diff --git a/src/vs/platform/keybinding/common/keybindingResolver.ts b/src/vs/platform/keybinding/common/keybindingResolver.ts
index 722f736923f45d3ab75264f2ff99152b4e46ecab..ec6b0cbfbf35b429f1293049fcdce9c37ab83743 100644
--- a/src/vs/platform/keybinding/common/keybindingResolver.ts
+++ b/src/vs/platform/keybinding/common/keybindingResolver.ts
@@ -36,6 +36,7 @@ export class NormalizedKeybindingItem {
 	command: string;
 	when: KbExpr;
 	isDefault: boolean;
+	actualCommand: string;
 
 	public static fromKeybindingItem(source:IKeybindingItem, isDefault:boolean): NormalizedKeybindingItem {
 		let when: KbExpr = null;
@@ -48,6 +49,7 @@ export class NormalizedKeybindingItem {
 	constructor(keybinding: number, command: string, when: KbExpr, isDefault: boolean) {
 		this.keybinding = keybinding;
 		this.command = command;
+		this.actualCommand = this.command ? this.command.replace(/^\^/, '') : this.command;
 		this.when = when;
 		this.isDefault = isDefault;
 	}
@@ -115,7 +117,7 @@ export class KeybindingResolver {
 	}
 
 	private static _isTargetedForRemoval(defaultKb:NormalizedKeybindingItem, keybinding:number, command:string, when:KbExpr): boolean {
-		if (defaultKb.command !== command) {
+		if (defaultKb.actualCommand !== command) {
 			return false;
 		}
 		if (keybinding) {
diff --git a/src/vs/platform/keybinding/test/common/keybindingService.test.ts b/src/vs/platform/keybinding/test/common/keybindingService.test.ts
index e00279c2f54e0d59cf4171849a4756cf0993ff28..cef8b12bd9e8529dd05b0cd9a13349b7674e9af7 100644
--- a/src/vs/platform/keybinding/test/common/keybindingService.test.ts
+++ b/src/vs/platform/keybinding/test/common/keybindingService.test.ts
@@ -271,6 +271,33 @@ suite('Keybinding Service', () => {
 		]);
 	});
 
+	test('issue #612#issuecomment-222109084 cannot remove keybindings for commands with ^', function() {
+		let defaults:IKeybindingItem[] = [{
+			command: '^yes1',
+			when: KbExpr.equals('1', 'a'),
+			keybinding: KeyCode.KEY_A,
+			weight1: 0,
+			weight2: 0
+		}, {
+			command: 'yes2',
+			when: KbExpr.equals('2', 'b'),
+			keybinding: KeyCode.KEY_B,
+			weight1: 0,
+			weight2: 0
+		}];
+		let overrides:IKeybindingItem[] = [{
+			command: '-yes1',
+			when: null,
+			keybinding: KeyCode.KEY_A,
+			weight1: 0,
+			weight2: 0
+		}];
+		let actual = KeybindingResolver.combine(defaults, overrides);
+		assert.deepEqual(actual, [
+			new NormalizedKeybindingItem(KeyCode.KEY_B, 'yes2', KbExpr.equals('2', 'b'), true)
+		]);
+	});
+
 	test('normalizeRule', function() {
 		let key1IsTrue = KbExpr.equals('key1', true);
 		let key1IsNotFalse = KbExpr.notEquals('key1', false);