diff --git a/rxjava-core/src/main/java/rx/Observable.java b/rxjava-core/src/main/java/rx/Observable.java
index c21913f86a..667ec0db79 100644
--- a/rxjava-core/src/main/java/rx/Observable.java
+++ b/rxjava-core/src/main/java/rx/Observable.java
@@ -36,6 +36,7 @@
 import rx.operators.OperationCombineLatest;
 import rx.operators.OperationConcat;
 import rx.operators.OperationDebounce;
+import rx.operators.OperationDefaultIfEmpty;
 import rx.operators.OperationDefer;
 import rx.operators.OperationDematerialize;
 import rx.operators.OperationDistinct;
@@ -3864,6 +3865,21 @@ public Observable<T> firstOrDefault(Func1<? super T, Boolean> predicate, T defau
         return create(OperationFirstOrDefault.firstOrDefault(this, predicate, defaultValue));
     }
 
+    /**
+     * Returns the elements of the specified sequence or the specified default
+     * value in a singleton sequence if the sequence is empty.
+     *
+     * @param defaultValue
+     *            The value to return if the sequence is empty.
+     * @return An observable sequence that contains the specified default value
+     *         if the source is empty; otherwise, the elements of the source
+     *         itself.
+     *
+     * @see <a href="http://msdn.microsoft.com/en-us/library/hh229624(v=vs.103).aspx">MSDN: Observable.DefaultIfEmpty</a>
+     */
+    public Observable<T> defaultIfEmpty(T defaultValue) {
+        return create(OperationDefaultIfEmpty.defaultIfEmpty(this, defaultValue));
+    }
     
     /**
      * Returns an Observable that emits only the first <code>num</code> items emitted by the source
diff --git a/rxjava-core/src/main/java/rx/operators/OperationDefaultIfEmpty.java b/rxjava-core/src/main/java/rx/operators/OperationDefaultIfEmpty.java
new file mode 100644
index 0000000000..195422dadc
--- /dev/null
+++ b/rxjava-core/src/main/java/rx/operators/OperationDefaultIfEmpty.java
@@ -0,0 +1,122 @@
+package rx.operators;
+
+import static org.mockito.Mockito.mock;
+import static org.mockito.Mockito.never;
+import static org.mockito.Mockito.times;
+import static org.mockito.Mockito.verify;
+
+import org.junit.Test;
+
+import rx.Observable;
+import rx.Observable.OnSubscribeFunc;
+import rx.Observer;
+import rx.Subscription;
+
+/**
+ * Returns the elements of the specified sequence or the specified default value
+ * in a singleton sequence if the sequence is empty.
+ */
+public class OperationDefaultIfEmpty {
+
+    /**
+     * Returns the elements of the specified sequence or the specified default
+     * value in a singleton sequence if the sequence is empty.
+     *
+     * @param source
+     *            The sequence to return the specified value for if it is empty.
+     * @param defaultValue
+     *            The value to return if the sequence is empty.
+     * @return An observable sequence that contains the specified default value
+     *         if the source is empty; otherwise, the elements of the source
+     *         itself.
+     */
+    public static <T> OnSubscribeFunc<T> defaultIfEmpty(
+            Observable<? extends T> source, T defaultValue) {
+        return new DefaultIfEmpty<T>(source, defaultValue);
+    }
+
+    private static class DefaultIfEmpty<T> implements OnSubscribeFunc<T> {
+
+        private final Observable<? extends T> source;
+        private final T defaultValue;
+
+        private DefaultIfEmpty(Observable<? extends T> source, T defaultValue) {
+            this.source = source;
+            this.defaultValue = defaultValue;
+        }
+
+        @Override
+        public Subscription onSubscribe(final Observer<? super T> observer) {
+            final SafeObservableSubscription subscription = new SafeObservableSubscription();
+            return subscription.wrap(source.subscribe(new Observer<T>() {
+
+                private volatile boolean hasEmitted = false;
+
+                @Override
+                public void onNext(T value) {
+                    try {
+                        hasEmitted = true;
+                        observer.onNext(value);
+                    } catch (Throwable ex) {
+                        observer.onError(ex);
+                        // this will work if the sequence is asynchronous, it
+                        // will have no effect on a synchronous observable
+                        subscription.unsubscribe();
+                    }
+                }
+
+                @Override
+                public void onError(Throwable ex) {
+                    observer.onError(ex);
+                }
+
+                @Override
+                public void onCompleted() {
+                    if (hasEmitted) {
+                        observer.onCompleted();
+                    } else {
+                        observer.onNext(defaultValue);
+                        observer.onCompleted();
+                    }
+                }
+            }));
+        }
+    }
+
+    public static class UnitTest {
+
+        @Test
+        public void testDefaultIfEmpty() {
+            Observable<Integer> source = Observable.from(1, 2, 3);
+            Observable<Integer> observable = Observable.create(defaultIfEmpty(
+                    source, 10));
+
+            @SuppressWarnings("unchecked")
+            Observer<Integer> aObserver = mock(Observer.class);
+            observable.subscribe(aObserver);
+            verify(aObserver, never()).onNext(10);
+            verify(aObserver, times(1)).onNext(1);
+            verify(aObserver, times(1)).onNext(2);
+            verify(aObserver, times(1)).onNext(3);
+            verify(aObserver, never()).onError(
+                    org.mockito.Matchers.any(Throwable.class));
+            verify(aObserver, times(1)).onCompleted();
+        }
+
+        @Test
+        public void testDefaultIfEmptyWithEmpty() {
+            Observable<Integer> source = Observable.empty();
+            Observable<Integer> observable = Observable.create(defaultIfEmpty(
+                    source, 10));
+
+            @SuppressWarnings("unchecked")
+            Observer<Integer> aObserver = mock(Observer.class);
+            observable.subscribe(aObserver);
+            verify(aObserver, times(1)).onNext(10);
+            verify(aObserver, never()).onError(
+                    org.mockito.Matchers.any(Throwable.class));
+            verify(aObserver, times(1)).onCompleted();
+        }
+
+    }
+}