diff --git a/src/vs/workbench/api/common/extHostEditorTabs.ts b/src/vs/workbench/api/common/extHostEditorTabs.ts
index 17201e69e0e..5d6033c4849 100644
--- a/src/vs/workbench/api/common/extHostEditorTabs.ts
+++ b/src/vs/workbench/api/common/extHostEditorTabs.ts
@@ -36,7 +36,7 @@ export interface IEditorTabGroups {
 	all: IEditorTabGroup[];
 	activeTabGroup: IEditorTabGroup | undefined;
 	readonly onDidChangeTabGroup: Event<void>;
-	readonly onDidChangeActiveTabGroup: Event<IEditorTabGroup>;
+	readonly onDidChangeActiveTabGroup: Event<IEditorTabGroup | undefined>;
 }
 
 export interface IExtHostEditorTabs extends IExtHostEditorTabsShape {
@@ -52,7 +52,7 @@ export class ExtHostEditorTabs implements IExtHostEditorTabs {
 
 	private readonly _onDidChangeTabGroup = new Emitter<void>();
 
-	private readonly _onDidChangeActiveTabGroup = new Emitter<IEditorTabGroup>();
+	private readonly _onDidChangeActiveTabGroup = new Emitter<IEditorTabGroup | undefined>();
 
 	private _tabGroups: IEditorTabGroups = {
 		all: [],
@@ -72,6 +72,7 @@ export class ExtHostEditorTabs implements IExtHostEditorTabs {
 	$acceptEditorTabModel(tabGroups: IEditorTabGroupDto[]): void {
 		// Clears the tab groups array
 		this._tabGroups.all.length = 0;
+		let activeGroupFound = false;
 		for (const group of tabGroups) {
 			let activeTab: IEditorTab | undefined;
 			const tabs = group.tabs.map(tab => {
@@ -90,6 +91,7 @@ export class ExtHostEditorTabs implements IExtHostEditorTabs {
 			// If the currrent group is active, set the active group to be that group.
 			// We must use the same object so we pull from the array to allow for reference equality
 			if (group.isActive) {
+				activeGroupFound = true;
 				const oldActiveTabGroup = this._tabGroups.activeTabGroup;
 				this._tabGroups.activeTabGroup = this._tabGroups.all[this._tabGroups.all.length - 1];
 				// Diff the old and current active group to decide if we should fire a change event
@@ -98,6 +100,11 @@ export class ExtHostEditorTabs implements IExtHostEditorTabs {
 				}
 			}
 		}
+		// No active group was found in the model (most common case is model was empty) fire undefined event
+		if (!activeGroupFound) {
+			this._tabGroups.activeTabGroup = undefined;
+			this._onDidChangeActiveTabGroup.fire(undefined);
+		}
 		this._onDidChangeTabGroup.fire();
 	}
 
diff --git a/src/vs/workbench/api/test/browser/extHostEditorTabs.test.ts b/src/vs/workbench/api/test/browser/extHostEditorTabs.test.ts
index 06806429cd1..6be6712566c 100644
--- a/src/vs/workbench/api/test/browser/extHostEditorTabs.test.ts
+++ b/src/vs/workbench/api/test/browser/extHostEditorTabs.test.ts
@@ -150,4 +150,65 @@ suite('ExtHostEditorTabs', function () {
 		assert.strictEqual(first.activeTab, first.tabs[0]);
 		assert.strictEqual(extHostEditorTabs.tabGroups.activeTabGroup, first);
 	});
+
+	test('onDidChangeActiveTabGroup fires properly', function () {
+		const extHostEditorTabs = new ExtHostEditorTabs(
+			SingleProxyRPCProtocol(new class extends mock<MainThreadEditorTabsShape>() {
+				// override/implement $moveTab or $closeTab
+			})
+		);
+
+		let count = 0;
+		let activeTabGroupFromEvent: IEditorTabGroup | undefined = undefined;
+		extHostEditorTabs.tabGroups.onDidChangeActiveTabGroup((tabGroup) => {
+			count++;
+			activeTabGroupFromEvent = tabGroup;
+		});
+
+
+		assert.strictEqual(extHostEditorTabs.tabGroups.all.length, 0);
+		assert.strictEqual(extHostEditorTabs.tabGroups.activeTabGroup, undefined);
+		assert.strictEqual(count, 0);
+		const tabModel = [{
+			isActive: true,
+			viewColumn: 0,
+			groupId: 12,
+			tabs: [],
+			activeTab: undefined
+		}];
+		extHostEditorTabs.$acceptEditorTabModel(tabModel);
+		assert.ok(extHostEditorTabs.tabGroups.activeTabGroup);
+		let activeTabGroup: IEditorTabGroup = extHostEditorTabs.tabGroups.activeTabGroup;
+		assert.strictEqual(count, 1);
+		assert.strictEqual(activeTabGroup, activeTabGroupFromEvent);
+		// Firing again with same model shouldn't cause a change
+		extHostEditorTabs.$acceptEditorTabModel(tabModel);
+		assert.strictEqual(count, 1);
+		// Changing a property should fire a change
+		tabModel[0].viewColumn = 1;
+		extHostEditorTabs.$acceptEditorTabModel(tabModel);
+		assert.strictEqual(count, 2);
+		activeTabGroup = extHostEditorTabs.tabGroups.activeTabGroup;
+		assert.strictEqual(activeTabGroup, activeTabGroupFromEvent);
+		// Changing the active tab group should fire a change
+		tabModel[0].isActive = false;
+		tabModel.push({
+			isActive: true,
+			viewColumn: 0,
+			groupId: 13,
+			tabs: [],
+			activeTab: undefined
+		});
+		extHostEditorTabs.$acceptEditorTabModel(tabModel);
+		assert.strictEqual(count, 3);
+		activeTabGroup = extHostEditorTabs.tabGroups.activeTabGroup;
+		assert.strictEqual(activeTabGroup, activeTabGroupFromEvent);
+
+		// Empty tab model should fire a change and return undefined
+		extHostEditorTabs.$acceptEditorTabModel([]);
+		assert.strictEqual(count, 4);
+		activeTabGroup = extHostEditorTabs.tabGroups.activeTabGroup;
+		assert.strictEqual(activeTabGroup, undefined);
+		assert.strictEqual(activeTabGroup, activeTabGroupFromEvent);
+	});
 });
diff --git a/src/vscode-dts/vscode.proposed.tabs.d.ts b/src/vscode-dts/vscode.proposed.tabs.d.ts
index 348d08a9f3d..f08d94ddda6 100644
--- a/src/vscode-dts/vscode.proposed.tabs.d.ts
+++ b/src/vscode-dts/vscode.proposed.tabs.d.ts
@@ -115,7 +115,7 @@ declare module 'vscode' {
 		 * An {@link Event} which fires when the active group changes.
 		 * Whether it be which group is active or its properties.
 		 */
-		onDidChangeActiveTabGroup: Event<TabGroup>;
+		onDidChangeActiveTabGroup: Event<TabGroup | undefined>;
 	}
 
 	interface TabGroup {