diff --git a/res/css/views/dialogs/_DMInviteDialog.scss b/res/css/views/dialogs/_DMInviteDialog.scss
index 1153ecb0d4..364c796f16 100644
--- a/res/css/views/dialogs/_DMInviteDialog.scss
+++ b/res/css/views/dialogs/_DMInviteDialog.scss
@@ -77,5 +77,9 @@ limitations under the License.
         float: right;
         line-height: 36px; // Height of the avatar to keep the time vertically aligned
     }
+
+    .mx_DMInviteDialog_roomTile_highlight {
+        font-weight: 900;
+    }
 }
 
diff --git a/src/components/views/dialogs/DMInviteDialog.js b/src/components/views/dialogs/DMInviteDialog.js
index 2854c914f8..c5e9c92131 100644
--- a/src/components/views/dialogs/DMInviteDialog.js
+++ b/src/components/views/dialogs/DMInviteDialog.js
@@ -24,17 +24,45 @@ import DMRoomMap from "../../../utils/DMRoomMap";
 import {RoomMember} from "matrix-js-sdk/lib/matrix";
 import * as humanize from "humanize";
 import SdkConfig from "../../../SdkConfig";
+import {getHttpUriForMxc} from "matrix-js-sdk/lib/content-repo";
 
 // TODO: [TravisR] Make this generic for all kinds of invites
 
 const INITIAL_ROOMS_SHOWN = 3; // Number of rooms to show at first
 const INCREMENT_ROOMS_SHOWN = 5; // Number of rooms to add when 'show more' is clicked
 
+class DirectoryMember {
+    _userId: string;
+    _displayName: string;
+    _avatarUrl: string;
+
+    constructor(userDirResult: {user_id: string, display_name: string, avatar_url: string}) {
+        this._userId = userDirResult.user_id;
+        this._displayName = userDirResult.display_name;
+        this._avatarUrl = userDirResult.avatar_url;
+    }
+
+    // These next members are to implement the contract expected by DMRoomTile
+    get name(): string {
+        return this._displayName || this._userId;
+    }
+
+    get userId(): string {
+        return this._userId;
+    }
+
+    getMxcAvatarUrl(): string {
+        return this._avatarUrl;
+    }
+}
+
 class DMRoomTile extends React.PureComponent {
     static propTypes = {
+        // Has properties to match RoomMember: userId (str), name (str), getMxcAvatarUrl(): string
         member: PropTypes.object.isRequired,
         lastActiveTs: PropTypes.number,
         onToggle: PropTypes.func.isRequired,
+        highlightWord: PropTypes.string,
     };
 
     _onClick = (e) => {
@@ -45,8 +73,44 @@ class DMRoomTile extends React.PureComponent {
         this.props.onToggle(this.props.member.userId);
     };
 
+    _highlightName(str: string) {
+        if (!this.props.highlightWord) return str;
+
+        // We convert things to lowercase for index searching, but pull substrings from
+        // the submitted text to preserve case. Note: we don't need to htmlEntities the
+        // string because React will safely encode the text for us.
+        const lowerStr = str.toLowerCase();
+        const filterStr = this.props.highlightWord.toLowerCase();
+
+        const result = [];
+
+        let i = 0;
+        let ii;
+        while ((ii = lowerStr.indexOf(filterStr, i)) >= 0) {
+            // Push any text we missed (first bit/middle of text)
+            if (ii > i) {
+                // Push any text we aren't highlighting (middle of text match, or beginning of text)
+                result.push(<span key={i + 'begin'}>{str.substring(i, ii)}</span>);
+            }
+
+            i = ii; // copy over ii only if we have a match (to preserve i for end-of-text matching)
+
+            // Highlight the word the user entered
+            const substr = str.substring(i, filterStr.length + i);
+            result.push(<span className='mx_DMInviteDialog_roomTile_highlight' key={i + 'bold'}>{substr}</span>);
+            i += substr.length;
+        }
+
+        // Push any text we missed (end of text)
+        if (i < (str.length - 1)) {
+            result.push(<span key={i + 'end'}>{str.substring(i)}</span>);
+        }
+
+        return result;
+    }
+
     render() {
-        const MemberAvatar = sdk.getComponent("views.avatars.MemberAvatar");
+        const BaseAvatar = sdk.getComponent("views.avatars.BaseAvatar");
 
         let timestamp = null;
         if (this.props.lastActiveTs) {
@@ -56,11 +120,22 @@ class DMRoomTile extends React.PureComponent {
             timestamp = <span className='mx_DMInviteDialog_roomTile_time'>{humanTs}</span>;
         }
 
+        const avatarSize = 36;
+        const avatarUrl = getHttpUriForMxc(
+            MatrixClientPeg.get().getHomeserverUrl(), this.props.member.getMxcAvatarUrl(),
+            avatarSize, avatarSize, "crop");
+
         return (
             <div className='mx_DMInviteDialog_roomTile' onClick={this._onClick}>
-                <MemberAvatar member={this.props.member} width={36} height={36} />
-                <span className='mx_DMInviteDialog_roomTile_name'>{this.props.member.name}</span>
-                <span className='mx_DMInviteDialog_roomTile_userId'>{this.props.member.userId}</span>
+                <BaseAvatar
+                    url={avatarUrl}
+                    name={this.props.member.name}
+                    idName={this.props.member.userId}
+                    width={avatarSize}
+                    height={avatarSize}
+                />
+                <span className='mx_DMInviteDialog_roomTile_name'>{this._highlightName(this.props.member.name)}</span>
+                <span className='mx_DMInviteDialog_roomTile_userId'>{this._highlightName(this.props.member.userId)}</span>
                 {timestamp}
             </div>
         );
@@ -73,6 +148,8 @@ export default class DMInviteDialog extends React.PureComponent {
         onFinished: PropTypes.func.isRequired,
     };
 
+    _debounceTimer: number = null;
+
     constructor() {
         super();
 
@@ -83,6 +160,7 @@ export default class DMInviteDialog extends React.PureComponent {
             numRecentsShown: INITIAL_ROOMS_SHOWN,
             suggestions: this._buildSuggestions(),
             numSuggestionsShown: INITIAL_ROOMS_SHOWN,
+            serverResultsMixin: [], // { user: DirectoryMember, userId: string }[], like recents and suggestions
         };
     }
 
@@ -163,7 +241,7 @@ export default class DMInviteDialog extends React.PureComponent {
             }
             return b.score - a.score;
         });
-        return members.map(m => ({userId: m.userId, user: m.member}));
+        return members.map(m => ({userId: m.member.userId, user: m.member}));
     }
 
     _startDm = () => {
@@ -175,7 +253,35 @@ export default class DMInviteDialog extends React.PureComponent {
     };
 
     _updateFilter = (e) => {
-        this.setState({filterText: e.target.value});
+        const term = e.target.value;
+        this.setState({filterText: term});
+
+        // Debounce server lookups to reduce spam. We don't clear the existing server
+        // results because they might still be vaguely accurate, likewise for races which
+        // could happen here.
+        if (this._debounceTimer) {
+            clearTimeout(this._debounceTimer);
+        }
+        this._debounceTimer = setTimeout(() => {
+            MatrixClientPeg.get().searchUserDirectory({term}).then(r => {
+                if (term !== this.state.filterText) {
+                    // Discard the results - we were probably too slow on the server-side to make
+                    // these results useful. This is a race we want to avoid because we could overwrite
+                    // more accurate results.
+                    return;
+                }
+                this.setState({
+                    serverResultsMixin: r.results.map(u => ({
+                        userId: u.user_id,
+                        user: new DirectoryMember(u),
+                    })),
+                });
+            }).catch(e => {
+                console.error("Error searching user directory:");
+                console.error(e);
+                this.setState({serverResultsMixin: []}); // clear results because it's moderately fatal
+            });
+        }, 150); // 150ms debounce (human reaction time + some)
     };
 
     _showMoreRecents = () => {
@@ -195,14 +301,40 @@ export default class DMInviteDialog extends React.PureComponent {
     };
 
     _renderSection(kind: "recents"|"suggestions") {
-        const sourceMembers = kind === 'recents' ? this.state.recents : this.state.suggestions;
+        let sourceMembers = kind === 'recents' ? this.state.recents : this.state.suggestions;
         let showNum = kind === 'recents' ? this.state.numRecentsShown : this.state.numSuggestionsShown;
         const showMoreFn = kind === 'recents' ? this._showMoreRecents.bind(this) : this._showMoreSuggestions.bind(this);
         const lastActive = (m) => kind === 'recents' ? m.lastActive : null;
         const sectionName = kind === 'recents' ? _t("Recent Conversations") : _t("Suggestions");
 
+        // Mix in the server results if we have any, but only if we're searching
+        if (this.state.filterText && this.state.serverResultsMixin && kind === 'suggestions') {
+            // only pick out the server results that aren't already covered though
+            const uniqueServerResults = this.state.serverResultsMixin
+                .filter(u => !sourceMembers.some(m => m.userId === u.userId));
+
+            sourceMembers = sourceMembers.concat(uniqueServerResults);
+        }
+
+        // Hide the section if there's nothing to filter by
         if (!sourceMembers || sourceMembers.length === 0) return null;
 
+        // Do some simple filtering on the input before going much further. If we get no results, say so.
+        if (this.state.filterText) {
+            const filterBy = this.state.filterText.toLowerCase();
+            sourceMembers = sourceMembers
+                .filter(m => m.user.name.toLowerCase().includes(filterBy) || m.userId.toLowerCase().includes(filterBy));
+
+            if (sourceMembers.length === 0) {
+                return (
+                    <div className='mx_DMInviteDialog_section'>
+                        <h3>{sectionName}</h3>
+                        <p>{_t("No results")}</p>
+                    </div>
+                );
+            }
+        }
+
         // If we're going to hide one member behind 'show more', just use up the space of the button
         // with the member's tile instead.
         if (showNum === sourceMembers.length - 1) showNum++;
@@ -222,7 +354,13 @@ export default class DMInviteDialog extends React.PureComponent {
         }
 
         const tiles = toRender.map(r => (
-            <DMRoomTile member={r.user} lastActiveTs={lastActive(r)} key={r.userId} onToggle={this._toggleMember} />
+            <DMRoomTile
+                member={r.user}
+                lastActiveTs={lastActive(r)}
+                key={r.userId}
+                onToggle={this._toggleMember}
+                highlightWord={this.state.filterText}
+            />
         ));
         return (
             <div className='mx_DMInviteDialog_section'>
@@ -246,7 +384,6 @@ export default class DMInviteDialog extends React.PureComponent {
                     id="inviteTargets"
                     value={this.state.filterText}
                     onChange={this._updateFilter}
-                    placeholder="TODO: Implement filtering/searching (vector-im/riot-web#11199)"
                 />
             </div>
         );