diff --git a/src/search/FindReplace.js b/src/search/FindReplace.js
index 93daa4c5f77..f62bbbc83af 100644
--- a/src/search/FindReplace.js
+++ b/src/search/FindReplace.js
@@ -26,13 +26,12 @@
 
 /*
  * Adds Find and Replace commands
+ *
+ * Originally based on the code in CodeMirror2/lib/util/search.js.
  * 
  * Define search commands. Depends on dialog.js or another
  * implementation of the openDialog method.
  *
- * This code was copied from CodeMirror2/lib/util/search.js so that the UI strings 
- * could be localized.
- *
  * Replace works a little oddly -- it will do the replace on the next findNext press.
  * You prevent a replace by making sure the match is no longer selected when hitting
  * findNext.
@@ -80,6 +79,10 @@ define(function (require, exports, module) {
             fs[0]();
         }
     }
+    
+    function getDialogTextField() {
+        return $(".CodeMirror-dialog input[type='text']");
+    }
 
     function parseQuery(query) {
         var isRE = query.match(/^\/(.*)\/([a-z]*)$/);
@@ -102,45 +105,69 @@ define(function (require, exports, module) {
         });
     }
 
+    function clearSearch(cm) {
+        cm.operation(function () {
+            var state = getSearchState(cm),
+                i;
+            if (!state.query) {
+                return;
+            }
+            state.query = null;
+            
+            // Clear highlights
+            for (i = 0; i < state.marked.length; ++i) {
+                state.marked[i].clear();
+            }
+            state.marked.length = 0;
+        });
+    }
+    
     var queryDialog = Strings.CMD_FIND +
             ': <input type="text" style="width: 10em"/> <span style="color: #888">(' +
             Strings.SEARCH_REGEXP_INFO  + ')</span>';
 
+    /**
+     * If no search pending, opens the search dialog. If search is already open, moves to
+     * next/prev result (depending on 'rev')
+     */
     function doSearch(cm, rev) {
         var state = getSearchState(cm);
         if (state.query) {
             return findNext(cm, rev);
         }
-        dialog(cm, queryDialog, Strings.CMD_FIND, function (query) {
+        
+        var searchStartPos = cm.getCursor();
+        
+        // Called each time the search query changes while being typed. Jumps to the first matching
+        // result, starting from the original cursor position
+        function findFirst(query) {
             cm.operation(function () {
-                if (!query || state.query) {
+                if (!query) {
                     return;
                 }
+                
+                if (state.query) {
+                    clearSearch(cm);  // clear highlights from previous query
+                }
                 state.query = parseQuery(query);
+                
+                // Highlight all matches
+                // FUTURE: if last query was prefix of this one, could optimize by filtering existing result set
                 if (cm.lineCount() < 2000) { // This is too expensive on big documents.
                     var cursor = getSearchCursor(cm, query);
                     while (cursor.findNext()) {
                         state.marked.push(cm.markText(cursor.from(), cursor.to(), "CodeMirror-searching"));
                     }
                 }
-                state.posFrom = state.posTo = cm.getCursor();
+                
+                state.posFrom = state.posTo = searchStartPos;
                 findNext(cm, rev);
             });
-        });
-    }
-
-    function clearSearch(cm) {
-        cm.operation(function () {
-            var state = getSearchState(cm),
-                i;
-            if (!state.query) {
-                return;
-            }
-            state.query = null;
-            for (i = 0; i < state.marked.length; ++i) {
-                state.marked[i].clear();
-            }
-            state.marked.length = 0;
+        }
+        
+        dialog(cm, queryDialog, Strings.CMD_FIND, findFirst);
+        getDialogTextField().on("input", function () {
+            findFirst(getDialogTextField().attr("value"));
         });
     }
 
@@ -218,7 +245,7 @@ define(function (require, exports, module) {
             doSearch(codeMirror);
 
             // Prepopulate the search field with the current selection, if any
-            $(".CodeMirror-dialog input[type='text']")
+            getDialogTextField()
                 .attr("value", codeMirror.getSelection())
                 .get(0).select();
         }