diff --git a/src/MacVim/English.lproj/Preferences.nib/keyedobjects.nib b/src/MacVim/English.lproj/Preferences.nib/keyedobjects.nib
index 2729ceab3b..d6c412543a 100644
Binary files a/src/MacVim/English.lproj/Preferences.nib/keyedobjects.nib and b/src/MacVim/English.lproj/Preferences.nib/keyedobjects.nib differ
diff --git a/src/MacVim/MMAppController.m b/src/MacVim/MMAppController.m
index b0fb405d91..a481811768 100644
--- a/src/MacVim/MMAppController.m
+++ b/src/MacVim/MMAppController.m
@@ -161,7 +161,6 @@ fsEventCallback(ConstFSEventStreamRef streamRef,
         [NSNumber numberWithInt:1],     MMTextInsetRightKey,
         [NSNumber numberWithInt:1],     MMTextInsetTopKey,
         [NSNumber numberWithInt:1],     MMTextInsetBottomKey,
-        [NSNumber numberWithBool:NO],   MMTerminateAfterLastWindowClosedKey,
         @"MMTypesetter",                MMTypesetterKey,
         [NSNumber numberWithFloat:1],   MMCellWidthMultiplierKey,
         [NSNumber numberWithFloat:-1],  MMBaselineOffsetKey,
@@ -183,6 +182,7 @@ fsEventCallback(ConstFSEventStreamRef streamRef,
         [NSNumber numberWithInt:3],     MMOpenLayoutKey,
         [NSNumber numberWithBool:NO],   MMVerticalSplitKey,
         [NSNumber numberWithInt:0],     MMPreloadCacheSizeKey,
+        [NSNumber numberWithInt:0],     MMLastWindowClosedBehaviorKey,
         nil];
 
     [[NSUserDefaults standardUserDefaults] registerDefaults:dict];
@@ -537,8 +537,9 @@ fsEventCallback(ConstFSEventStreamRef streamRef,
 
 - (BOOL)applicationShouldTerminateAfterLastWindowClosed:(NSApplication *)sender
 {
-    return [[NSUserDefaults standardUserDefaults]
-            boolForKey:MMTerminateAfterLastWindowClosedKey];
+    return (MMTerminateWhenLastWindowClosed ==
+            [[NSUserDefaults standardUserDefaults]
+                integerForKey:MMLastWindowClosedBehaviorKey]);
 }
 
 - (NSApplicationTerminateReply)applicationShouldTerminate:
@@ -731,6 +732,12 @@ fsEventCallback(ConstFSEventStreamRef streamRef,
         // The last editor window just closed so restore the main menu back to
         // its default state (which is defined in MainMenu.nib).
         [self setMainMenu:defaultMainMenu];
+
+        BOOL hide = (MMHideWhenLastWindowClosed ==
+                    [[NSUserDefaults standardUserDefaults]
+                        integerForKey:MMLastWindowClosedBehaviorKey]);
+        if (hide)
+            [NSApp hide:self];
     }
 }
 
diff --git a/src/MacVim/Miscellaneous.h b/src/MacVim/Miscellaneous.h
index 6b8df3553a..23c3ebe206 100644
--- a/src/MacVim/Miscellaneous.h
+++ b/src/MacVim/Miscellaneous.h
@@ -30,7 +30,6 @@ extern NSString *MMTextInsetLeftKey;
 extern NSString *MMTextInsetRightKey;
 extern NSString *MMTextInsetTopKey;
 extern NSString *MMTextInsetBottomKey;
-extern NSString *MMTerminateAfterLastWindowClosedKey;
 extern NSString *MMTypesetterKey;
 extern NSString *MMCellWidthMultiplierKey;
 extern NSString *MMBaselineOffsetKey;
@@ -53,6 +52,7 @@ extern NSString *MMShowLeftPlugInContainerKey;
 extern NSString *MMOpenLayoutKey;
 extern NSString *MMVerticalSplitKey;
 extern NSString *MMPreloadCacheSizeKey;
+extern NSString *MMLastWindowClosedBehaviorKey;
 
 
 // Enum for MMUntitledWindowKey
@@ -63,7 +63,6 @@ enum {
     MMUntitledWindowAlways = 3
 };
 
-
 // Enum for MMOpenLayoutKey (first 4 must match WIN_* defines in main.c)
 enum {
     MMLayoutArglist = 0,
@@ -73,6 +72,13 @@ enum {
     MMLayoutWindows = 4,
 };
 
+// Enum for MMLastWindowClosedBehaviorKey
+enum {
+    MMDoNothingWhenLastWindowClosed = 0,
+    MMHideWhenLastWindowClosed = 1,
+    MMTerminateWhenLastWindowClosed = 2,
+};
+
 
 
 
diff --git a/src/MacVim/Miscellaneous.m b/src/MacVim/Miscellaneous.m
index 95782b8d48..15259d48d7 100644
--- a/src/MacVim/Miscellaneous.m
+++ b/src/MacVim/Miscellaneous.m
@@ -21,8 +21,6 @@ NSString *MMTextInsetLeftKey            = @"MMTextInsetLeft";
 NSString *MMTextInsetRightKey           = @"MMTextInsetRight";
 NSString *MMTextInsetTopKey             = @"MMTextInsetTop";
 NSString *MMTextInsetBottomKey          = @"MMTextInsetBottom";
-NSString *MMTerminateAfterLastWindowClosedKey
-                                        = @"MMTerminateAfterLastWindowClosed";
 NSString *MMTypesetterKey               = @"MMTypesetter";
 NSString *MMCellWidthMultiplierKey      = @"MMCellWidthMultiplier";
 NSString *MMBaselineOffsetKey           = @"MMBaselineOffset";
@@ -45,6 +43,7 @@ NSString *MMShowLeftPlugInContainerKey  = @"MMShowLeftPlugInContainer";
 NSString *MMOpenLayoutKey               = @"MMOpenLayout";
 NSString *MMVerticalSplitKey            = @"MMVerticalSplit";
 NSString *MMPreloadCacheSizeKey         = @"MMPreloadCacheSize";
+NSString *MMLastWindowClosedBehaviorKey = @"MMLastWindowClosedBehavior";