diff --git a/Lib/bdb.py b/Lib/bdb.py
index 9f5e7ae..08dce8f 100644
--- a/Lib/bdb.py
+++ b/Lib/bdb.py
@@ -214,7 +214,7 @@
     def set_continue(self):
         # Don't stop except at breakpoints or when finished
         self._set_stopinfo(self.botframe, None, -1)
-        if not self.breaks:
+        if not self.breaks and not self.watching:
             # no breakpoints; run without debugger overhead
             sys.settrace(None)
             frame = sys._getframe().f_back
diff --git a/Lib/pdb.py b/Lib/pdb.py
index d6a9a92..ac53eba 100755
--- a/Lib/pdb.py
+++ b/Lib/pdb.py
@@ -66,14 +66,15 @@
 # NOTE: the actual command documentation is collected from docstrings of the
 # commands and is appended to __doc__ after the class has been defined.
 
+import os
+import re
 import sys
 import cmd
 import bdb
 import dis
-import os
-import re
 import code
 import pprint
+import signal
 import inspect
 import traceback
 import linecache
@@ -133,7 +134,8 @@
 
 class Pdb(bdb.Bdb, cmd.Cmd):
 
-    def __init__(self, completekey='tab', stdin=None, stdout=None, skip=None):
+    def __init__(self, completekey='tab', stdin=None, stdout=None, skip=None,
+                 nosigint=False):
         bdb.Bdb.__init__(self, skip=skip)
         cmd.Cmd.__init__(self, completekey, stdin, stdout)
         if stdout:
@@ -148,6 +150,8 @@
             import readline
         except ImportError:
             pass
+        self.allow_kbdint = False
+        self.nosigint = nosigint
 
         # Read $HOME/.pdbrc and ./.pdbrc
         self.rcLines = []
@@ -174,6 +178,15 @@
         self.commands_bnum = None # The breakpoint number for which we are
                                   # defining a list
 
+    def sigint_handler(self, signum, frame):
+        if self.allow_kbdint:
+            raise KeyboardInterrupt
+        self.message("\nProgram interrupted. (Use 'cont' to resume).")
+        self.set_step()
+        self.set_trace(frame)
+        # restore previous signal handler
+        signal.signal(signal.SIGINT, self._previous_sigint_handler)
+
     def reset(self):
         bdb.Bdb.reset(self)
         self.forget()
@@ -261,7 +274,7 @@
             if not self.commands_silent[currentbp]:
                 self.print_stack_entry(self.stack[self.curindex])
             if self.commands_doprompt[currentbp]:
-                self.cmdloop()
+                self._cmdloop()
             self.forget()
             return
         return 1
@@ -286,6 +299,17 @@
         self.interaction(frame, exc_traceback)
 
     # General interaction function
+    def _cmdloop(self):
+        while True:
+            try:
+                # keyboard interrupts allow for an easy way to cancel
+                # the current command, so allow them during interactive input
+                self.allow_kbdint = True
+                self.cmdloop()
+                self.allow_kbdint = False
+                break
+            except KeyboardInterrupt:
+                self.message('--KeyboardInterrupt--')
 
     def interaction(self, frame, traceback):
         if self.setup(frame, traceback):
@@ -294,7 +318,7 @@
             self.forget()
             return
         self.print_stack_entry(self.stack[self.curindex])
-        self.cmdloop()
+        self._cmdloop()
         self.forget()
 
     def displayhook(self, obj):
@@ -909,6 +933,9 @@
         """c(ont(inue))
         Continue execution, only stop when a breakpoint is encountered.
         """
+        if not self.nosigint:
+            self._previous_sigint_handler = \
+                signal.signal(signal.SIGINT, self.sigint_handler)
         self.set_continue()
         return 1
     do_c = do_cont = do_continue