--- a/browser/base/content/browser-tabview.js
+++ b/browser/base/content/browser-tabview.js
@@ -37,16 +37,17 @@
 # ***** END LICENSE BLOCK *****
 
 let TabView = {
   _deck: null,
   _iframe: null,
   _window: null,
   _initialized: false,
   _browserKeyHandlerInitialized: false,
+  _closedLastVisibleTabBeforeFrameInitialized: false,
   _isFrameLoading: false,
   _initFrameCallbacks: [],
   _lastSessionGroupName: null,
   PREF_BRANCH: "browser.panorama.",
   PREF_FIRST_RUN: "browser.panorama.experienced_first_run",
   PREF_STARTUP_PAGE: "browser.startup.page",
   PREF_RESTORE_ENABLED_ONCE: "browser.panorama.session_restore_enabled_once",
   GROUPS_IDENTIFIER: "tabview-groups",
@@ -119,24 +120,34 @@ let TabView = {
             let parsedData = JSON.parse(data);
             this.updateGroupNumberBroadcaster(parsedData.totalNumber || 1);
           }
         } catch (e) { }
 
         let self = this;
         // if a tab is changed from hidden to unhidden and the iframe is not
         // initialized, load the iframe and setup the tab.
-        this._tabShowEventListener = function (event) {
+        this._tabShowEventListener = function(event) {
           if (!self._window)
             self._initFrame(function() {
               self._window.UI.onTabSelect(gBrowser.selectedTab);
+              if (self._closedLastVisibleTabBeforeFrameInitialized) {
+                self._closedLastVisibleTabBeforeFrameInitialized = false;
+                self._window.UI.showTabView(false);
+              }
             });
         };
+        this._tabCloseEventListener = function(event) {
+          if (!self._window && gBrowser.visibleTabs.length == 0)
+            self._closedLastVisibleTabBeforeFrameInitialized = true;
+        };
         gBrowser.tabContainer.addEventListener(
-          "TabShow", this._tabShowEventListener, true);
+          "TabShow", this._tabShowEventListener, false);
+        gBrowser.tabContainer.addEventListener(
+          "TabClose", this._tabCloseEventListener, false);
 
        // grab the last used group title
        this._lastSessionGroupName = sessionstore.getWindowValue(window,
          this.LAST_SESSION_GROUP_NAME_IDENTIFIER);
       }
     }
 
     Services.prefs.addObserver(this.PREF_BRANCH, this, false);
@@ -156,20 +167,23 @@ let TabView = {
   // ----------
   // Uninitializes TabView.
   uninit: function TabView_uninit() {
     if (!this._initialized)
       return;
 
     Services.prefs.removeObserver(this.PREF_BRANCH, this);
 
-    if (this._tabShowEventListener) {
+    if (this._tabShowEventListener)
       gBrowser.tabContainer.removeEventListener(
-        "TabShow", this._tabShowEventListener, true);
-    }
+        "TabShow", this._tabShowEventListener, false);
+
+    if (this._tabCloseEventListener)
+      gBrowser.tabContainer.removeEventListener(
+        "TabClose", this._tabCloseEventListener, false);
 
     this._initialized = false;
   },
 
   // ----------
   // Creates the frame and calls the callback once it's loaded. 
   // If the frame already exists, calls the callback immediately. 
   _initFrame: function TabView__initFrame(callback) {
@@ -208,20 +222,24 @@ let TabView = {
       window.removeEventListener("tabviewframeinitialized", onInit, false);
 
       self._isFrameLoading = false;
       self._window = self._iframe.contentWindow;
       self._setBrowserKeyHandlers();
 
       if (self._tabShowEventListener) {
         gBrowser.tabContainer.removeEventListener(
-          "TabShow", self._tabShowEventListener, true);
+          "TabShow", self._tabShowEventListener, false);
         self._tabShowEventListener = null;
       }
-
+      if (self._tabCloseEventListener) {
+        gBrowser.tabContainer.removeEventListener(
+          "TabClose", self._tabCloseEventListener, false);
+        self._tabCloseEventListener = null;
+      }
       self._initFrameCallbacks.forEach(function (cb) cb());
       self._initFrameCallbacks = [];
     }, false);
 
     this._iframe.setAttribute("src", "chrome://browser/content/tabview.html");
     this._deck.appendChild(this._iframe);
   },
 

--- a/browser/base/content/test/tabview/Makefile.in
+++ b/browser/base/content/test/tabview/Makefile.in
@@ -141,16 +141,17 @@ include $(topsrcdir)/config/rules.mk
                  browser_tabview_bug644097.js \
                  browser_tabview_bug648882.js \
                  browser_tabview_bug649006.js \
                  browser_tabview_bug649307.js \
                  browser_tabview_bug649319.js \
                  browser_tabview_bug650280.js \
                  browser_tabview_bug650573.js \
                  browser_tabview_bug651311.js \
+                 browser_tabview_bug654295.js \
                  browser_tabview_bug654721.js \
                  browser_tabview_bug654941.js \
                  browser_tabview_bug655269.js \
                  browser_tabview_bug656778.js \
                  browser_tabview_bug656913.js \
                  browser_tabview_bug662266.js \
                  browser_tabview_bug663421.js \
                  browser_tabview_bug665502.js \

new file mode 100644
--- /dev/null
+++ b/browser/base/content/test/tabview/browser_tabview_bug654295.js
@@ -0,0 +1,62 @@
+/* Any copyright is dedicated to the Public Domain.
+   http://creativecommons.org/publicdomain/zero/1.0/ */
+
+function test() {
+  waitForExplicitFinish();
+
+  const DUMMY_PAGE_URL = "about:blank";
+  const DUMMY_PAGE_URL_2 = "http://mochi.test:8888/";
+
+  // create two groups and each group has one tab item
+  let newState = {
+    windows: [{
+      tabs: [{
+        entries: [{ url: DUMMY_PAGE_URL }],
+        hidden: true,
+        attributes: {},
+        extData: {
+          "tabview-tab":
+            '{"bounds":{"left":21,"top":29,"width":204,"height":153},' +
+            '"userSize":null,"url":"' + DUMMY_PAGE_URL + '","groupID":1,' +
+            '"imageData":null,"title":null}'
+        }
+      },{
+        entries: [{ url: DUMMY_PAGE_URL_2 }],
+        hidden: false,
+        attributes: {},
+        extData: {
+          "tabview-tab":
+            '{"bounds":{"left":315,"top":29,"width":111,"height":84},' +
+            '"userSize":null,"url":"' + DUMMY_PAGE_URL_2 + '","groupID":2,' +
+            '"imageData":null,"title":null}'
+        },
+      }],
+      selected:2,
+      _closedTabs: [],
+      extData: {
+        "tabview-groups": '{"nextID":3,"activeGroupId":2}',
+        "tabview-group":
+          '{"1":{"bounds":{"left":15,"top":5,"width":280,"height":232},' +
+          '"userSize":null,"title":"","id":1},' +
+          '"2":{"bounds":{"left":309,"top":5,"width":267,"height":226},' +
+          '"userSize":null,"title":"","id":2}}',
+        "tabview-ui": '{"pageBounds":{"left":0,"top":0,"width":788,"height":548}}'
+      }, sizemode:"normal"
+    }]
+  };
+
+  newWindowWithState(newState, function(win) {
+    registerCleanupFunction(function () win.close());
+
+    whenTabViewIsShown(function() {
+      let contentWindow = win.TabView.getContentWindow();
+
+      is(contentWindow.GroupItems.groupItems.length, 2, "There are still two groups");
+      is(win.gBrowser.tabs.length, 1, "There is only one tab");
+
+      finish();
+    }, win);
+    win.gBrowser.removeTab(win.gBrowser.selectedTab);
+  });
+}
+