diff --git a/lib/ace/placeholder.js b/lib/ace/placeholder.js
index df6a5f98..f89eedac 100644
--- a/lib/ace/placeholder.js
+++ b/lib/ace/placeholder.js
@@ -58,6 +58,8 @@ var PlaceHolder = function(session, length, pos, others, mainClass, othersClass)
     };
     
     this.$pos = pos;
+    // Used for reset
+    this.$undoStackDepth = session.getUndoManager().$undoStack ? session.getUndoManager().$undoStack.length : -1;
     this.setup();
 
     session.selection.on("changeCursor", this.$onCursorChange);
@@ -188,6 +190,16 @@ var PlaceHolder = function(session, length, pos, others, mainClass, othersClass)
             this.others[i].detach();
         }
     };
+    
+    this.cancel = function() {
+        if(this.$undoStackDepth === -1)
+            throw Error("Canceling placeholders only supported with undo manager attached to session.");
+        var undoManager = this.session.getUndoManager();
+        var undosRequired = undoManager.$undoStack.length - this.$undoStackDepth;
+        for (var i = 0; i < undosRequired; i++) {
+            undoManager.undo(true);
+        }
+    };
 }).call(PlaceHolder.prototype);
 
 
diff --git a/lib/ace/placeholder_test.js b/lib/ace/placeholder_test.js
index 6130aa3f..c8611e9b 100644
--- a/lib/ace/placeholder_test.js
+++ b/lib/ace/placeholder_test.js
@@ -49,6 +49,7 @@ var MockRenderer = require("./test/mockrenderer").MockRenderer;
 var assert = require("./test/assertions");
 var JavaScriptMode = require("./mode/javascript").Mode;
 var PlaceHolder = require('./placeholder').PlaceHolder;
+var UndoManager = require('./undomanager').UndoManager;
 
 module.exports = {
 
@@ -133,6 +134,25 @@ module.exports = {
         editor.moveCursorTo(1, 0);
         p.onCursorChange(); // Have to do this by hand because moveCursorTo doesn't trigger the event
         assert.ok(left);
+    },
+    
+    "test: cancel": function(next) {
+        var session = new EditSession("var a = 10;\nconsole.log(a, a);", new JavaScriptMode());
+        session.setUndoManager(new UndoManager());
+        var editor = new Editor(new MockRenderer(), session);
+        var p = new PlaceHolder(session, 1, {row: 0, column: 4}, [{row: 1, column: 12}, {row: 1, column: 15}]);
+        
+        editor.moveCursorTo(0, 5);
+        editor.insert('b');
+        editor.insert('cd');
+        editor.remove('left');
+        assert.equal(session.doc.getValue(), "var abc = 10;\nconsole.log(abc, abc);");
+        // Wait a little for the changes to enter the undo stack
+        setTimeout(function() {
+            p.cancel();
+            assert.equal(session.doc.getValue(), "var a = 10;\nconsole.log(a, a);");
+            next();
+        }, 80);
     }
 };