diff --git a/command.py b/command.py
index 724e4c5d..2ee0a43a 100644
--- a/command.py
+++ b/command.py
@@ -58,7 +58,7 @@ class Command(object):
     """Perform the action, after option parsing is complete.
     """
     raise NotImplementedError
- 
+
   def GetProjects(self, args, missing_ok=False):
     """A list of projects that match the arguments.
     """
@@ -68,8 +68,9 @@ class Command(object):
     mp = self.manifest.manifestProject
 
     groups = mp.config.GetString('manifest.groups')
-    if groups:
-      groups = re.split('[,\s]+', groups)
+    if groups is None:
+      groups = 'default'
+    groups = [x for x in re.split('[,\s]+', groups) if x]
 
     if not args:
       for project in all.values():
diff --git a/docs/manifest-format.txt b/docs/manifest-format.txt
index e5f5ee18..764e41eb 100644
--- a/docs/manifest-format.txt
+++ b/docs/manifest-format.txt
@@ -165,8 +165,8 @@ been extensively tested.  If not supplied the revision given by
 the default element is used.
 
 Attribute `groups`: List of groups to which this project belongs,
-whitespace or comma separated.  All projects are part of the group
-"default" unless "-default" is specified in the list of groups.
+whitespace or comma separated.  All projects belong to the group
+"default".
 
 Element annotation
 ------------------
diff --git a/manifest_xml.py b/manifest_xml.py
index 9b804da9..5ffc49e9 100644
--- a/manifest_xml.py
+++ b/manifest_xml.py
@@ -122,8 +122,9 @@ class XmlManifest(object):
     mp = self.manifestProject
 
     groups = mp.config.GetString('manifest.groups')
-    if groups:
-      groups = re.split('[,\s]+', groups)
+    if groups is None:
+      groups = 'default'
+    groups = [x for x in re.split(r'[,\s]+', groups) if x]
 
     doc = xml.dom.minidom.Document()
     root = doc.createElement('manifest')
@@ -200,8 +201,9 @@ class XmlManifest(object):
         ce.setAttribute('dest', c.dest)
         e.appendChild(ce)
 
-      if p.groups:
-        e.setAttribute('groups', ','.join(p.groups))
+      egroups = [g for g in p.groups if g != 'default']
+      if egroups:
+        e.setAttribute('groups', ','.join(egroups))
 
       for a in p.annotations:
         if a.keep == "true":
@@ -524,11 +526,12 @@ class XmlManifest(object):
     else:
       rebase = rebase.lower() in ("yes", "true", "1")
 
-    groups = node.getAttribute('groups')
-    if groups:
-      groups = re.split('[,\s]+', groups)
-    else:
-      groups = None
+    groups = ''
+    if node.hasAttribute('groups'):
+      groups = node.getAttribute('groups')
+    groups = [x for x in re.split('[,\s]+', groups) if x]
+    if 'default' not in groups:
+      groups.append('default')
 
     if self.IsMirror:
       relpath = None
diff --git a/project.py b/project.py
index e297926d..2b740007 100644
--- a/project.py
+++ b/project.py
@@ -657,41 +657,21 @@ class Project(object):
     """Returns true if the manifest groups specified at init should cause
        this project to be synced.
        Prefixing a manifest group with "-" inverts the meaning of a group.
-       All projects are implicitly labelled with "default" unless they are
-       explicitly labelled "-default".
-       If any non-inverted manifest groups are specified, the default label
-       is ignored.
-       Specifying only inverted groups implies "default".
+       All projects are implicitly labelled with "default".
+
+       labels are resolved in order.  In the example case of
+       project_groups: "default,group1,group2"
+       manifest_groups: "-group1,group2"
+       the project will be matched.
     """
-    project_groups = self.groups
-    if not manifest_groups:
-      return not project_groups or not "-default" in project_groups
+    matched = False
+    for group in manifest_groups:
+      if group.startswith('-') and group[1:] in self.groups:
+        matched = False
+      elif group in self.groups:
+        matched = True
 
-    if not project_groups:
-      project_groups = ["default"]
-    elif not ("default" in project_groups or "-default" in project_groups):
-      project_groups.append("default")
-
-    plus_groups = [x for x in manifest_groups if not x.startswith("-")]
-    minus_groups = [x[1:] for x in manifest_groups if x.startswith("-")]
-
-    if not plus_groups:
-      plus_groups.append("default")
-
-    for group in minus_groups:
-      if group in project_groups:
-        # project was excluded by -group
-        return False
-
-    for group in plus_groups:
-      if group in project_groups:
-        # project was included by group
-        return True
-
-    # groups were specified that did not include this project
-    if plus_groups:
-      return False
-    return True
+    return matched
 
 ## Status Display ##
 
diff --git a/repo b/repo
index 75fe9ec2..0aabc0d8 100755
--- a/repo
+++ b/repo
@@ -28,7 +28,7 @@ if __name__ == '__main__':
 del magic
 
 # increment this whenever we make important changes to this script
-VERSION = (1, 15)
+VERSION = (1, 16)
 
 # increment this if the MAINTAINER_KEYS block is modified
 KEYRING_VERSION = (1,0)
@@ -126,7 +126,7 @@ group.add_option('--depth', type='int', default=None,
                  dest='depth',
                  help='create a shallow clone with given depth; see git clone')
 group.add_option('-g', '--groups',
-                 dest='groups', default="",
+                 dest='groups', default='default',
                  help='restrict manifest projects to ones with a specified group',
                  metavar='GROUP')
 
diff --git a/subcmds/init.py b/subcmds/init.py
index 6cf39d14..d1c497c1 100644
--- a/subcmds/init.py
+++ b/subcmds/init.py
@@ -14,6 +14,7 @@
 # limitations under the License.
 
 import os
+import re
 import shutil
 import sys
 
@@ -87,7 +88,7 @@ to update the working directory files.
                  dest='depth',
                  help='create a shallow clone with given depth; see git clone')
     g.add_option('-g', '--groups',
-                 dest='groups', default="",
+                 dest='groups', default='default',
                  help='restrict manifest projects to ones with a specified group',
                  metavar='GROUP')
 
@@ -139,7 +140,12 @@ to update the working directory files.
       r.ResetFetch()
       r.Save()
 
-    m.config.SetString('manifest.groups', opt.groups)
+    groups = re.split('[,\s]+', opt.groups)
+    groups = [x for x in groups if x]
+    groupstr = ','.join(groups)
+    if groupstr == 'default':
+      groupstr = None
+    m.config.SetString('manifest.groups', groupstr)
 
     if opt.reference:
       m.config.SetString('repo.reference', opt.reference)