diff --git a/src/components/datepicker/js/calendar.js b/src/components/datepicker/js/calendar.js
index e2423e4274b..004303a50ac 100644
--- a/src/components/datepicker/js/calendar.js
+++ b/src/components/datepicker/js/calendar.js
@@ -301,7 +301,7 @@
   /**
    * Sets up the controller's reference to ngModelController.
    * @param {!ngModel.NgModelController} ngModelCtrl Instance of the ngModel controller.
-   * @param {Object} inputDirective Config for Angular's `input` directive.
+   * @param {Object} inputDirective Config for AngularJS's `input` directive.
    */
   CalendarCtrl.prototype.configureNgModel = function(ngModelCtrl, inputDirective) {
     var self = this;
@@ -326,7 +326,7 @@
       // In the case where a conversion is needed, the $viewValue here will be a string like
       // "2020-05-10" instead of a Date object.
       if (!self.dateUtil.isValidDate(value)) {
-        convertedDate = self.dateUtil.removeLocalTzAndReparseDate(new Date(this.$viewValue));
+        convertedDate = self.dateUtil.removeLocalTzAndReparseDate(new Date(value));
         if (self.dateUtil.isValidDate(convertedDate)) {
           value = convertedDate;
         }
@@ -360,7 +360,13 @@
     var value = this.dateUtil.createDateAtMidnight(date);
     this.focusDate(value);
     this.$scope.$emit('md-calendar-change', value);
-    this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd', timezone), 'default');
+    // Using the timezone when the offset is negative (GMT+X) causes the previous day to be
+    // selected here. This check avoids that.
+    if (timezone == null || value.getTimezoneOffset() < 0) {
+      this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd'), 'default');
+    } else {
+      this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd', timezone), 'default');
+    }
     this.ngModelCtrl.$render();
     return value;
   };
diff --git a/src/components/datepicker/js/dateUtil.js b/src/components/datepicker/js/dateUtil.js
index b848d1e0e2a..9836bbafb2d 100644
--- a/src/components/datepicker/js/dateUtil.js
+++ b/src/components/datepicker/js/dateUtil.js
@@ -311,15 +311,10 @@
 
     /**
      * @param {Date} value date in local timezone
-     * @return {Date} date with local timezone removed
+     * @return {Date} date with local timezone offset removed
      */
     function removeLocalTzAndReparseDate(value) {
-      var dateValue, formattedDate;
-      // Remove the local timezone offset before calling formatDate.
-      dateValue = new Date(value.getTime() + 60000 * value.getTimezoneOffset());
-      formattedDate = $mdDateLocale.formatDate(dateValue);
-      // parseDate only works with a date formatted by formatDate when using Moment validation.
-      return $mdDateLocale.parseDate(formattedDate);
+      return $mdDateLocale.parseDate(value.getTime() + 60000 * value.getTimezoneOffset());
     }
   });
 })();
diff --git a/src/components/datepicker/js/datepickerDirective.js b/src/components/datepicker/js/datepickerDirective.js
index 48dedf72d06..cf4903c14ac 100644
--- a/src/components/datepicker/js/datepickerDirective.js
+++ b/src/components/datepicker/js/datepickerDirective.js
@@ -990,7 +990,13 @@
    */
   DatePickerCtrl.prototype.setModelValue = function(value) {
     var timezone = this.$mdUtil.getModelOption(this.ngModelCtrl, 'timezone');
-    this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd', timezone), 'default');
+    // Using the timezone when the offset is negative (GMT+X) causes the previous day to be
+    // set as the model value here. This check avoids that.
+    if (timezone == null || value.getTimezoneOffset() < 0) {
+      this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd'), 'default');
+    } else {
+      this.ngModelCtrl.$setViewValue(this.ngDateFilter(value, 'yyyy-MM-dd', timezone), 'default');
+    }
   };
 
   /**
@@ -1001,12 +1007,18 @@
     var self = this;
     var timezone = this.$mdUtil.getModelOption(this.ngModelCtrl, 'timezone');
 
-    if (this.dateUtil.isValidDate(value) && timezone != null) {
+    if (this.dateUtil.isValidDate(value) && timezone != null && value.getTimezoneOffset() >= 0) {
       this.date = this.dateUtil.removeLocalTzAndReparseDate(value);
     } else {
       this.date = value;
     }
-    this.inputElement.value = this.locale.formatDate(value, timezone);
+    // Using the timezone when the offset is negative (GMT+X) causes the previous day to be
+    // used here. This check avoids that.
+    if (timezone == null || value.getTimezoneOffset() < 0) {
+      this.inputElement.value = this.locale.formatDate(value);
+    } else {
+      this.inputElement.value = this.locale.formatDate(value, timezone);
+    }
     this.mdInputContainer && this.mdInputContainer.setHasValue(!!value);
     this.resizeInputElement();
     // This is often called from the $formatters section of the $validators pipeline.