diff --git a/IPython/frontend/html/notebook/static/js/codecell.js b/IPython/frontend/html/notebook/static/js/codecell.js
index f97610edf..35c87961c 100644
--- a/IPython/frontend/html/notebook/static/js/codecell.js
+++ b/IPython/frontend/html/notebook/static/js/codecell.js
@@ -86,7 +86,7 @@ var IPython = (function (IPython) {
         if (event.keyCode === 13 && (event.shiftKey || event.ctrlKey)) {
             // Always ignore shift-enter in CodeMirror as we handle it.
             return true;
-        }else if (event.which === 40 && event.type === 'keypress' && tooltip_wait_time >= 0) {
+        } else if (event.which === 40 && event.type === 'keypress' && tooltip_wait_time >= 0) {
             // triger aon keypress (!) otherwise inconsistent event.which depending on plateform
             // browser and keyboard layout !
             // Pressing '(' , request tooltip, don't forget to reappend it
@@ -499,6 +499,7 @@ var IPython = (function (IPython) {
         select.focus();
     };
 
+
     CodeCell.prototype.toggle_line_numbers = function () {
         if (this.code_mirror.getOption('lineNumbers') == false) {
             this.code_mirror.setOption('lineNumbers', true);
@@ -508,15 +509,14 @@ var IPython = (function (IPython) {
         this.code_mirror.refresh();
     };
 
+
     CodeCell.prototype.select = function () {
         IPython.Cell.prototype.select.apply(this);
-        // Todo: this dance is needed because as of CodeMirror 2.12, focus is
-        // not causing the cursor to blink if the editor is empty initially.
-        // While this seems to fix the issue, this should be fixed
-        // in CodeMirror proper.
-        var s = this.code_mirror.getValue();
+        // In some cases (inserting a new cell) we need a refresh before and
+        // after the focus. Not sure why this is the case.
+        this.code_mirror.refresh();
         this.code_mirror.focus();
-        if (s === '') this.code_mirror.setValue('');
+        this.code_mirror.refresh();
     };
 
 
diff --git a/IPython/frontend/html/notebook/static/js/notebook.js b/IPython/frontend/html/notebook/static/js/notebook.js
index e75f1c2dd..c61574a6d 100644
--- a/IPython/frontend/html/notebook/static/js/notebook.js
+++ b/IPython/frontend/html/notebook/static/js/notebook.js
@@ -516,7 +516,11 @@ var IPython = (function (IPython) {
             source_cell instanceof IPython.MarkdownCell) {
             this.insert_code_cell_below(i);
             var target_cell = this.cells()[i+1];
-            target_cell.set_code(source_cell.get_source());
+            var text = source_cell.get_source();
+            if (text === source_cell.placeholder) {
+                text = '';
+            }
+            target_cell.set_code(text);
             source_element.remove();
             target_cell.select();
         };
@@ -544,9 +548,11 @@ var IPython = (function (IPython) {
         }
         if (target_cell !== null) {
             if (text === "") {text = target_cell.placeholder;};
+            // The edit must come before the set_source.
+            target_cell.edit();
             target_cell.set_source(text);
             source_element.remove();
-            target_cell.edit();
+            target_cell.select();
         }
         this.dirty = true;
     };
diff --git a/IPython/frontend/html/notebook/static/js/textcell.js b/IPython/frontend/html/notebook/static/js/textcell.js
index f24df58ac..382f1e29d 100644
--- a/IPython/frontend/html/notebook/static/js/textcell.js
+++ b/IPython/frontend/html/notebook/static/js/textcell.js
@@ -34,7 +34,8 @@ var IPython = (function (IPython) {
             mode: this.code_mirror_mode,
             theme: 'default',
             value: this.placeholder,
-            readOnly: this.read_only
+            readOnly: this.read_only,
+            onKeyEvent: $.proxy(this.handle_codemirror_keyevent,this)
         });
         // The tabindex=-1 makes this div focusable.
         var render_area = $('<div/>').addClass('text_cell_render').
@@ -51,13 +52,27 @@ var IPython = (function (IPython) {
             if (event.which === 13) {
                 if (that.rendered) {
                     that.edit();
-                    event.preventDefault();
+                    return false;
                 }
             }
         });
     };
 
 
+    TextCell.prototype.handle_codemirror_keyevent = function (editor, event) {
+        // This method gets called in CodeMirror's onKeyDown/onKeyPress
+        // handlers and is used to provide custom key handling. Its return
+        // value is used to determine if CodeMirror should ignore the event:
+        // true = ignore, false = don't ignore.
+
+        if (event.keyCode === 13 && (event.shiftKey || event.ctrlKey)) {
+            // Always ignore shift-enter in CodeMirror as we handle it.
+            return true;
+        }
+        return false;
+    };
+
+
     TextCell.prototype.select = function () {
         IPython.Cell.prototype.select.apply(this);
         var output = this.element.find("div.text_cell_render");
@@ -73,14 +88,16 @@ var IPython = (function (IPython) {
 
 
     TextCell.prototype.edit = function () {
+        var that = this;
         if ( this.read_only ) return;
         if (this.rendered === true) {
             var text_cell = this.element;
             var output = text_cell.find("div.text_cell_render");  
             output.hide();
             text_cell.find('div.text_cell_input').show();
+            that.code_mirror.refresh();
             this.code_mirror.focus();
-            this.code_mirror.refresh();
+            that.code_mirror.refresh();
             this.rendered = false;
             if (this.get_source() === this.placeholder) {
                 this.set_source('');