diff --git a/src/vs/code/electron-main/window.ts b/src/vs/code/electron-main/window.ts
index 88eaf2d8b6144c49931bdd431a92e136fe82b81b..719e1e7f6be2a159c1435eea988bbde3e616dbfe 100644
--- a/src/vs/code/electron-main/window.ts
+++ b/src/vs/code/electron-main/window.ts
@@ -18,7 +18,7 @@ import { IConfigurationService } from 'vs/platform/configuration/common/configur
 import { parseArgs } from 'vs/platform/environment/node/argv';
 import product from 'vs/platform/node/product';
 import { getCommonHTTPHeaders } from 'vs/platform/environment/node/http';
-import { IWindowSettings } from 'vs/platform/windows/common/windows';
+import { IWindowSettings, MenuBarVisibility } from 'vs/platform/windows/common/windows';
 
 export interface IWindowState {
 	width?: number;
@@ -120,7 +120,7 @@ export enum ReadyState {
 
 interface IConfiguration {
 	window: {
-		menuBarVisibility: 'visible' | 'toggle' | 'hidden';
+		menuBarVisibility: MenuBarVisibility;
 	};
 }
 
@@ -149,7 +149,7 @@ export class VSCodeWindow implements IVSCodeWindow {
 	private _extensionDevelopmentPath: string;
 	private _isExtensionTestHost: boolean;
 	private windowState: IWindowState;
-	private currentMenuBarVisibility: 'visible' | 'toggle' | 'hidden';
+	private currentMenuBarVisibility: MenuBarVisibility;
 	private currentWindowMode: WindowMode;
 
 	private whenReadyCallbacks: TValueCallback<VSCodeWindow>[];
@@ -677,30 +677,37 @@ export class VSCodeWindow implements IVSCodeWindow {
 		this.win.setFullScreen(willBeFullScreen);
 
 		// respect configured menu bar visibility or default to toggle if not set
-		this.setMenuBarVisibility(this.getMenuBarVisibility(this.configurationService.getConfiguration<IConfiguration>(), willBeFullScreen ? 'toggle' : 'visible'), false);
+		this.setMenuBarVisibility(this.currentMenuBarVisibility, false);
 	}
 
-	private getMenuBarVisibility(configuration: IConfiguration, fallback: 'visible' | 'toggle' | 'hidden' = 'visible'): 'visible' | 'toggle' | 'hidden' {
+	private getMenuBarVisibility(configuration: IConfiguration): MenuBarVisibility {
 		const windowConfig = this.configurationService.getConfiguration<IWindowSettings>('window');
 
 		if (!windowConfig || !windowConfig.menuBarVisibility) {
-			return fallback;
+			return 'default';
 		}
 
 		let menuBarVisibility = windowConfig.menuBarVisibility;
 		if (['visible', 'toggle', 'hidden'].indexOf(menuBarVisibility) < 0) {
-			menuBarVisibility = fallback;
+			menuBarVisibility = 'default';
 		}
 
 		return menuBarVisibility;
 	}
 
-	public setMenuBarVisibility(visibility: 'visible' | 'toggle' | 'hidden', notify: boolean = true): void {
+	public setMenuBarVisibility(visibility: MenuBarVisibility, notify: boolean = true): void {
 		if (platform.isMacintosh) {
 			return; // ignore for macOS platform
 		}
 
+		const isFullscreen = this.win.isFullScreen();
+
 		switch (visibility) {
+			case ('default'):
+				this.win.setMenuBarVisibility(!isFullscreen);
+				this.win.setAutoHideMenuBar(isFullscreen);
+				break;
+
 			case ('visible'):
 				this.win.setMenuBarVisibility(true);
 				this.win.setAutoHideMenuBar(false);
diff --git a/src/vs/platform/windows/common/windows.ts b/src/vs/platform/windows/common/windows.ts
index 07de6fed6fe4b87c8f01f2d43a609945fcbe4235..3a39e150544217b9a8ab6dd4ec6d9c7d25d2e9cc 100644
--- a/src/vs/platform/windows/common/windows.ts
+++ b/src/vs/platform/windows/common/windows.ts
@@ -84,6 +84,8 @@ export interface IWindowService {
 	unmaximizeWindow(): TPromise<void>;
 }
 
+export type MenuBarVisibility = 'default' | 'visible' | 'toggle' | 'hidden';
+
 export interface IWindowSettings {
 	openFilesInNewWindow: 'on' | 'off' | 'default';
 	openFoldersInNewWindow: 'on' | 'off' | 'default';
@@ -92,6 +94,6 @@ export interface IWindowSettings {
 	zoomLevel: number;
 	titleBarStyle: 'native' | 'custom';
 	autoDetectHighContrast: boolean;
-	menuBarVisibility: 'visible' | 'toggle' | 'hidden';
+	menuBarVisibility: MenuBarVisibility;
 	newWindowDimensions: 'default' | 'inherit' | 'maximized' | 'fullscreen';
-}
+}
\ No newline at end of file
diff --git a/src/vs/workbench/electron-browser/actions.ts b/src/vs/workbench/electron-browser/actions.ts
index 7415b45f4a0b5ea9d879fb17532471a99e12a573..4edeb96b2e00b0ea8365d927f5a275443c05a587 100644
--- a/src/vs/workbench/electron-browser/actions.ts
+++ b/src/vs/workbench/electron-browser/actions.ts
@@ -9,7 +9,7 @@ import URI from 'vs/base/common/uri';
 import { TPromise } from 'vs/base/common/winjs.base';
 import { Action } from 'vs/base/common/actions';
 import { IWindowIPCService } from 'vs/workbench/services/window/electron-browser/windowService';
-import { IWindowService, IWindowsService } from 'vs/platform/windows/common/windows';
+import { IWindowService, IWindowsService, MenuBarVisibility } from 'vs/platform/windows/common/windows';
 import { IWorkbenchEditorService } from 'vs/workbench/services/editor/common/editorService';
 import nls = require('vs/nls');
 import product from 'vs/platform/node/product';
@@ -183,16 +183,16 @@ export class ToggleMenuBarAction extends Action {
 	}
 
 	public run(): TPromise<any> {
-		let currentVisibilityValue = this.configurationService.lookup<'visible' | 'toggle' | 'hidden'>(ToggleMenuBarAction.menuBarVisibilityKey).value;
-		if (typeof (currentVisibilityValue) !== 'string') {
-			currentVisibilityValue = 'visible';
+		let currentVisibilityValue = this.configurationService.lookup<MenuBarVisibility>(ToggleMenuBarAction.menuBarVisibilityKey).value;
+		if (typeof currentVisibilityValue !== 'string') {
+			currentVisibilityValue = 'default';
 		}
 
 		let newVisibilityValue: string;
-		if (currentVisibilityValue === 'visible') {
+		if (currentVisibilityValue === 'visible' || currentVisibilityValue === 'default') {
 			newVisibilityValue = 'toggle';
 		} else {
-			newVisibilityValue = 'visible';
+			newVisibilityValue = 'default';
 		}
 
 		this.configurationEditingService.writeConfiguration(ConfigurationTarget.USER, { key: ToggleMenuBarAction.menuBarVisibilityKey, value: newVisibilityValue }).then(null, error => {
diff --git a/src/vs/workbench/electron-browser/main.contribution.ts b/src/vs/workbench/electron-browser/main.contribution.ts
index 13826229d1d180d678858409a2f6c2df7ae7b056..326a6d9ec0031a6bda55152a5a62a1076d86c500 100644
--- a/src/vs/workbench/electron-browser/main.contribution.ts
+++ b/src/vs/workbench/electron-browser/main.contribution.ts
@@ -235,9 +235,9 @@ Note that there can still be cases where this setting is ignored (e.g. when usin
 if (platform.isWindows || platform.isLinux) {
 	properties['window.menuBarVisibility'] = {
 		'type': 'string',
-		'enum': ['visible', 'toggle', 'hidden'],
-		'default': 'visible',
-		'description': nls.localize('menuBarVisibility', "Control the visibility of the menu bar. A setting of 'toggle' means that a single press of the alt key will show and hide the menu bar.")
+		'enum': ['default', 'visible', 'toggle', 'hidden'],
+		'default': 'default',
+		'description': nls.localize('menuBarVisibility', "Control the visibility of the menu bar. A setting of 'toggle' means that the menu bar is hidden and a single press of the Alt key will show it. By default, the menu bar will be visible, unless the window is full screen.")
 	};
 }