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HTML

              
                <div ng-controller="DemoCtrl as ctrl" layout="column" ng-cloak="" class="autocompletedemoBasicUsage" ng-app="MyApp">
  <md-content class="md-padding">
    <form ng-submit="$event.preventDefault()">
      <p>Select first item to populate second dropdown</p>
      <md-autocomplete  md-selected-item="ctrl.selectedItem"  md-selected-item-change="ctrl.selectedItemChange(item.id)" md-items="item in ctrl.country" md-item-text="item.name" md-min-length="0" placeholder="What is your favorite US country?">
        <md-item-template>
          <span md-highlight-text="ctrl.searchText" md-highlight-flags="^i">{{item.name}}</span>
        </md-item-template>
        <md-not-found>
          No states matching "{{ctrl.searchText}}" were found.
        </md-not-found>
      </md-autocomplete>
      <br/>

 <br/>
  <md-autocomplete  md-selected-item="ctrl.selectedStateItem"  md-selected-item-change="ctrl.selectedItemChange(item.id)" md-items="item in ctrl.states" md-item-text="item.name" md-min-length="0" placeholder="What is your favorite US state?">
        <md-item-template>
          <span md-highlight-text="ctrl.searchText" md-highlight-flags="^i">{{item.name}}</span>
        </md-item-template>
        <md-not-found>
          No states matching "{{ctrl.searchText}}" were found.
       
        </md-not-found>
      </md-autocomplete>
    </form>
  </md-content>
</div>
              
            
!

CSS

              
                
              
            
!

JS

              
                (function () {
  'use strict';
  angular
      .module('MyApp',['ngMaterial', 'ngMessages', 'material.svgAssetsCache'])
      .controller('DemoCtrl', DemoCtrl);

  function DemoCtrl ($timeout, $q, $log) {
    var self = this;


    // list of `state` value/display objects
    self.country        = loadAll();

    self.selectedItemChange = selectedItemChange;

    function selectedItemChange(item) {
      var data = [{id:1,countryId:1,name:"karnataka"},{id:2,countryId:2,name:"Tamilnadu"}]
      if(item == data[0].countryId){
        self.states  = data;
      }
    }

    /**
     * Build `states` list of key/value pairs
     */
    function loadAll() {
      var allStates = [{id:1,name:'Alabama'},{id:2,name:'Alaska'},{id:3,name:'Arizona'},{id:4,name:'Arkansas'}]

      return allStates
    }


  }
})();


/**
Copyright 2016 Google Inc. All Rights Reserved. 
Use of this source code is governed by an MIT-style license that can be in foundin the LICENSE file at https://material.angularjs.org/license.
**/
              
            
!
999px

Console