diff --git a/py/repl.c b/py/repl.c
index 4e47cf784c..0369b02195 100644
--- a/py/repl.c
+++ b/py/repl.c
@@ -313,10 +313,7 @@ size_t mp_repl_autocomplete(const char *str, size_t len, const mp_print_t *print
                 return sizeof(import_str) - 1 - s_len;
             }
         }
-        if (q_first == 0) {
-            *compl_str = "    ";
-            return s_len ? 0 : 4;
-        }
+        return 0;
     }
 
     // 1 match found, or multiple matches with a common prefix
diff --git a/shared/readline/readline.c b/shared/readline/readline.c
index cad85b4e6b..915bcda841 100644
--- a/shared/readline/readline.c
+++ b/shared/readline/readline.c
@@ -222,7 +222,22 @@ int readline_process_char(int c) {
         } else if (c == 9) {
             // tab magic
             const char *compl_str;
-            size_t compl_len = mp_repl_autocomplete(rl.line->buf + rl.orig_line_len, rl.cursor_pos - rl.orig_line_len, &mp_plat_print, &compl_str);
+            size_t compl_len;
+            if (vstr_len(rl.line) != 0 && unichar_isspace(vstr_str(rl.line)[rl.cursor_pos - 1])) {
+                // expand tab to 4 spaces if it follows whitespace:
+                //  - includes the case of additional indenting
+                //  - includes the case of indenting the start of a line that's not the first line,
+                //    because a newline will be the previous character
+                //  - doesn't include the case when at the start of the first line, because we still
+                //    want to use auto-complete there
+                compl_str = "    ";
+                compl_len = 4;
+            } else {
+                // try to auto-complete a word
+                const char *cur_line_buf = vstr_str(rl.line) + rl.orig_line_len;
+                size_t cur_line_len = rl.cursor_pos - rl.orig_line_len;
+                compl_len = mp_repl_autocomplete(cur_line_buf, cur_line_len, &mp_plat_print, &compl_str);
+            }
             if (compl_len == 0) {
                 // no match
             } else if (compl_len == (size_t)(-1)) {