diff --git a/src/vs/editor/common/commands/shiftCommand.ts b/src/vs/editor/common/commands/shiftCommand.ts
index e8cbe85680331f0c449aab23e79ae77a5a5124f2..957f9bc999b6bf7bed49d939944fd90c0578a267 100644
--- a/src/vs/editor/common/commands/shiftCommand.ts
+++ b/src/vs/editor/common/commands/shiftCommand.ts
@@ -61,7 +61,8 @@ export class ShiftCommand implements EditorCommon.ICommand {
 
 		let lineNumber:number,
 			tabSize = this._opts.tabSize,
-			oneIndent = this._opts.oneIndent;
+			oneIndent = this._opts.oneIndent,
+			shouldIndentEmptyLines = (startLine === endLine);
 
 		// indents[i] represents i * oneIndent
 		let indents: string[] = ['', oneIndent];
@@ -85,6 +86,11 @@ export class ShiftCommand implements EditorCommon.ICommand {
 				continue;
 			}
 
+			if (!shouldIndentEmptyLines && !this._opts.isUnshift && lineText.length === 0) {
+				// do not indent empty lines => nothing to do
+				continue;
+			}
+
 			if (indentationEndIndex === -1) {
 				// the entire line is whitespace
 				indentationEndIndex = lineText.length;
diff --git a/src/vs/editor/test/common/commands/shiftCommand.test.ts b/src/vs/editor/test/common/commands/shiftCommand.test.ts
index df580880cf6d43f9897be3a65a90753dbf1ea4b3..1eb460be73ad4b8bc5eef6716336ba8fcdf47be3 100644
--- a/src/vs/editor/test/common/commands/shiftCommand.test.ts
+++ b/src/vs/editor/test/common/commands/shiftCommand.test.ts
@@ -277,10 +277,50 @@ suite('Editor Commands - ShiftCommand', () => {
 				'My First Line',
 				'\t\tMy Second Line',
 				'    Third Line',
-				'\t',
+				'',
+				'\t123'
+			],
+			new Selection(4, 1, 5, 3)
+		);
+	});
+
+	test('issue #1120 TAB should not indent empty lines in a multi-line selection', () => {
+		testShiftCommand(
+			[
+				'My First Line',
+				'\t\tMy Second Line',
+				'    Third Line',
+				'',
+				'123'
+			],
+			new Selection(1, 1, 5, 2),
+			[
+				'\tMy First Line',
+				'\t\t\tMy Second Line',
+				'\t\tThird Line',
+				'',
 				'\t123'
 			],
-			new Selection(4, 2, 5, 3)
+			new Selection(1, 2, 5, 3)
+		);
+
+		testShiftCommand(
+			[
+				'My First Line',
+				'\t\tMy Second Line',
+				'    Third Line',
+				'',
+				'123'
+			],
+			new Selection(4, 1, 5, 1),
+			[
+				'My First Line',
+				'\t\tMy Second Line',
+				'    Third Line',
+				'\t',
+				'123'
+			],
+			new Selection(4, 2, 5, 1)
 		);
 	});
 
@@ -464,7 +504,7 @@ suite('Editor Commands - ShiftCommand', () => {
 				'\tMy First Line',
 				'\tMy Second Line',
 				'\tThird Line',
-				'\t',
+				'',
 				'\t123'
 			],
 			new Selection(1, 2, 5, 5)
@@ -503,13 +543,13 @@ suite('Editor Commands - ShiftCommand', () => {
 			],
 			new Selection(1,1,5,20),
 			[
-				'\t',
+				'',
 				'\t/**',
 				'\t * a doc comment',
 				'\t */',
 				'\tfunction hello() {}'
 			],
-			new Selection(1,2,5,21)
+			new Selection(1,1,5,21)
 		);
 
 		testUnshiftCommandInDocBlockCommentMode(