diff --git a/Lib/pdb.py b/Lib/pdb.py
index 0751c17..1cd6706 100755
--- a/Lib/pdb.py
+++ b/Lib/pdb.py
@@ -13,6 +13,7 @@
 import re
 import pprint
 import traceback
+import signal
 
 
 class Restart(Exception):
@@ -72,6 +73,8 @@
             import readline
         except ImportError:
             pass
+        self.allow_kbdint = False
+        signal.signal(signal.SIGINT, self.sigint_handler)
 
         # Read $HOME/.pdbrc and ./.pdbrc
         self.rcLines = []
@@ -104,6 +107,13 @@
         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()
+        print >>self.stdout, "\nProgram interrupted. (Use 'cont' to resume)."
+        self.set_step()
+        self.set_trace(frame)
+
     def reset(self):
         bdb.Bdb.reset(self)
         self.forget()
@@ -176,7 +186,7 @@
             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
@@ -199,11 +209,22 @@
         self.interaction(frame, exc_traceback)
 
     # General interaction function
+    def _cmdloop(self):
+        while 1:
+            try:
+                # keyboard interrupts allow for an easy way to interrupt
+                # the current command
+                self.allow_kbdint = True
+                self.cmdloop()
+                self.allow_kbdint = False
+                break
+            except KeyboardInterrupt:
+                print >>self.stdout, '--KeyboardInterrupt--'
 
     def interaction(self, frame, traceback):
         self.setup(frame, traceback)
         self.print_stack_entry(self.stack[self.curindex])
-        self.cmdloop()
+        self._cmdloop()
         self.forget()
 
     def displayhook(self, obj):
@@ -329,9 +350,22 @@
         prompt_back = self.prompt
         self.prompt = '(com) '
         self.commands_defining = True
-        self.cmdloop()
-        self.commands_defining = False
-        self.prompt = prompt_back
+        try:
+            self.cmdloop()
+        except (KeyboardInterrupt, IOError):
+            # It appears that that when pdb is reading input from a pipe
+            # we may get IOErrors, rather than KeyboardInterrupt.
+            # Now discard all the commands entered so far (essentially undo
+            # any effect of this "commands"  cmd)
+            self.commands.pop(bnum)
+            self.commands_doprompt.pop(bnum)
+            self.commands_silent.pop(bnum)
+            # this will get caught by the _cmdloop and pdb will reenter
+            # the main command loop
+            raise KeyboardInterrupt()
+        finally:
+            self.commands_defining = False
+            self.prompt = prompt_back
 
     def do_break(self, arg, temporary = 0):
         # break [ ([filename:]lineno | function) [, "condition"] ]
diff --git a/Lib/test/test_pdb2.py b/Lib/test/test_pdb2.py
new file mode 100644
index 0000000..71f6e3f
--- /dev/null
+++ b/Lib/test/test_pdb2.py
@@ -0,0 +1,197 @@
+#!/usr/bin/env python
+# pdb tests in the Lib/test style
+import os
+import sys
+import time
+import re
+import subprocess
+import signal
+from test.test_support import   TESTFN
+import test.test_support
+import unittest
+
+# allow alt pdb locations, if environment variable is specified then
+# the test files will be stored in t/ directory and will not be deleted
+# after pdb run
+DEBUG_PDB = os.environ.get("_DEBUG_PDB", None)
+TMP_DIR = "./t" # dir for tmp files if DEBUG_PDB is set
+
+if DEBUG_PDB:
+    if not os.path.exists(TMP_DIR):
+        os.mkdir(TMP_DIR)
+
+def _write_test_file(testname, text):
+    filename = TESTFN
+    if DEBUG_PDB:
+        filename = os.path.join(TMP_DIR, testname)
+    with open(filename, "wt") as f:
+        f.write(text+"\n")
+    return filename
+
+
+class PdbProcess(object):
+    def __init__(self, testname, testprg):
+        self.testname = testname
+        self.filename = _write_test_file(testname, testprg)
+        # unbuffer pdb.py output (if it gets any ideas to buffer it)
+        # make sure that we use the same interpreter to run tests wrapper and
+        # pdb itself
+        cmd = [sys.executable, '-u']
+        if DEBUG_PDB:
+            cmd.append(DEBUG_PDB)
+        else:
+            cmd.extend(['-m', 'pdb'])
+        cmd.append(self.filename)
+        self.pdbhandle = subprocess.Popen(cmd, bufsize=0,
+                                          stdin=subprocess.PIPE,
+                                          stdout=subprocess.PIPE,
+                                          stderr=subprocess.STDOUT)
+        self.startup_msg = self.wait_for_prompt()
+        self.finished=0
+
+
+    def wait_for_normal_exit(self, timeout=2):
+        """wait for pdb subprocess to exit, timeout is in seconds"""
+        step = 0.1
+        for i in range(int(timeout/step)):
+            status=self.pdbhandle.poll()
+            if status is not None:
+                break
+            time.sleep(step)
+        if status is -1:
+            describe = "pdb has not exited"
+        elif status> 0:
+            describe = "pdb exited abnormally with status=%d" % status
+        assert status == 0, describe
+
+    def wait_for_line(self, stopline, alt_stopline=None):
+        output=''
+        line=''
+        while 1 :
+            ch=self.pdbhandle.stdout.read(1)
+            # sys.stdout.write(ch)
+            line += ch
+            if line == stopline or line == alt_stopline:
+                return output
+            if ch == '\n':
+                output += line
+                line=''
+            if ch == '':#eof
+                output += line
+                return output
+
+    # note: this can block if issued at the wrong time
+    def wait_for_prompt(self):
+        """collect any output from pdb session til the prompt is encountered.
+        Return this output (exlcuding prompt)"""
+        return self.wait_for_line("(Pdb) ", "(com) ")
+
+    def send_cmd(self, cmd):
+        """send a command but do not wait for response"""
+        #print "sending:", cmd
+        self.pdbhandle.stdin.write(cmd+"\n")
+
+
+    def cmd(self, cmd, response_text=""):
+        """send a single command to pdb, collect pdb response (by waiting
+        for the next prompt). Verify that response contains specified
+        response_text"""
+
+        self.pdbhandle.stdin.write(cmd+"\n")
+        response =  self.wait_for_prompt()
+        if not response_text:
+            return response
+
+        if DEBUG_PDB:
+            print "%s: testing response for '%s':" % (self.testname,cmd),
+        assert   response.find(response_text) >= 0, (
+            "response:\n%s\n does not contain expected substring '%s'" %
+            (response, response_text))
+        if DEBUG_PDB:
+            print "Ok"
+        return response
+
+    def send_kbdint(self):
+        # os.kill is Posix-specific.  We could have used a X-platform
+        # send_signal method of Popen objects, but it still cann't send
+        # SIGINT on win32 and it's not present on python2.5
+        # self.pdbhandle.send_signal(signal.SIGINT)
+        os.kill(self.pdbhandle.pid, signal.SIGINT)
+
+    def __del__(self):
+        # if pdb is still running, kill it, leaving it running does not serve
+        # any useful purpose
+        if self.pdbhandle.poll() is None:
+            self.pdbhandle.send_signal(signal.SIGTERM)
+        if not DEBUG_PDB:
+            os.unlink(self.filename)
+        return self.pdbhandle.wait()
+
+
+class PdbTest(unittest.TestCase):
+
+    def test_00startup(self):
+        pdb = PdbProcess("pdb_t_startup", "print 'Hello, world'")
+        pdb.cmd("r", "Hello, world")
+        pdb.cmd("q")
+        pdb.wait_for_normal_exit()
+
+    @unittest.skipIf(sys.platform.startswith("win"),
+                     "test_sigint requires a posix system.")
+    def test_sigint(self):
+        pdb = PdbProcess("pdb_t_loop", """\
+for i in xrange(100000000):
+     print 'i=%d' %i
+"""     )
+        # first, test Ctrl-C/kbdint handling while the program is running
+        # kbdint should interrupt the program and return to pdb prompt,
+        # the program must be resumable
+        pdb.send_cmd("c")
+        # we could use time.sleep() delays but they are not reliable so you
+        # end up with making them much longer than necessary (and still failing
+        # from time to time)
+        pdb.wait_for_line("i=19")
+        pdb.send_kbdint()
+        pdb.wait_for_prompt()
+        response = pdb.cmd('p "i=%d" % i')
+        m = re.search('i=(\d+)', response)
+        assert m, "unexpected response %s" % response
+        i0 = int(m.group(1))
+        pdb.send_cmd("c")
+        pdb.wait_for_line("i=%d" % (i0+99))
+        pdb.send_kbdint()
+        pdb.wait_for_prompt()
+        response = pdb.cmd('p "i=%d" % i')
+        m = re.search('i=(\d+)', response)
+        assert m, "unexpected response %s" % response
+        i1 = int(m.group(1))
+        assert i1 > i0
+        # now test kbd interrupts in interactive mode, they should interrupt
+        # the current cmd
+        # simple case: just generate kdbint
+        pdb.send_kbdint()
+        pdb.wait_for_prompt()
+        pdb.cmd("p 'hello'", "hello") # check that we are at prompt
+        # more complicated case: Ctrl-C while defining bp commands
+        # interrupted commands should have no effect
+        pdb.cmd("b 2")
+        pdb.cmd("commands 1")
+        pdb.cmd("p 'marker'")
+        pdb.send_kbdint()
+        pdb.wait_for_prompt()
+        pdb.cmd("p 'hello'", "hello")  # check that we are back at normal prompt
+        pdb.send_cmd("c")
+        response = pdb.wait_for_prompt()
+        assert not re.search("marker", response, re.I), (
+            "unexpected response '%s'" % response)
+        pdb.cmd("p 'hello'", "hello") #check that we are back  at prompt
+        pdb.send_cmd("q")
+        pdb.wait_for_normal_exit()
+
+
+def test_main():
+    test.test_support.run_unittest(PdbTest)
+
+
+if __name__ == "__main__":
+    test_main()
diff --git a/Misc/NEWS b/Misc/NEWS
index ac28fad..6703c35 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -15,6 +15,8 @@
 Library
 -------
 
+- [issue7245] Better Ctrl-C support in pdb.
+
 
 What's New in Python 2.7 beta 2?
 ================================