diff --git a/config/schema/dynamic_entity_reference.schema.yml b/config/schema/dynamic_entity_reference.schema.yml
index 1c6d275..9aabf7c 100644
--- a/config/schema/dynamic_entity_reference.schema.yml
+++ b/config/schema/dynamic_entity_reference.schema.yml
@@ -18,15 +18,18 @@ field.storage_settings.dynamic_entity_reference:
           label: 'Entity Type ID'
 
 field.field_settings.dynamic_entity_reference:
-  type: mapping
+  type: sequence
   label: 'Dynamic entity reference settings'
-  mapping:
-    handler:
-      type: string
-      label: 'Reference method'
-    handler_settings:
-      type: entity_reference.[%parent.handler].handler_settings
-      label: 'Reference method settings'
+  sequence:
+    - type: mapping
+      label: 'Entity Type ID'
+      mapping:
+        handler:
+          type: string
+          label: 'Reference method'
+        handler_settings:
+          type: entity_reference.[%parent.handler].handler_settings
+          label: 'Reference method settings'
 
 field.value.dynamic_entity_reference:
   type: mapping
diff --git a/src/Plugin/Field/FieldType/DynamicEntityReferenceItem.php b/src/Plugin/Field/FieldType/DynamicEntityReferenceItem.php
index e48bf98..0f64f86 100644
--- a/src/Plugin/Field/FieldType/DynamicEntityReferenceItem.php
+++ b/src/Plugin/Field/FieldType/DynamicEntityReferenceItem.php
@@ -1,4 +1,5 @@
 <?php
+
 /**
  * @file
  * Contains \Drupal\dynamic_entity_reference\Plugin\Field\FieldType\DynamicEntityReferenceItem.
@@ -6,7 +7,9 @@
 
 namespace Drupal\dynamic_entity_reference\Plugin\Field\FieldType;
 
+use Drupal\Core\Config\Entity\ConfigEntityType;
 use Drupal\Core\Entity\EntityTypeInterface;
+use Drupal\Core\Field\FieldDefinitionInterface;
 use Drupal\Core\Field\FieldStorageDefinitionInterface;
 use Drupal\Core\Form\FormStateInterface;
 use Drupal\Core\TypedData\DataDefinition;
@@ -39,16 +42,26 @@ class DynamicEntityReferenceItem extends ConfigurableEntityReferenceItem {
     return array(
       'exclude_entity_types' => TRUE,
       'entity_type_ids' => array(),
-    ) + parent::defaultStorageSettings();
+    );
   }
 
   /**
    * {@inheritdoc}
    */
   public static function defaultFieldSettings() {
-    return array(
-      'handler' => 'default',
-    ) + parent::defaultFieldSettings();
+    $default_settings = array();
+    $labels = \Drupal::entityManager()->getEntityTypeLabels(TRUE);
+    $options = $labels['Content'];
+    // Field storage settings are not accessible here so we are assuming that
+    // all the entity types are referenceable by default.
+    // see https://www.drupal.org/node/2346273#comment-9385179 for more details.
+    foreach (array_keys($options) as $entity_type_id) {
+      $default_settings[$entity_type_id] = array(
+        'handler' => 'default',
+        'handler_settings' => array(),
+      );
+    }
+    return $default_settings;
   }
 
   /**
@@ -126,7 +139,6 @@ class DynamicEntityReferenceItem extends ConfigurableEntityReferenceItem {
 
   /**
    * {@inheritdoc}
-   * @todo update
    */
   public function storageSettingsForm(array &$form, FormStateInterface $form_state, $has_data) {
     // @todo inject this.
@@ -155,7 +167,20 @@ class DynamicEntityReferenceItem extends ConfigurableEntityReferenceItem {
    * {@inheritdoc}
    */
   public function fieldSettingsForm(array $form, FormStateInterface $form_state) {
-    return array();
+
+    $settings_form = array();
+    $field = $form_state->get('field');
+    $settings = $this->getSettings();
+    $entity_type_ids = static::getAllEntityTypeIds($settings);
+    foreach (array_keys($entity_type_ids) as $entity_type_id) {
+      // We put the dummy value here so selection plugins can work.
+      $field->settings['target_type'] = $entity_type_id;
+      $field->settings['handler'] = $settings[$entity_type_id]['handler'];
+      $field->settings['handler_settings'] = $settings[$entity_type_id]['handler_settings'];
+      $settings_form[$entity_type_id] = parent::fieldSettingsForm($form, $form_state);
+      $settings_form[$entity_type_id]['handler']['#title'] = t('Reference type for @entity_type_id', array('@entity_type_id' => $entity_type_ids[$entity_type_id]));
+    }
+    return $settings_form;
   }
 
   /**
@@ -165,11 +190,18 @@ class DynamicEntityReferenceItem extends ConfigurableEntityReferenceItem {
    *   The form where the settings form is being included in.
    * @param \Drupal\Core\Form\FormStateInterface $form_state
    *   The form state of the (entire) configuration form.
-   * @todo update
    */
   public static function fieldSettingsFormValidate(array $form, FormStateInterface $form_state) {
     if ($form_state->hasValue('field')) {
-      $form_state->unsetValue(array('field', 'settings', 'handler_submit'));
+      $settings = $form_state->getValue(array('field', 'settings'));
+      foreach (array_keys($settings) as $entity_typ_id) {
+        $form_state->unsetValue(array(
+          'field',
+          'settings',
+          $entity_typ_id,
+          'handler_submit',
+        ));
+      }
       $form_state->get('field')->settings = $form_state->getValue(array('field', 'settings'));
     }
   }
@@ -212,9 +244,56 @@ class DynamicEntityReferenceItem extends ConfigurableEntityReferenceItem {
     // ::hasNewEntity() will return FALSE but $this->target_id will still be
     // empty.
     if ((empty($this->target_id) || empty($this->target_type)) && $this->entity) {
-      $this->target_id = $this->entity->id();
-      $this->target_type = $this->entity->getEntityTypeId();
+      $this->set('target_id', $this->entity->id(), FALSE);
+      $this->set('target_type', $this->entity->getEntityTypeId(), FALSE);
+    }
+  }
+
+  /**
+   * Helper function to get all the entity type ids that can be referenced.
+   *
+   * @param array $settings
+   *   The settings of the field storage.
+   *
+   * @return string[]
+   *   All the entity type ids that can be referenced.
+   */
+  protected static function getAllEntityTypeIds($settings) {
+    $labels = \Drupal::entityManager()->getEntityTypeLabels(TRUE);
+    $options = $labels['Content'];
+
+    if ($settings['exclude_entity_types']) {
+      $entity_type_ids = array_diff_key($options, $settings['entity_type_ids'] ?: array());
+    }
+    else {
+      $entity_type_ids = array_intersect_key($options, $settings['entity_type_ids'] ?: array());
+    }
+    return $entity_type_ids;
+  }
+
+  /**
+   * {@inheritdoc}
+   */
+  public static function calculateDependencies(FieldDefinitionInterface $field_definition) {
+    $dependencies = [];
+
+    if (is_array($field_definition->default_value) && count($field_definition->default_value)) {
+      $target_entity_types = static::getAllEntityTypeIds($field_definition->getFieldStorageDefinition()->getSettings());
+      foreach ($target_entity_types as $target_entity_type) {
+        $key = $target_entity_type instanceof ConfigEntityType ? 'config' : 'content';
+        foreach ($field_definition->default_value as $default_value) {
+          if (is_array($default_value) && isset($default_value['target_uuid'])) {
+            $entity = \Drupal::entityManager()->loadEntityByUuid($target_entity_type->id(), $default_value['target_uuid']);
+            // If the entity does not exist do not create the dependency.
+            // @see \Drupal\Core\Field\EntityReferenceFieldItemList::processDefaultValue()
+            if ($entity) {
+              $dependencies[$key][] = $entity->getConfigDependencyName();
+            }
+          }
+        }
+      }
     }
+    return $dependencies;
   }
 
 }
diff --git a/src/Plugin/Field/FieldWidget/DynamicEntityReferenceWidget.php b/src/Plugin/Field/FieldWidget/DynamicEntityReferenceWidget.php
index c197546..962ed3d 100644
--- a/src/Plugin/Field/FieldWidget/DynamicEntityReferenceWidget.php
+++ b/src/Plugin/Field/FieldWidget/DynamicEntityReferenceWidget.php
@@ -108,8 +108,10 @@ class DynamicEntityReferenceWidget extends AutocompleteWidget {
    * Checks whether a content entity is referenced.
    *
    * @param string $target_type
-   *   The value target entity type
+   *   The value target entity type.
+   *
    * @return bool
+   *   TRUE if a content entity is referenced.
    */
   protected function isContentReferenced($target_type = NULL) {
     $target_type_info = \Drupal::entityManager()->getDefinition($target_type);
@@ -125,10 +127,17 @@ class DynamicEntityReferenceWidget extends AutocompleteWidget {
     if (!empty($element['#value'])) {
       // If this is the default value of the field.
       if ($form_state->hasValue('default_value_input')) {
-        $values = $form_state->getValue(array('default_value_input', $element['#field_name'], $element['#delta']));
+        $values = $form_state->getValue(array(
+          'default_value_input',
+          $element['#field_name'],
+          $element['#delta'],
+        ));
       }
       else {
-        $values = $form_state->getValue(array($element['#field_name'], $element['#delta']));
+        $values = $form_state->getValue(array(
+          $element['#field_name'],
+          $element['#delta'],
+        ));
       }
       // Take "label (entity id)', match the id from parenthesis.
       if ($this->isContentReferenced($values['target_type']) && preg_match("/.+\((\d+)\)/", $element['#value'], $matches)) {
@@ -137,10 +146,29 @@ class DynamicEntityReferenceWidget extends AutocompleteWidget {
       elseif (preg_match("/.+\(([\w.]+)\)/", $element['#value'], $matches)) {
         $value = $matches[1];
       }
-      if (!$value) {
-        // Try to get a match from the input string when the user didn't use the
-        // autocomplete but filled in a value manually.
-        $value = $this->validateAutocompleteInput($values['target_type'], $element['#value'], $element, $form_state, $form);
+      $auto_create = $this->getHandlerSetting('auto_create', $values['target_type']);
+      // Try to get a match from the input string when the user didn't use the
+      // autocomplete but filled in a value manually.
+      if ($value === NULL) {
+        // To use entity_reference selection_handler for this target_type we
+        // have to change these settings to entity_reference field settings.
+        $this->fakeFieldSettings($values['target_type']);
+        /** @var \Drupal\entity_reference\Plugin\Type\Selection\SelectionInterface $handler */
+        $handler = \Drupal::service('plugin.manager.entity_reference.selection')->getSelectionHandler($this->fieldDefinition);
+        $value = $handler->validateAutocompleteInput($element['#value'], $element, $form_state, $form, !$auto_create);
+      }
+      // Auto-create item. See
+      // \Drupal\Core\Field\Plugin\Field\FieldType\EntityReferenceItem::presave().
+      if (!$value && $auto_create && (count($this->getHandlerSetting('target_bundles', $values['target_type'])) == 1)) {
+        $value = array(
+          'target_id' => NULL,
+          'entity' => $this->createNewEntity($element['#value'], $element['#autocreate_uid']),
+          // Keep the weight property.
+          '_weight' => $element['#weight'],
+        );
+        // Change the element['#parents'], so in form_set_value() we populate
+        // the correct key.
+        array_pop($element['#parents']);
       }
 
     }
@@ -148,55 +176,37 @@ class DynamicEntityReferenceWidget extends AutocompleteWidget {
   }
 
   /**
-   * {@inheritdoc}
+   * Sets the fake field settings values.
+   *
+   * These settings are required by
+   * \Drupal\entity_reference\Plugin\Type\SelectionPluginManager to select the
+   * proper selection plugin and these settings are also used by
+   * \Drupal\entity_reference\Plugin\entity_reference\selection\SelectionBase
+   *
+   * @param string $entity_type_id
+   *   The id of the entity type.
    */
-  public function validateAutocompleteInput($target_type, $input, &$element, FormStateInterface $form_state, $form) {
-    // @todo Make this a service.
-    $controller = new DynamicEntityReferenceController(\Drupal::service('entity.query'));
-    $bundled_entities = $controller->getReferenceableEntities($target_type, $input, '=', 6);
-    $params = array(
-      '%value' => $input,
-      '@value' => $input,
-    );
-    $entities = array();
-    foreach ($bundled_entities as $entities_list) {
-      $entities += $entities_list;
-    }
-    if (empty($entities)) {
-      // Error if there are no entities available for a required field.
-      $form_state->setError($element, t('There are no entities matching "%value".', $params));
-    }
-    elseif (count($entities) > 5) {
-      $params['@id'] = key($entities);
-      // Error if there are more than 5 matching entities.
-      $form_state->setError($element, t('Many entities are called %value. Specify the one you want by appending the id in parentheses, like "@value (@id)".', $params));
-    }
-    elseif (count($entities) > 1) {
-      // More helpful error if there are only a few matching entities.
-      $multiples = array();
-      foreach ($entities as $id => $name) {
-        $multiples[] = $name . ' (' . $id . ')';
-      }
-      $params['@id'] = $id;
-      $params['%multiple'] = implode('", "', $multiples);
-      $form_state->setError($element, t('Multiple entities match this reference; "%multiple". Specify the one you want by appending the id in parentheses, like "@value (@id)".', $params));
-    }
-    else {
-      // Take the one and only matching entity.
-      return key($entities);
-    }
+  protected function fakeFieldSettings($entity_type_id) {
+    $settings = $this->getFieldSettings();
+    $this->fieldDefinition->settings['target_type'] = $entity_type_id;
+    $this->fieldDefinition->settings['handler'] = $settings[$entity_type_id]['handler'];
+    $this->fieldDefinition->settings['handler_settings'] = $settings[$entity_type_id]['handler_settings'];
   }
 
   /**
-   * {@inheritdoc}
+   * Returns the value of a setting for the entity reference selection handler.
+   *
+   * @param string $setting_name
+   *   The setting name.
+   * @param string $entity_type_id
+   *   The id of the entity type.
+   *
+   * @return mixed
+   *   The setting value.
    */
-  protected function getEntityType(FieldItemListInterface $items, $delta) {
-    // The autocomplete widget outputs one entity label per form element.
-    if (isset($items[$delta])) {
-      return $items[$delta]->target_type;
-    }
-
-    return FALSE;
+  protected function getHandlerSetting($setting_name, $entity_type_id) {
+    $settings = $this->getFieldSettings();
+    return isset($settings[$entity_type_id]['handler_settings'][$setting_name]) ? $settings[$entity_type_id]['handler_settings'][$setting_name] : NULL;
   }
 
 }
diff --git a/src/Tests/DynamicEntityReferenceSchemaTest.php b/src/Tests/DynamicEntityReferenceSchemaTest.php
index 3fa73b1..221b72f 100644
--- a/src/Tests/DynamicEntityReferenceSchemaTest.php
+++ b/src/Tests/DynamicEntityReferenceSchemaTest.php
@@ -60,7 +60,20 @@ class DynamicEntityReferenceSchemaTest extends EntityUnitTestBase {
       'entity_type' => 'entity_test',
       'field_name' => 'field_test',
       'bundle' => 'entity_test',
-      'settings' => array(),
+      'settings' => array(
+        'entity_test' => array(
+          'handler' => 'default',
+          'handler_settings' => array(
+            'target_bundles' => array(
+              'entity_test' => 'entity_test',
+            ),
+            'sort' => array(
+              'field' => '_none',
+            ),
+            'auto_create' => FALSE,
+          ),
+        ),
+      ),
     ));
     $entity_storage= \Drupal::entityManager()->getStorage('entity_test');
     $referenced_entity = $entity_storage->create(array());
diff --git a/src/Tests/DynamicEntityReferenceTest.php b/src/Tests/DynamicEntityReferenceTest.php
index 37a96a6..dbb8818 100644
--- a/src/Tests/DynamicEntityReferenceTest.php
+++ b/src/Tests/DynamicEntityReferenceTest.php
@@ -7,9 +7,14 @@
 
 namespace Drupal\dynamic_entity_reference\Tests;
 
+use Drupal\Component\Utility\Unicode;
+use Drupal\Core\Field\FieldStorageDefinitionInterface;
+use Drupal\Core\Language\LanguageInterface;
 use Drupal\field\Entity\FieldConfig;
 use Drupal\field\Entity\FieldStorageConfig;
 use Drupal\simpletest\WebTestBase;
+use Drupal\taxonomy\Entity\Term;
+use Drupal\taxonomy\Entity\Vocabulary;
 use Symfony\Component\CssSelector\CssSelector;
 
 /**
@@ -72,13 +77,31 @@ class DynamicEntityReferenceTest extends WebTestBase {
     );
     $this->drupalPostForm(NULL, $edit, t('Save'));
     $this->drupalPostForm(NULL, array(
-      'field_storage[cardinality]' => '-1',
+      'field_storage[cardinality]' => FieldStorageDefinitionInterface::CARDINALITY_UNLIMITED,
       'field_storage[settings][entity_type_ids][]' => 'user',
     ), t('Save field settings'));
     $this->assertFieldByName('default_value_input[field_foobar][0][target_type]');
     $this->assertFieldByXPath(CssSelector::toXPath('select[name="default_value_input[field_foobar][0][target_type]"] > option[value=entity_test]'), 'entity_test');
     $this->assertNoFieldByXPath(CssSelector::toXPath('select[name="default_value_input[field_foobar][0][target_type]"] > option[value=user]'), 'user');
-    $this->drupalPostForm(NULL, array(), t('Save settings'));
+    $edit = array(
+      'field[settings][entity_test_label][handler_settings][target_bundles][entity_test_label]' => TRUE,
+      'field[settings][entity_test_no_id][handler_settings][target_bundles][entity_test_no_id]' => TRUE,
+      'field[settings][entity_test_no_label][handler_settings][target_bundles][entity_test_no_label]' => TRUE,
+      'field[settings][entity_test_label_callback][handler_settings][target_bundles][entity_test_label_callback]' => TRUE,
+      'field[settings][entity_test][handler_settings][target_bundles][entity_test]' => TRUE,
+      'field[settings][entity_test_base_field_display][handler_settings][target_bundles][entity_test_base_field_display]' => TRUE,
+      'field[settings][entity_test_mul][handler_settings][target_bundles][entity_test_mul]' => TRUE,
+      'field[settings][entity_test_rev][handler_settings][target_bundles][entity_test_rev]' => TRUE,
+      'field[settings][entity_test_mulrev][handler_settings][target_bundles][entity_test_mulrev]' => TRUE,
+      'field[settings][entity_test_constraint_violation][handler_settings][target_bundles][entity_test_constraint_violation]' => TRUE,
+      'field[settings][entity_test_field_override][handler_settings][target_bundles][entity_test_field_override]' => TRUE,
+      'field[settings][entity_test_default_value][handler_settings][target_bundles][entity_test_default_value]' => TRUE,
+      'field[settings][entity_test_update][handler_settings][target_bundles][entity_test_update]' => TRUE,
+      'field[settings][entity_test_default_access][handler_settings][target_bundles][entity_test_default_access]' => TRUE,
+      'field[settings][entity_test_cache][handler_settings][target_bundles][entity_test_cache]' => TRUE,
+      'field[settings][entity_test_string_id][handler_settings][target_bundles][entity_test_string_id]' => TRUE,
+    );
+    $this->drupalPostForm(NULL, $edit, t('Save settings'));
     $this->assertRaw(t('Saved %name configuration', array('%name' => 'Foobar')));
     $excluded_entity_type_ids = FieldStorageConfig::loadByName('entity_test', 'field_foobar')
       ->getSetting('entity_type_ids');
@@ -87,7 +110,7 @@ class DynamicEntityReferenceTest extends WebTestBase {
     // Check the include entity settings.
     $this->drupalGet('entity_test/structure/entity_test/fields/entity_test.entity_test.field_foobar/storage');
     $this->drupalPostForm(NULL, array(
-      'field_storage[cardinality]' => '-1',
+      'field_storage[cardinality]' => FieldStorageDefinitionInterface::CARDINALITY_UNLIMITED,
       'field_storage[settings][exclude_entity_types]' => FALSE,
       'field_storage[settings][entity_type_ids][]' => 'user',
     ), t('Save field settings'));
@@ -101,7 +124,7 @@ class DynamicEntityReferenceTest extends WebTestBase {
       ->getSetting('entity_type_ids');
     $this->assertNotNull($excluded_entity_type_ids);
     $this->assertIdentical(array_keys($excluded_entity_type_ids), array('user'));
-
+    // Check the default settings.
     $this->drupalGet('entity_test/structure/entity_test/fields/entity_test.entity_test.field_foobar');
     $this->drupalPostForm(NULL, array(
       'default_value_input[field_foobar][0][target_type]' => 'user',
@@ -127,10 +150,28 @@ class DynamicEntityReferenceTest extends WebTestBase {
     );
     $this->drupalPostForm(NULL, $edit, t('Save'));
     $this->drupalPostForm(NULL, array(
-      'field_storage[cardinality]' => '-1',
+      'field_storage[cardinality]' => FieldStorageDefinitionInterface::CARDINALITY_UNLIMITED,
     ), t('Save field settings'));
 
-    $this->drupalPostForm(NULL, array(), t('Save settings'));
+    $edit = array(
+      'field[settings][entity_test_label][handler_settings][target_bundles][entity_test_label]' => TRUE,
+      'field[settings][entity_test_no_id][handler_settings][target_bundles][entity_test_no_id]' => TRUE,
+      'field[settings][entity_test_no_label][handler_settings][target_bundles][entity_test_no_label]' => TRUE,
+      'field[settings][entity_test_label_callback][handler_settings][target_bundles][entity_test_label_callback]' => TRUE,
+      'field[settings][entity_test][handler_settings][target_bundles][entity_test]' => TRUE,
+      'field[settings][entity_test_base_field_display][handler_settings][target_bundles][entity_test_base_field_display]' => TRUE,
+      'field[settings][entity_test_mul][handler_settings][target_bundles][entity_test_mul]' => TRUE,
+      'field[settings][entity_test_rev][handler_settings][target_bundles][entity_test_rev]' => TRUE,
+      'field[settings][entity_test_mulrev][handler_settings][target_bundles][entity_test_mulrev]' => TRUE,
+      'field[settings][entity_test_constraint_violation][handler_settings][target_bundles][entity_test_constraint_violation]' => TRUE,
+      'field[settings][entity_test_field_override][handler_settings][target_bundles][entity_test_field_override]' => TRUE,
+      'field[settings][entity_test_default_value][handler_settings][target_bundles][entity_test_default_value]' => TRUE,
+      'field[settings][entity_test_update][handler_settings][target_bundles][entity_test_update]' => TRUE,
+      'field[settings][entity_test_default_access][handler_settings][target_bundles][entity_test_default_access]' => TRUE,
+      'field[settings][entity_test_cache][handler_settings][target_bundles][entity_test_cache]' => TRUE,
+      'field[settings][entity_test_string_id][handler_settings][target_bundles][entity_test_string_id]' => TRUE,
+    );
+    $this->drupalPostForm(NULL, $edit, t('Save settings'));
     $this->assertRaw(t('Saved %name configuration', array('%name' => 'Foobar')));
 
     // Create some items to reference.
@@ -278,4 +319,77 @@ class DynamicEntityReferenceTest extends WebTestBase {
     $this->assertEqual($entity->field_foobar[1]->entity->label(), 'Bazbar');
   }
 
+  /**
+   * Tests entity auto creation using dynamic entity reference.
+   */
+  public function testDynamicEntityReferenceAutoCreate() {
+    \Drupal::service('module_installer')->install(array('taxonomy'));
+    $vocabulary = Vocabulary::create(array(
+      'name' => $this->randomMachineName(),
+      'vid' => Unicode::strtolower($this->randomMachineName()),
+      'langcode' => LanguageInterface::LANGCODE_NOT_SPECIFIED,
+    ));
+    $vocabulary->save();
+    $term = Term::create(array(
+        'name' => $this->randomMachineName(),
+        'vid' => $vocabulary->id(),
+        'langcode' => LanguageInterface::LANGCODE_NOT_SPECIFIED,
+    ));
+    $term->save();
+    $this->drupalLogin($this->adminUser);
+    // Add a new dynamic entity reference field.
+    $this->drupalGet('entity_test/structure/entity_test/fields');
+    $edit = array(
+      'fields[_add_new_field][label]' => 'Foobar',
+      'fields[_add_new_field][field_name]' => 'foobar',
+      'fields[_add_new_field][type]' => 'dynamic_entity_reference',
+    );
+    $this->drupalPostForm(NULL, $edit, t('Save'));
+    $this->drupalPostForm(NULL, array(
+      'field_storage[cardinality]' => FieldStorageDefinitionInterface::CARDINALITY_UNLIMITED,
+      'field_storage[settings][exclude_entity_types]' => FALSE,
+      'field_storage[settings][entity_type_ids][]' => array('taxonomy_term', 'user'),
+    ), t('Save field settings'));
+    $edit = array(
+      'field[settings][taxonomy_term][handler_settings][target_bundles]['. $vocabulary->id() .']' => $vocabulary->id(),
+      'field[settings][taxonomy_term][handler_settings][auto_create]' => TRUE,
+    );
+    $this->drupalPostForm(NULL, $edit, t('Save settings'));
+    $this->drupalGet('entity_test/add');
+
+    // Add some extra dynamic entity reference fields.
+    $this->drupalPostAjaxForm(NULL, array(), array('field_foobar_add_more' => t('Add another item')), 'system/ajax', array(), array(), 'entity-test-entity-test-form');
+    $this->drupalPostAjaxForm(NULL, array(), array('field_foobar_add_more' => t('Add another item')), 'system/ajax', array(), array(), 'entity-test-entity-test-form');
+    $edit = array(
+      'field_foobar[0][target_id]' => $this->adminUser->label() . ' (' . $this->adminUser->id() . ')',
+      'field_foobar[0][target_type]' => 'user',
+      // Add a non-existing term.
+      'field_foobar[1][target_id]' => 'tag',
+      'field_foobar[1][target_type]' => 'taxonomy_term',
+      'field_foobar[2][target_id]' => $term->label() . ' (' . $term->id() . ')',
+      'field_foobar[2][target_type]' => 'taxonomy_term',
+      'name[0][value]' => 'Barfoo',
+      'user_id[0][target_id]' => $this->adminUser->label() . ' (' . $this->adminUser->id() . ')',
+    );
+
+    $this->drupalPostForm(NULL, $edit, t('Save'));
+    $entities = entity_load_multiple_by_properties('entity_test', array(
+      'name' => 'Barfoo',
+    ));
+    $this->assertEqual(1, count($entities), 'Entity was saved');
+    $entity = reset($entities);
+
+    $this->assertEqual(count($entity->field_foobar), 3, 'Three items in field');
+    $this->assertEqual($entity->field_foobar[0]->entity->label(), $this->adminUser->label());
+    $this->assertEqual($entity->field_foobar[1]->entity->label(), 'tag');
+    $this->assertEqual($entity->field_foobar[2]->entity->label(), $term->label());
+
+    $this->drupalGet('entity_test/' . $entity->id());
+    $this->assertText('Barfoo');
+    $this->assertText($this->adminUser->label());
+    $this->assertText('tag');
+    $this->assertText($term->label());
+
+  }
+
 }