diff --git a/demo/demo.js b/demo/demo.js
index 0437c78c..5b4b883f 100644
--- a/demo/demo.js
+++ b/demo/demo.js
@@ -257,6 +257,10 @@ exports.launch = function(env) {
         env.editor.renderer.setShowPrintMargin(checked);
     });
 
+    bindCheckbox("highlight_selected_word", function(checked) {
+        env.editor.setHighlightSelectedWord(checked);
+    });
+
     function bindCheckbox(id, callback) {
         var el = document.getElementById(id);
         var onCheck = function() {
diff --git a/index.html b/index.html
index d4557f3b..9fa06ea9 100644
--- a/index.html
+++ b/index.html
@@ -108,6 +108,10 @@
         <label for="show_print_margin">Show Print Margin</label>
         <input type="checkbox" id="show_print_margin" checked>
       </td>
+      <td align="right">
+        <label for="highlight_selected_word">Highlight selected word</label>
+        <input type="checkbox" id="highlight_selected_word" checked>
+      </td>
       </tr>
     </table>
 
diff --git a/lib/ace/css/editor.css b/lib/ace/css/editor.css
index c2f3abff..82401624 100644
--- a/lib/ace/css/editor.css
+++ b/lib/ace/css/editor.css
@@ -143,3 +143,8 @@
     position: absolute;
     z-index: 2;
 }
+
+.ace_marker-layer .ace_selected_word {
+    position: absolute;
+    z-index: 6;
+}
diff --git a/lib/ace/editor.js b/lib/ace/editor.js
index 60a14c1b..b101c173 100644
--- a/lib/ace/editor.js
+++ b/lib/ace/editor.js
@@ -334,6 +334,9 @@ var Editor =function(renderer, session) {
         }
 
         this.onCursorChange(e);
+
+        if (this.$highlightSelectedWord)
+            this.mode.highlightSelection(this);
     };
 
     this.onChangeFrontMarker = function() {
@@ -528,6 +531,22 @@ var Editor =function(renderer, session) {
         return this.$highlightActiveLine;
     };
 
+    this.$highlightSelectedWord = true;
+    this.setHighlightSelectedWord = function(shouldHighlight) {
+        if (this.$highlightSelectedWord == shouldHighlight)
+            return;
+
+        this.$highlightSelectedWord = shouldHighlight;
+        if (shouldHighlight)
+            this.mode.highlightSelection(this);
+        else
+            this.mode.clearSelectionHighlight(this);
+    };
+
+    this.getHighlightSelectedWord = function() {
+        return this.$highlightSelectedWord;
+    };
+
     this.setShowInvisibles = function(showInvisibles) {
         if (this.getShowInvisibles() == showInvisibles)
             return;
diff --git a/lib/ace/mode/text.js b/lib/ace/mode/text.js
index fe1c9f17..6fc68588 100644
--- a/lib/ace/mode/text.js
+++ b/lib/ace/mode/text.js
@@ -1,4 +1,5 @@
-/* ***** BEGIN LICENSE BLOCK *****
+/* vim:ts=4:sts=4:sw=4:
+ * ***** BEGIN LICENSE BLOCK *****
  * Version: MPL 1.1/GPL 2.0/LGPL 2.1
  *
  * The contents of this file are subject to the Mozilla Public License Version
@@ -20,6 +21,7 @@
  *
  * Contributor(s):
  *      Fabian Jakobs <fabian AT ajax DOT org>
+ *      Mihai Sucan <mihai DOT sucan AT gmail DOT com>
  *
  * Alternatively, the contents of this file may be used under the terms of
  * either the GNU General Public License Version 2 or later (the "GPL"), or
@@ -77,6 +79,65 @@ var Mode = function() {
         return null;
     };
 
+    this.highlightSelection = function(editor) {
+        var session = editor.session;
+        if (!session.$selectionOccurrences)
+            session.$selectionOccurrences = [];
+
+        if (session.$selectionOccurrences.length)
+            this.clearSelectionHighlight(editor);
+
+        var selection = editor.getSelectionRange();
+        if (selection.isEmpty() || selection.isMultiLine())
+            return;
+
+        var startOuter = selection.start.column - 1;
+        var endOuter = selection.end.column + 1;
+        var line = session.getLine(selection.start.row);
+        var lineCols = line.length - 1;
+        var needle = line.substring(Math.max(startOuter, 0),
+                                    Math.min(endOuter, lineCols));
+
+        // Make sure the outer characters are not part of the word.
+        if ((startOuter >= 0 && !/[^\w\d]/.test(needle.charAt(0))) ||
+            (endOuter <= lineCols && !/[^\w\d]/.test(needle.charAt(needle.length - 1))))
+            return;
+
+        needle = line.substring(selection.start.column, selection.end.column);
+        if (!/^[\w\d]+$/.test(needle))
+            return;
+
+        var newOptions = {
+            wrap: true,
+            wholeWord: true,
+            needle: needle
+        };
+
+        var currentOptions = editor.$search.getOptions();
+        editor.$search.set(newOptions);
+
+        var ranges = editor.$search.findAll(session);
+        session.$selectionOccurrences = [];
+        ranges.forEach(function(range) {
+            if (!range.contains(selection.start.row, selection.start.column)) {
+                var marker = editor.renderer.addMarker(range,
+                                                       "ace_selected_word");
+                session.$selectionOccurrences.push(marker);
+            }
+        });
+
+        editor.$search.set(currentOptions);
+    };
+
+    this.clearSelectionHighlight = function(editor) {
+        if (!editor.session.$selectionOccurrences)
+            return;
+
+        editor.session.$selectionOccurrences.forEach(function(marker) {
+            editor.renderer.removeMarker(marker);
+        });
+    };
+
 }).call(Mode.prototype);
 
 exports.Mode = Mode;
diff --git a/lib/ace/mouse_handler.js b/lib/ace/mouse_handler.js
index 5e836383..b3a16833 100644
--- a/lib/ace/mouse_handler.js
+++ b/lib/ace/mouse_handler.js
@@ -165,4 +165,4 @@ var MouseHandler = function(editor) {
 }).call(MouseHandler.prototype);
 
 exports.MouseHandler = MouseHandler;
-});
\ No newline at end of file
+});
diff --git a/lib/ace/theme/tm.css b/lib/ace/theme/tm.css
index 0993335c..987901d1 100644
--- a/lib/ace/theme/tm.css
+++ b/lib/ace/theme/tm.css
@@ -131,6 +131,11 @@
   background: rgb(232, 242, 254);
 }
 
+.ace-tm .ace_marker-layer .ace_selected_word {
+  background: rgb(250, 250, 255);
+  border: 1px solid rgb(200, 200, 250);
+}
+
 .ace-tm .ace_string.ace_regex {
   color: rgb(255, 0, 0)   
-}
\ No newline at end of file
+}