--- a/mobile/android/base/java/org/mozilla/gecko/tabs/TabsGridLayout.java
+++ b/mobile/android/base/java/org/mozilla/gecko/tabs/TabsGridLayout.java
@@ -1,45 +1,55 @@
 /* -*- Mode: Java; c-basic-offset: 4; tab-width: 20; indent-tabs-mode: nil; -*-
 /* This Source Code Form is subject to the terms of the Mozilla Public
  * License, v. 2.0. If a copy of the MPL was not distributed with this file,
  * You can obtain one at http://mozilla.org/MPL/2.0/. */
 
 package org.mozilla.gecko.tabs;
 
 import org.mozilla.gecko.R;
+import org.mozilla.gecko.widget.GridSpacingDecoration;
 
 import android.content.Context;
 import android.content.res.Resources;
 import android.support.v7.widget.GridLayoutManager;
 import android.support.v7.widget.helper.ItemTouchHelper;
 import android.util.AttributeSet;
+import android.util.Log;
 
 public class TabsGridLayout extends TabsLayout {
-    private final int desiredColumnWidth;
+    private static final String LOGTAG = "Gecko" + TabsGridLayout.class.getSimpleName();
+
+    private GridSpacingDecoration spacingDecoration;
+    private final int desiredItemWidth;
+    private final int desiredHorizontalItemSpacing;
+    private final int minHorizontalItemSpacing;
+    private final int verticalItemPadding;
 
     public TabsGridLayout(Context context, AttributeSet attrs) {
         super(context, attrs, R.layout.tabs_layout_item_view);
 
         final Resources resources = context.getResources();
 
+        // Actual span count is updated in onSizeChanged.
         setLayoutManager(new GridLayoutManager(context, 1));
 
-        desiredColumnWidth = resources.getDimensionPixelSize(R.dimen.tab_panel_item_width);
+        desiredItemWidth = resources.getDimensionPixelSize(R.dimen.tab_panel_item_width);
+        desiredHorizontalItemSpacing = resources.getDimensionPixelSize(R.dimen.tab_panel_grid_ideal_item_hspacing);
+        minHorizontalItemSpacing = resources.getDimensionPixelOffset(R.dimen.tab_panel_grid_min_item_hspacing);
+        verticalItemPadding = resources.getDimensionPixelSize(R.dimen.tab_panel_grid_item_vpadding);
         final int viewPaddingHorizontal = resources.getDimensionPixelSize(R.dimen.tab_panel_grid_hpadding);
         final int viewPaddingVertical = resources.getDimensionPixelSize(R.dimen.tab_panel_grid_vpadding);
 
         setPadding(viewPaddingHorizontal, viewPaddingVertical, viewPaddingHorizontal, viewPaddingVertical);
         setClipToPadding(false);
         setScrollBarStyle(SCROLLBARS_OUTSIDE_OVERLAY);
 
         setItemAnimator(new TabsGridLayoutAnimator());
 
-        // TODO Add ItemDecoration.
-
         // A TouchHelper handler for swipe to close.
         final TabsTouchHelperCallback callback = new TabsTouchHelperCallback(this) {
             @Override
             protected float alphaForItemSwipeDx(float dX, int distanceToAlphaMin) {
                 return 1f - 2f * Math.abs(dX) / distanceToAlphaMin;
             }
         };
         final ItemTouchHelper touchHelper = new ItemTouchHelper(callback);
@@ -61,28 +71,64 @@ public class TabsGridLayout extends Tabs
         // When you add an item at the first visible position to a GridLayoutManager and there's
         // room to scroll, RecyclerView scrolls the new position to anywhere from near the bottom of
         // its row to completely offscreen (for unknown reasons), so we need to scroll to fix that.
         // We also scroll when the item being added is the only item on the final row.
         return index == firstVisibleIndex ||
                 (index == getAdapter().getItemCount() - 1 && index % spanCount == 0);
     }
 
+    private void updateSpacingDecoration(int horizontalItemSpacing) {
+        if (spacingDecoration != null) {
+            removeItemDecoration(spacingDecoration);
+        }
+        spacingDecoration = new GridSpacingDecoration(horizontalItemSpacing, verticalItemPadding);
+        addItemDecoration(spacingDecoration);
+        updateSelectedPosition();
+    }
+
     @Override
     public void onSizeChanged(int w, int h, int oldw, int oldh) {
         super.onSizeChanged(w, h, oldw, oldh);
 
         if (w == oldw) {
             return;
         }
 
-        // TODO This is temporary - we need to take into account item padding and we'll also try to
-        // match the previous GridLayout span count.
+        final GridLayoutManager layoutManager = (GridLayoutManager) getLayoutManager();
+
         final int nonPaddingWidth = w - getPaddingLeft() - getPaddingRight();
-        // Adjust span based on space available (what GridView does when you say numColumns="auto_fit").
-        final int spanCount = Math.max(1, nonPaddingWidth / desiredColumnWidth);
-        final GridLayoutManager layoutManager = (GridLayoutManager) getLayoutManager();
-        if (spanCount == layoutManager.getSpanCount()) {
-            return;
+        // We lay out the tabs so that the outer two tab edges are butted up against the
+        // RecyclerView padding, and then all other tab edges get their own padding, so
+        // nonPaddingWidth in terms of tab width w and tab spacing s for n tabs is
+        //   n * w + (n - 1) * s
+        // Solving for n gives the formulas below.
+        final int idealSpacingSpanCount = Math.max(1,
+                (nonPaddingWidth + desiredHorizontalItemSpacing) / (desiredItemWidth + desiredHorizontalItemSpacing));
+        final int maxSpanCount = Math.max(1,
+                (nonPaddingWidth + minHorizontalItemSpacing) / (desiredItemWidth + minHorizontalItemSpacing));
+
+        // General caution note: span count can change here at a point where some ItemDecorations
+        // have been computed and some have not, and Android doesn't recompute ItemDecorations after
+        // a setSpanCount call, so we need to always remove and then add back our spacingDecoration
+        // (whose computations depend on spanCount) in order to get a full layout recompute.
+        if (idealSpacingSpanCount == maxSpanCount) {
+            layoutManager.setSpanCount(idealSpacingSpanCount);
+            updateSpacingDecoration(desiredHorizontalItemSpacing);
+        } else {
+            // We're gaining a column by decreasing the item spacing - this actually turns out to be
+            // necessary to fit three columns in landscape mode on many phones.  It also allows us
+            // to match the span counts produced by the previous GridLayout implementation.
+            layoutManager.setSpanCount(maxSpanCount);
+
+            // Increase the spacing as much as we can without giving up our increased span count.
+            for (int spacing = minHorizontalItemSpacing + 1; spacing <= desiredHorizontalItemSpacing; spacing++) {
+                if (maxSpanCount * desiredItemWidth + (maxSpanCount - 1) * spacing > nonPaddingWidth) {
+                    updateSpacingDecoration(spacing - 1);
+                    return;
+                }
+            }
+            // We should never get here if our calculations above were correct.
+            Log.e(LOGTAG, "Span count calculation error");
+            updateSpacingDecoration(minHorizontalItemSpacing);
         }
-        layoutManager.setSpanCount(spanCount);
     }
 }

--- a/mobile/android/base/java/org/mozilla/gecko/tabs/TabsLayout.java
+++ b/mobile/android/base/java/org/mozilla/gecko/tabs/TabsLayout.java
@@ -145,17 +145,17 @@ public abstract class TabsLayout extends
             return;
         }
 
         autoHidePanel();
         Tabs.getInstance().notifyListeners(tab, Tabs.TabEvents.OPENED_FROM_TABS_TRAY);
     }
 
     /** Updates the selected position in the list so that it will be scrolled to the right place. */
-    private void updateSelectedPosition() {
+    protected void updateSelectedPosition() {
         final int selected = getSelectedAdapterPosition();
         if (selected != NO_POSITION) {
             scrollToPosition(selected);
         }
     }
 
     private void refreshTabsData() {
         // Store a different copy of the tabs, so that we don't have to worry about

new file mode 100644
--- /dev/null
+++ b/mobile/android/base/java/org/mozilla/gecko/widget/GridSpacingDecoration.java
@@ -0,0 +1,48 @@
+/* -*- Mode: Java; c-basic-offset: 4; tab-width: 20; indent-tabs-mode: nil; -*-
+/* This Source Code Form is subject to the terms of the Mozilla Public
+ * License, v. 2.0. If a copy of the MPL was not distributed with this file,
+ * You can obtain one at http://mozilla.org/MPL/2.0/. */
+
+package org.mozilla.gecko.widget;
+
+import android.graphics.Rect;
+import android.support.v7.widget.GridLayoutManager;
+import android.support.v7.widget.RecyclerView;
+import android.view.View;
+
+/**
+ * An ItemDecoration for a GridLayoutManager that provides fixed spacing (but not fixed padding)
+ * to create fixed sized items, with no spacing on the outer edges of the outer items.
+ * <p>
+ * So, for example, if there are 2 columns and the spacing is s, then the first column gets a right
+ * padding of s/2 and the second column gets a left paddding of s/2.  If there are three columns
+ * then the first column gets a right padding of 2s/3, the second column gets left and right
+ * paddings of s/3, and the third column gets a left padding of 2s/3.
+ * </p>
+ */
+public class GridSpacingDecoration extends RecyclerView.ItemDecoration {
+    private final int horizontalSpacing;
+    private final int verticalPadding;
+
+    public GridSpacingDecoration(int horizontalSpacing, int verticalPadding) {
+        this.horizontalSpacing = horizontalSpacing;
+        this.verticalPadding = verticalPadding;
+    }
+
+    @Override
+    public void getItemOffsets(Rect outRect, View view, RecyclerView parent, RecyclerView.State state) {
+        final int position = parent.getChildAdapterPosition(view);
+        if (position == RecyclerView.NO_POSITION) {
+            return;
+        }
+
+        final GridLayoutManager layoutManager = (GridLayoutManager) parent.getLayoutManager();
+        final int spanCount = layoutManager.getSpanCount();
+        final int column = position % spanCount;
+
+        final int columnLeftOffset = (int) (((float) column / (float) spanCount) * horizontalSpacing);
+        final int columnRightOffset = (int) (((float) (spanCount - (column + 1)) / (float) spanCount) * horizontalSpacing);
+
+        outRect.set(columnLeftOffset, verticalPadding, columnRightOffset, verticalPadding);
+    }
+}

--- a/mobile/android/base/moz.build
+++ b/mobile/android/base/moz.build
@@ -765,16 +765,17 @@ gbjar.sources += ['java/org/mozilla/geck
     'widget/FadedMultiColorTextView.java',
     'widget/FadedSingleColorTextView.java',
     'widget/FadedTextView.java',
     'widget/FaviconView.java',
     'widget/FilledCardView.java',
     'widget/FlowLayout.java',
     'widget/GeckoActionProvider.java',
     'widget/GeckoPopupMenu.java',
+    'widget/GridSpacingDecoration.java',
     'widget/HistoryDividerItemDecoration.java',
     'widget/IconTabWidget.java',
     'widget/LoginDoorHanger.java',
     'widget/RecyclerViewClickSupport.java',
     'widget/ResizablePathDrawable.java',
     'widget/RoundedCornerLayout.java',
     'widget/SiteLogins.java',
     'widget/SquaredImageView.java',

--- a/mobile/android/base/resources/layout/tabs_layout_item_view.xml
+++ b/mobile/android/base/resources/layout/tabs_layout_item_view.xml
@@ -2,25 +2,27 @@
 <!-- This Source Code Form is subject to the terms of the Mozilla Public
    - License, v. 2.0. If a copy of the MPL was not distributed with this
    - file, You can obtain one at http://mozilla.org/MPL/2.0/. -->
 
 <org.mozilla.gecko.tabs.TabsLayoutItemView xmlns:android="http://schemas.android.com/apk/res/android"
                                            xmlns:gecko="http://schemas.android.com/apk/res-auto"
                                            style="@style/TabsItem"
                                            android:id="@+id/info"
-                                           android:layout_width="fill_parent"
+                                           android:layout_width="match_parent"
                                            android:layout_height="wrap_content"
                                            android:gravity="center"
                                            android:orientation="vertical">
 
-    <LinearLayout android:layout_width="@dimen/tab_thumbnail_width"
+    <LinearLayout android:layout_width="match_parent"
                   android:layout_height="wrap_content"
                   android:orientation="horizontal"
                   android:duplicateParentState="true"
+                  android:paddingLeft="@dimen/tab_highlight_stroke_width"
+                  android:paddingRight="@dimen/tab_highlight_stroke_width"
                   android:paddingBottom="@dimen/tab_highlight_stroke_width">
 
        <org.mozilla.gecko.widget.FadedSingleColorTextView
                android:id="@+id/title"
                android:layout_width="0dip"
                android:layout_height="wrap_content"
                android:layout_weight="1.0"
                style="@style/TabLayoutItemTextAppearance"
@@ -53,17 +55,17 @@
             android:layout_width="wrap_content"
             android:layout_height="wrap_content"
             android:padding="@dimen/tab_highlight_stroke_width"
             android:background="@drawable/tab_thumbnail"
             android:duplicateParentState="true"
             android:clipToPadding="false">
 
         <org.mozilla.gecko.tabs.TabsPanelThumbnailView android:id="@+id/thumbnail"
-                                                       android:layout_width="@dimen/tab_thumbnail_width"
-                                                       android:layout_height="@dimen/tab_thumbnail_height"
+                                                       android:layout_width="match_parent"
+                                                       android:layout_height="wrap_content"
                                                        android:elevation="2dp"
                                                        android:outlineProvider="bounds"
                                                 />
 
     </org.mozilla.gecko.widget.TabThumbnailWrapper>
 
 </org.mozilla.gecko.tabs.TabsLayoutItemView>

--- a/mobile/android/base/resources/values/dimens.xml
+++ b/mobile/android/base/resources/values/dimens.xml
@@ -142,17 +142,18 @@
     <dimen name="validation_message_height">50dp</dimen>
     <dimen name="validation_message_margin_top">6dp</dimen>
 
     <dimen name="tab_thumbnail_width">121dp</dimen>
     <dimen name="tab_thumbnail_height">90dp</dimen>
     <dimen name="tab_panel_item_width">129dp</dimen>
     <dimen name="tab_panel_grid_hpadding">20dp</dimen>
     <dimen name="tab_panel_grid_vpadding">19dp</dimen>
-    <dimen name="tab_panel_grid_item_hpadding">1dp</dimen>
+    <dimen name="tab_panel_grid_ideal_item_hspacing">20dp</dimen>
+    <dimen name="tab_panel_grid_min_item_hspacing">2dp</dimen>
     <dimen name="tab_panel_grid_item_vpadding">10dp</dimen>
 
     <dimen name="tab_highlight_stroke_width">4dp</dimen>
 
     <!-- PageActionButtons dimensions -->
     <dimen name="page_action_button_width">32dp</dimen>
 
     <!-- Banner -->