diff --git a/spec/text-editor-spec.coffee b/spec/text-editor-spec.coffee
index 6a46992ff..1d9a4b3fb 100644
--- a/spec/text-editor-spec.coffee
+++ b/spec/text-editor-spec.coffee
@@ -3810,6 +3810,27 @@ describe "TextEditor", ->
         runs ->
           expect(editor.softTabs).toBe true
 
+    describe "when editor.tabType changes", ->
+      beforeEach ->
+        atom.config.set('editor.tabType', 'auto')
+
+      it "updates based on the value chosen", ->
+        waitsForPromise ->
+          atom.workspace.open('sample.js').then (editor) ->
+            expect(editor.getSoftTabs()).toBe true
+            atom.config.set('editor.tabType', 'hard')
+            expect(editor.getSoftTabs()).toBe false
+            atom.config.set('editor.tabType', 'auto')
+            expect(editor.getSoftTabs()).toBe true
+
+        waitsForPromise ->
+          atom.workspace.open('sample-with-tabs.coffee').then (editor) ->
+            expect(editor.getSoftTabs()).toBe false
+            atom.config.set('editor.tabType', 'soft')
+            expect(editor.getSoftTabs()).toBe true
+            atom.config.set('editor.tabType', 'auto')
+            expect(editor.getSoftTabs()).toBe false
+
   describe '.getTabLength()', ->
     describe 'when scoped settings are used', ->
       coffeeEditor = null
diff --git a/src/text-editor.coffee b/src/text-editor.coffee
index 293ed2b70..8d0d9b2d6 100644
--- a/src/text-editor.coffee
+++ b/src/text-editor.coffee
@@ -75,7 +75,7 @@ class TextEditor extends Model
     'autoDecreaseIndentForBufferRow', 'toggleLineCommentForBufferRow', 'toggleLineCommentsForBufferRows',
     toProperty: 'languageMode'
 
-  constructor: ({softTabs, initialLine, initialColumn, tabLength, softWrapped, @displayBuffer, buffer, registerEditor, suppressCursorCreation, @mini, @placeholderText, lineNumberGutterVisible, largeFileMode}={}) ->
+  constructor: ({@softTabs, initialLine, initialColumn, tabLength, softWrapped, @displayBuffer, buffer, registerEditor, suppressCursorCreation, @mini, @placeholderText, lineNumberGutterVisible, largeFileMode}={}) ->
     super
 
     @emitter = new Emitter
@@ -86,7 +86,9 @@ class TextEditor extends Model
     buffer ?= new TextBuffer
     @displayBuffer ?= new DisplayBuffer({buffer, tabLength, softWrapped, ignoreInvisibles: @mini, largeFileMode})
     @buffer = @displayBuffer.buffer
-    @softTabs = @shouldUseSoftTabs(defaultValue: softTabs)
+
+    @disposables.add atom.config.observe 'editor.tabType', scope: @getRootScopeDescriptor(), =>
+      @softTabs = @shouldUseSoftTabs(defaultValue: @softTabs)
 
     for marker in @findMarkers(@getSelectionMarkerAttributes())
       marker.setProperties(preserveFolds: true)