diff --git a/lib/ace/incremental_search.js b/lib/ace/incremental_search.js
index 173c963d..3870c678 100644
--- a/lib/ace/incremental_search.js
+++ b/lib/ace/incremental_search.js
@@ -76,24 +76,36 @@ oop.inherits(IncrementalSearch, Search);
         delete this.$editor;
     }
 
-    iSearch.highlightAndFindWithNeedle = function(dir, moveToMatch, needleUpdateFunc) {
+    iSearch.cancelSearch = function() {
+        var session = this.$editor.session,
+            sel = this.$editor.selection;
+        this.$options.needle = '';
+        session.highlight(null);
+        sel.setRange(this.$startRange);
+        return this.$currentRange = this.$startRange;
+    }
+
+    iSearch.highlightAndFindWithNeedle = function(dir, moveToNext, needleUpdateFunc) {
         if (!this.$editor) return null;
         dir = dir || 'forward';
         var session = this.$editor.session,
             options = this.$options;
         if (needleUpdateFunc) options.needle = needleUpdateFunc(options.needle || '') || '';
+        if (options.needle.length === 0) {
+            return this.cancelSearch();
+        }
         if (dir === "forward") {
-            options.start = this.$currentRange.end;
+            options.start = moveToNext ? this.$currentRange.end : this.$currentRange.start;
             options.backwards = false;
         } else {
-            options.start = this.$currentRange.start;
+            options.start = moveToNext ? this.$currentRange.start : this.$currentRange.end;
             options.backwards = true;
         }
         var range = this.find(session);
-        if (range && moveToMatch) {
-            this.$editor.selection.setRange(range);
-            this.$currentRange = range;
-        }
+        if (!range) range = this.$currentRange;
+
+        this.$editor.selection.setRange(range);
+        this.$currentRange = range;
 
         session.highlight(options.re);
         return range;
diff --git a/lib/ace/incremental_search_test.js b/lib/ace/incremental_search_test.js
index 40b09eb0..ea40630b 100644
--- a/lib/ace/incremental_search_test.js
+++ b/lib/ace/incremental_search_test.js
@@ -90,6 +90,7 @@ module.exports = {
         highlightRanges = callHighlighterUpdate(editor.session);
         testRanges("Range: [0/3] -> [0/5]", [range], "range");
         testRanges("Range: [0/3] -> [0/5],Range: [1/3] -> [1/5]", highlightRanges, "highlight");
+
         range = iSearch.addChar('3'); // "123"
         highlightRanges = callHighlighterUpdate(editor.session);
         testRanges("Range: [0/3] -> [0/6]", [range], "range");
@@ -99,12 +100,36 @@ module.exports = {
         highlightRanges = callHighlighterUpdate(editor.session);
         testRanges("Range: [0/3] -> [0/5]", [range], "range");
         testRanges("Range: [0/3] -> [0/5],Range: [1/3] -> [1/5]", highlightRanges, "highlight");
+    },
 
-        range = iSearch.forward(); // "12", cursor forward
-        highlightRanges = callHighlighterUpdate(editor.session);
+    "test: forward / backward" : function() {
+        iSearch.activate(editor);
+        iSearch.addChar('1'); iSearch.addChar('2');
+        var range = iSearch.forward();
         testRanges("Range: [1/3] -> [1/5]", [range], "range");
-        testRanges("Range: [0/3] -> [0/5],Range: [1/3] -> [1/5]", highlightRanges, "highlight");
 
+        range = iSearch.forward();
+        testRanges("Range: [1/3] -> [1/5]", [range], "range");
+
+        range = iSearch.backward();
+        testRanges("Range: [0/3] -> [0/5]", [range], "range");
+    },
+
+    "test: cancelSearch" : function() {
+        iSearch.activate(editor);
+        iSearch.addChar('1'); iSearch.addChar('2');
+        var range = iSearch.cancelSearch();
+        testRanges("Range: [0/0] -> [0/0]", [range], "range");
+
+        iSearch.addChar('1'); range = iSearch.addChar('2');
+        testRanges("Range: [0/3] -> [0/5]", [range], "range");
+    },
+
+    "test: failing search keeps range" : function() {
+        iSearch.activate(editor);
+        iSearch.addChar('1'); iSearch.addChar('2');
+        var range = iSearch.addChar('x');
+        testRanges("Range: [0/3] -> [0/5]", [range], "range");
     }
 
     // // "test: find simple text in document" : function() {