
+  // cannot technically be :disabled.
+  &[disabled] {
+    @include md-button-disabled();
   }
 }
 
@@ -95,29 +112,40 @@ $md-fab-mini-line-height: rem(4.00) !default;
   @include md-button-base();
 
   // Force hardware acceleration.
-  // TODO(jelbourn): determine if this actually has an impact.
   transform: translate3d(0, 0, 0);
-  box-shadow: $md-shadow-bottom-z-1;
 
-  transition: background $swift-ease-out-duration $swift-ease-out-timing-function,
-              box-shadow $swift-ease-out-duration $swift-ease-out-timing-function;
+  box-shadow: $md-shadow-bottom-z-1;
 
   &:active {
     box-shadow: $md-shadow-bottom-z-2;
   }
 
-  &:disabled {
+  &[disabled] {
     box-shadow: none;
   }
 
   &.md-primary {
     color: md-color($md-primary, default-contrast);
     background-color: md-color($md-primary);
+
+    &:hover, &.md-button-focus {
+      background-color: md-color($md-primary, 600);
+    }
   }
 
   &.md-accent {
     color: md-color($md-accent, default-contrast);
     background-color: md-color($md-accent);
+
+    &:hover, &.md-button-focus {
+      background-color: md-color($md-accent, A700);
+    }
+  }
+
+  &.md-primary, &.md-accent {
+    &[disabled] {
+      @include md-button-disabled();
+    }
   }
 }
 
@@ -145,8 +173,6 @@ $md-fab-mini-line-height: rem(4.00) !default;
   line-height: $md-fab-line-height;
   vertical-align: middle;
 
-  // TODO(jelbourn): May need `background-clip: padding-box;` depending on ripple implementation.
-
   &.md-mini {
     line-height: $md-fab-mini-line-height;
     width: $md-fab-mini-size;
diff --git a/modules/angular2_material/src/components/button/button.ts b/modules/angular2_material/src/components/button/button.ts
index 222c24fb56..72a49969f2 100644
--- a/modules/angular2_material/src/components/button/button.ts
+++ b/modules/angular2_material/src/components/button/button.ts
@@ -1,36 +1,86 @@
 import {Component, View, LifecycleEvent, ViewEncapsulation} from 'angular2/angular2';
+
+import {TimerWrapper} from 'angular2/src/facade/async';
 import {isPresent} from 'angular2/src/facade/lang';
 
+// TODO(jelbourn): Ink ripples.
+// TODO(jelbourn): Make the `isMosueDown` stuff done with one global listener.
 
-@Component({selector: '[md-button]:not(a), [md-fab]:not(a), [md-raised-button]:not(a)'})
+@Component({
+  selector: '[md-button]:not(a), [md-fab]:not(a), [md-raised-button]:not(a)',
+  host: {
+    '(^mousedown)': 'onMousedown()',
+    '(focus)': 'onFocus()',
+    '(blur)': 'onBlur()',
+    '[class.md-button-focus]': 'isKeyboardFocused',
+  },
+})
 @View({
   templateUrl: 'package:angular2_material/src/components/button/button.html',
-  encapsulation: ViewEncapsulation.NONE
+  encapsulation: ViewEncapsulation.NONE,
 })
 export class MdButton {
-  // TODO(jelbourn): Ink ripples.
+  /** Whether a mousedown has occured on this element in the last 100ms. */
+  isMouseDown: boolean = false;
+
+  /** Whether the button has focus from the keyboard (not the mouse). Used for class binding. */
+  isKeyboardFocused: boolean = false;
+
+  onMousedown() {
+    // We only *show* the focus style when focus has come to the button via the keyboard.
+    // The Material Design spec is silent on this topic, and without doing this, the
+    // button continues to look :active after clicking.
+    // @see http://marcysutton.com/button-focus-hell/
+    this.isMouseDown = true;
+    TimerWrapper.setTimeout(() => {this.isMouseDown = false}, 100);
+  }
+
+  onFocus() {
+    this.isKeyboardFocused = !this.isMouseDown;
+  }
+
+  onBlur() {
+    this.isKeyboardFocused = false;
+  }
 }
 
 
 @Component({
-  selector: '[md-button][href]',
+  selector: 'a[md-button], a[md-raised-button], a[md-fab]',
   properties: ['disabled'],
-  host: {'(click)': 'onClick($event)', '[tabIndex]': 'tabIndex'},
-  lifecycle: [LifecycleEvent.onChange]
+  lifecycle: [LifecycleEvent.onChange],
+  host: {
+    '(^click)': 'onClick($event)',
+    '(^mousedown)': 'onMousedown()',
+    '(focus)': 'onFocus()',
+    '(blur)': 'onBlur()',
+    '[tabIndex]': 'tabIndex',
+    '[class.md-button-focus]': 'isKeyboardFocused',
+    '[attr.aria-disabled]': 'disabled',
+  },
 })
 @View({
   templateUrl: 'package:angular2_material/src/components/button/button.html',
   encapsulation: ViewEncapsulation.NONE
 })
-export class MdAnchor {
+export class MdAnchor extends MdButton {
   tabIndex: number;
 
   /** Whether the component is disabled. */
-  disabled: boolean;
+  disabled_: boolean;
+
+  get disabled(): boolean {
+    return this.disabled_;
+  }
+
+  set disabled(value) {
+    // The presence of *any* disabled value makes the component disabled, *except* for false.
+    this.disabled_ = isPresent(value) && this.disabled !== false;
+  }
 
   onClick(event) {
     // A disabled anchor shouldn't navigate anywhere.
-    if (isPresent(this.disabled) && this.disabled !== false) {
+    if (this.disabled) {
       event.preventDefault();
     }
   }
diff --git a/modules/examples/src/material/button/demo_app.html b/modules/examples/src/material/button/demo_app.html
index 99f1130196..e91a57c06e 100644
--- a/modules/examples/src/material/button/demo_app.html
+++ b/modules/examples/src/material/button/demo_app.html
@@ -7,6 +7,7 @@
     position: relative !important;
     padding-bottom: 10px;
   }
+
   .label {
     position: absolute;
     bottom: 5px;
@@ -14,6 +15,16 @@
     color: #ccc;
     font-size: 14px;
   }
+
+  .custom {
+    background-color: #ae0001;
+    color: #eeba30;
+  }
+
+  .custom:hover, .custom.md-button-focus {
+    background-color: #740001;
+    color: #d3a625;
+  }
 </style>
 
 <h1>Button demo</h1>
@@ -40,6 +51,7 @@
   <button md-button disabled="disabled" (^click)="click('disabled')">DISABLED</button>
   <button md-button class="md-accent" (^click)="click('accent')">ACCENT</button>
   <button md-button class="md-warn" (^click)="click('warn')">WARN</button>
+  <button md-button class="custom" (^click)="click('custom')">CUSTOM</button>
 </section>
 
 <section>
@@ -49,6 +61,7 @@
   <button md-raised-button disabled="disabled" (^click)="click('raised disabled')">DISABLED</button>
   <button md-raised-button class="md-accent" (^click)="click('raised accent')">ACCENT</button>
   <button md-raised-button class="md-warn" (^click)="click('raised warn')">WARN</button>
+  <button md-raised-button class="custom" (^click)="click('custom raised')">CUSTOM</button>
 </section>
 <section>
   <span class="label">Fab button</span>
@@ -57,6 +70,7 @@
   <button md-fab disabled="disabled" (^click)="click('fab disabled')">DIS</button>
   <button md-fab class="md-accent" (^click)="click('fab accent')">ACC</button>
   <button md-fab class="md-warn" (^click)="click('fab warn')">WRN</button>
+  <button md-fab class="custom" (^click)="click('custom fab')">CSTM</button>
 </section>
 <section>
   <span class="label">Anchor / hyperlink</span>
@@ -65,9 +79,10 @@
   <a md-raised-button target="_blank" href="http://google.com">RAISED HREF</a>
 </section>
 
+<section dir="rtl">
+  <span class="label" dir="ltr">Right-to-left</span>
+  <button md-button (^click)="click('Hebrew button')">לחצן</button>
+  <button md-raised-button (^click)="click('Hebrew raised button')">העלה</button>
+  <a md-button href="http://translate.google.com">עוגן</a>
+</section>
 
-<p template="ng-for #item of items">
-  Repeated button:
-  <button md-button tabindex="-1" (^click)="increment()">{{action}}</button>
-  {{clickCount}}
-</p>