diff --git a/data/org.gnome.shell.gschema.xml.in.in b/data/org.gnome.shell.gschema.xml.in.in
index 12b76c94f..c42a9f732 100644
--- a/data/org.gnome.shell.gschema.xml.in.in
+++ b/data/org.gnome.shell.gschema.xml.in.in
@@ -72,6 +72,16 @@
         This key sets the default state of the checkbox.
       </_description>
     </key>
+    <key name="had-bluetooth-devices-setup" type="b">
+      <default>false</default>
+      <_summary>Whether the default Bluetooth adapter had set up devices associated to it</_summary>
+      <_description>
+        The shell will only show a Bluetooth menu item if a Bluetooth
+        adapter is powered, or if there were devices set up associated
+        with the default adapter. This will be reset if the default
+        adapter is ever seen not to have devices associated to it.
+      </_description>
+    </key>
     <child name="calendar" schema="org.gnome.shell.calendar"/>
     <child name="keybindings" schema="org.gnome.shell.keybindings"/>
     <child name="keyboard" schema="org.gnome.shell.keyboard"/>
diff --git a/js/ui/status/bluetooth.js b/js/ui/status/bluetooth.js
index 8c9afcfd5..d689e54d7 100644
--- a/js/ui/status/bluetooth.js
+++ b/js/ui/status/bluetooth.js
@@ -23,6 +23,8 @@ const RfkillManagerInterface = '<node> \
 
 const RfkillManagerProxy = Gio.DBusProxy.makeProxyWrapper(RfkillManagerInterface);
 
+const HAD_BLUETOOTH_DEVICES_SETUP = 'had-bluetooth-devices-setup';
+
 const Indicator = new Lang.Class({
     Name: 'BTIndicator',
     Extends: PanelMenu.SystemIndicator,
@@ -32,6 +34,7 @@ const Indicator = new Lang.Class({
 
         this._indicator = this._addIndicator();
         this._indicator.icon_name = 'bluetooth-active-symbolic';
+        this._hadSetupDevices = global.settings.get_boolean(HAD_BLUETOOTH_DEVICES_SETUP);
 
         this._proxy = new RfkillManagerProxy(Gio.DBus.session, BUS_NAME, OBJECT_PATH,
                                              Lang.bind(this, function(proxy, error) {
@@ -44,13 +47,15 @@ const Indicator = new Lang.Class({
                                              }));
         this._proxy.connect('g-properties-changed', Lang.bind(this, this._sync));
 
-        // The Bluetooth menu only appears when Bluetooth is in use,
-        // so just statically build it with a "Turn Off" menu item.
-        this._item = new PopupMenu.PopupSubMenuMenuItem('', true);
+        this._item = new PopupMenu.PopupSubMenuMenuItem(_("Bluetooth"), true);
         this._item.icon.icon_name = 'bluetooth-active-symbolic';
-        this._item.menu.addAction(_("Turn Off"), Lang.bind(this, function() {
-            this._proxy.BluetoothAirplaneMode = true;
+
+        this._toggleItem = new PopupMenu.PopupMenuItem('');
+        this._toggleItem.connect('activate', Lang.bind(this, function() {
+            this._proxy.BluetoothAirplaneMode = !this._proxy.BluetoothAirplaneMode;
         }));
+        this._item.menu.addMenuItem(this._toggleItem);
+
         this._item.menu.addSettingsAction(_("Bluetooth Settings"), 'gnome-bluetooth-panel.desktop');
         this.menu.addMenuItem(this._item);
 
@@ -68,42 +73,75 @@ const Indicator = new Lang.Class({
         while (ret) {
             let isDefault = this._model.get_value(iter,
                                                   GnomeBluetooth.Column.DEFAULT);
-            if (isDefault)
+            let isPowered = this._model.get_value(iter,
+                                                  GnomeBluetooth.Column.POWERED);
+            if (isDefault && isPowered)
                 return iter;
             ret = this._model.iter_next(iter);
         }
         return null;
     },
 
-    _getNConnectedDevices: function() {
+    // nDevices is the number of devices setup for the current default
+    // adapter if one exists and is powered. If unpowered or unavailable,
+    // nDevice is "1" if it had setup devices associated to it the last
+    // time it was seen, and "-1" if not.
+    //
+    // nConnectedDevices is the number of devices connected to the default
+    // adapter if one exists and is powered, or -1 if it's not available.
+    _getNDevices: function() {
         let adapter = this._getDefaultAdapter();
         if (!adapter)
-            return 0;
+            return [ this._hadSetupDevices ? 1 : -1, -1 ];
 
+        let nConnectedDevices = 0;
         let nDevices = 0;
         let [ret, iter] = this._model.iter_children(adapter);
         while (ret) {
             let isConnected = this._model.get_value(iter,
                                                     GnomeBluetooth.Column.CONNECTED);
             if (isConnected)
+                nConnectedDevices++;
+
+            let isPaired = this._model.get_value(iter,
+                                                 GnomeBluetooth.Column.PAIRED);
+            let isTrusted = this._model.get_value(iter,
+                                                  GnomeBluetooth.Column.TRUSTED);
+            if (isPaired || isTrusted)
                 nDevices++;
             ret = this._model.iter_next(iter);
         }
-        return nDevices;
+
+        if (this._hadSetupDevices != (nDevices > 0)) {
+            this._hadSetupDevices = !this._hadSetupDevices;
+            global.settings.set_boolean(HAD_BLUETOOTH_DEVICES_SETUP, this._hadSetupDevices);
+        }
+
+        return [ nDevices, nConnectedDevices];
     },
 
     _sync: function() {
-        let nDevices = this._getNConnectedDevices();
+        let [ nDevices, nConnectedDevices ] = this._getNDevices();
         let sensitive = !Main.sessionMode.isLocked && !Main.sessionMode.isGreeter;
 
         this.menu.setSensitive(sensitive);
-        this._indicator.visible = nDevices > 0;
-        this._item.actor.visible = this._proxy.BluetoothHasAirplaneMode && !this._proxy.BluetoothAirplaneMode;
+        this._indicator.visible = nConnectedDevices > 0;
 
+        // Remember if there were setup devices and show the menu
+        // if we've seen setup devices and we're not hard blocked
         if (nDevices > 0)
+            this._item.actor.visible = !this._proxy.BluetoothHardwareAirplaneMode;
+        else
+            this._item.actor.visible = this._proxy.BluetoothHasAirplaneMode && !this._proxy.BluetoothAirplaneMode;
+
+        if (nConnectedDevices > 0)
             /* Translators: this is the number of connected bluetooth devices */
-            this._item.label.text = ngettext("%d Connected", "%d Connected", nDevices).format(nDevices);
+            this._item.label.text = ngettext("%d Connected", "%d Connected", nConnectedDevices).format(nConnectedDevices);
+        else if (nConnectedDevices == -1)
+            this._item.label.text = _("Off");
         else
             this._item.label.text = _("Not In Use");
+
+        this._toggleItem.label.text = this._proxy.BluetoothAirplaneMode ? _("Turn On") : _("Turn Off");
     },
 });