diff --git a/dlls/riched20/editor.c b/dlls/riched20/editor.c
index 9b1904dbc46..783e91d1aeb 100644
--- a/dlls/riched20/editor.c
+++ b/dlls/riched20/editor.c
@@ -597,7 +597,7 @@ static LRESULT ME_StreamIn(ME_TextEditor *editor, DWORD format, EDITSTREAM *stre
 {
   RTF_Info parser;
   ME_Style *style;
-  int from, to, to2;
+  int from, to, to2, nUndoMode;
   int nEventMask = editor->nEventMask;
   ME_InStream inStream;
 
@@ -619,7 +619,15 @@ static LRESULT ME_StreamIn(ME_TextEditor *editor, DWORD format, EDITSTREAM *stre
     ME_ClearTempStyle(editor);
     /* FIXME restore default paragraph formatting ! */
   }
-  
+
+
+  /* Back up undo mode to a local variable */
+  nUndoMode = editor->nUndoMode;
+
+  /* Only create an undo if SFF_SELECTION is set */
+  if (!(format & SFF_SELECTION))
+    editor->nUndoMode = umIgnore;
+
   inStream.editstream = stream;
   inStream.editstream->dwError = 0;
   inStream.dwSize = 0;
@@ -671,17 +679,17 @@ static LRESULT ME_StreamIn(ME_TextEditor *editor, DWORD format, EDITSTREAM *stre
       SendMessageA(editor->hWnd, EM_SETSEL, 0, 0);
   }
 
-  if (format & SFF_SELECTION)
-  {
-    /* even if we didn't add an undo, we need to commit the ones added earlier */
-    ME_CommitUndo(editor);
-  }
-  else
-  {
-    ME_EmptyUndoStack(editor);
-  }
+  /* Restore saved undo mode */
+  editor->nUndoMode = nUndoMode;
 
-  ME_ReleaseStyle(style); 
+  /* even if we didn't add an undo, we need to commit anything on the stack */
+  ME_CommitUndo(editor);
+
+  /* If SFF_SELECTION isn't set, delete any undos from before we started too */
+  if (!(format & SFF_SELECTION))
+    ME_EmptyUndoStack(editor);
+
+  ME_ReleaseStyle(style);
   editor->nEventMask = nEventMask;
   if (editor->bRedraw)
   {
diff --git a/dlls/riched20/tests/editor.c b/dlls/riched20/tests/editor.c
index f86ca5a7f18..60ab7ab8fdd 100644
--- a/dlls/riched20/tests/editor.c
+++ b/dlls/riched20/tests/editor.c
@@ -1462,6 +1462,106 @@ static void test_WM_PASTE(void)
     DestroyWindow(hwndRichEdit);
 }
 
+static int nCallbackCount = 0;
+
+static DWORD CALLBACK EditStreamCallback(DWORD_PTR dwCookie, LPBYTE pbBuff,
+				 LONG cb, LONG* pcb)
+{
+  const char text[] = {'t','e','s','t'};
+
+  if (sizeof(text) <= cb)
+  {
+    if ((int)dwCookie != nCallbackCount)
+    {
+      *pcb = 0;
+      return 0;
+    }
+
+    memcpy (pbBuff, text, sizeof(text));
+    *pcb = sizeof(text);
+
+    nCallbackCount++;
+
+    return 0;
+  }
+  else
+    return 1; /* indicates callback failed */
+}
+
+static void test_EM_StreamIn_Undo(void)
+{
+  /* The purpose of this test is to determine when a EM_StreamIn should be
+   * undoable. This is important because WM_PASTE currently uses StreamIn and
+   * pasting should always be undoable but streaming isn't always.
+   *
+   * cases to test:
+   * StreamIn plain text without SFF_SELECTION.
+   * StreamIn plain text with SFF_SELECTION set but a zero-length selection
+   * StreamIn plain text with SFF_SELECTION and a valid, normal selection
+   * StreamIn plain text with SFF_SELECTION and a backwards-selection (from>to)
+   * Feel free to add tests for other text modes or StreamIn things.
+   */
+
+
+  HWND hwndRichEdit = new_richedit(NULL);
+  LRESULT result;
+  EDITSTREAM es;
+  char buffer[1024] = {0};
+  const char randomtext[] = "Some text";
+
+  es.pfnCallback = (EDITSTREAMCALLBACK) EditStreamCallback;
+
+  /* StreamIn, no SFF_SELECTION */
+  es.dwCookie = nCallbackCount;
+  SendMessage(hwndRichEdit,EM_EMPTYUNDOBUFFER, 0,0);
+  SendMessage(hwndRichEdit, WM_SETTEXT, 0, (LPARAM) randomtext);
+  SendMessage(hwndRichEdit, EM_SETSEL,0,0);
+  SendMessage(hwndRichEdit, EM_STREAMIN, (WPARAM)SF_TEXT, (LPARAM)&es);
+  SendMessage(hwndRichEdit, WM_GETTEXT, 1024, (LPARAM) buffer);
+  result = strcmp (buffer,"test");
+  ok (result  == 0,
+      "EM_STREAMIN: Test 1 set wrong text: Result: %s\n",buffer);
+
+  result = SendMessage(hwndRichEdit, EM_CANUNDO, 0, 0);
+  ok (result == FALSE,
+      "EM_STREAMIN without SFF_SELECTION wrongly allows undo\n");
+
+  /* StreamIn, SFF_SELECTION, but nothing selected */
+  es.dwCookie = nCallbackCount;
+  SendMessage(hwndRichEdit,EM_EMPTYUNDOBUFFER, 0,0);
+  SendMessage(hwndRichEdit, WM_SETTEXT, 0, (LPARAM) randomtext);
+  SendMessage(hwndRichEdit, EM_SETSEL,0,0);
+  SendMessage(hwndRichEdit, EM_STREAMIN,
+	      (WPARAM)(SF_TEXT|SFF_SELECTION), (LPARAM)&es);
+  SendMessage(hwndRichEdit, WM_GETTEXT, 1024, (LPARAM) buffer);
+  result = strcmp (buffer,"testSome text");
+  ok (result  == 0,
+      "EM_STREAMIN: Test 2 set wrong text: Result: %s\n",buffer);
+
+  result = SendMessage(hwndRichEdit, EM_CANUNDO, 0, 0);
+  ok (result == TRUE,
+     "EM_STREAMIN with SFF_SELECTION but no selection set "
+      "should create an undo\n");
+
+  /* StreamIn, SFF_SELECTION, with a selection */
+  es.dwCookie = nCallbackCount;
+  SendMessage(hwndRichEdit,EM_EMPTYUNDOBUFFER, 0,0);
+  SendMessage(hwndRichEdit, WM_SETTEXT, 0, (LPARAM) randomtext);
+  SendMessage(hwndRichEdit, EM_SETSEL,4,5);
+  SendMessage(hwndRichEdit, EM_STREAMIN,
+	      (WPARAM)(SF_TEXT|SFF_SELECTION), (LPARAM)&es);
+  SendMessage(hwndRichEdit, WM_GETTEXT, 1024, (LPARAM) buffer);
+  result = strcmp (buffer,"Sometesttext");
+  ok (result  == 0,
+      "EM_STREAMIN: Test 2 set wrong text: Result: %s\n",buffer);
+
+  result = SendMessage(hwndRichEdit, EM_CANUNDO, 0, 0);
+  ok (result == TRUE,
+      "EM_STREAMIN with SFF_SELECTION and selection set "
+      "should create an undo\n");
+
+}
+
 START_TEST( editor )
 {
   MSG msg;
@@ -1490,6 +1590,7 @@ START_TEST( editor )
   test_EM_GETMODIFY();
   test_EM_EXSETSEL();
   test_WM_PASTE();
+  test_EM_StreamIn_Undo();
 
   /* Set the environment variable WINETEST_RICHED20 to keep windows
    * responsive and open for 30 seconds. This is useful for debugging.