diff --git a/reactos/apps/tests/Makefile b/reactos/apps/tests/Makefile
index b9d81412ff3..c8a41e74822 100644
--- a/reactos/apps/tests/Makefile
+++ b/reactos/apps/tests/Makefile
@@ -7,8 +7,8 @@ PATH_TO_TOP = ../..
 include $(PATH_TO_TOP)/rules.mak
 
 # test_old tests
-TEST_APPS = SampleWindow alive apc args atomtest bench bitblt \
-button button2 capclock cliarea combo consume copymove count dibtest \
+TEST_APPS = SampleWindow alive apc args atomtest bench bitblt button \
+button2 capclock caretscliarea combo consume copymove count dibtest \
 dump_shared_data edit enumwnd event file gditest global_mem hello \
 hivetest icontest isotest lineclip linetest lock lpc messagebox mktime \
 mstest multiwin mutex nptest patblt pipe primitives pteb regtest \
diff --git a/reactos/apps/tests/carets/.cvsignore b/reactos/apps/tests/carets/.cvsignore
new file mode 100644
index 00000000000..d63774a7353
--- /dev/null
+++ b/reactos/apps/tests/carets/.cvsignore
@@ -0,0 +1,6 @@
+*.o
+*.d
+*.exe
+*.coff
+*.sym
+*.map
diff --git a/reactos/apps/tests/carets/caret.bmp b/reactos/apps/tests/carets/caret.bmp
new file mode 100644
index 00000000000..5082a5b71a5
Binary files /dev/null and b/reactos/apps/tests/carets/caret.bmp differ
diff --git a/reactos/apps/tests/carets/carets.c b/reactos/apps/tests/carets/carets.c
new file mode 100644
index 00000000000..3c71e5c0470
--- /dev/null
+++ b/reactos/apps/tests/carets/carets.c
@@ -0,0 +1,150 @@
+#include <windows.h>
+#include <stdio.h>
+#include "resource.h"
+
+static int CaretWidth = 2;
+static int CaretHeight = 16;
+static int CharWidth = 10;
+static int CharHeight = 16;
+static HBITMAP CaretBitmap;
+
+LRESULT WINAPI MainWndProc(HWND, UINT, WPARAM, LPARAM);
+
+int WINAPI 
+WinMain(HINSTANCE hInstance,
+	HINSTANCE hPrevInstance,
+	LPSTR lpszCmdLine,
+	int nCmdShow)
+{
+  WNDCLASS wc;
+  MSG msg;
+  HWND hWnd;
+  
+  CaretBitmap = LoadBitmap(hInstance, (LPCTSTR)IDB_CARET);
+
+  wc.lpszClassName = "CaretTestClass";
+  wc.lpfnWndProc = MainWndProc;
+  wc.style = CS_VREDRAW | CS_HREDRAW;
+  wc.hInstance = hInstance;
+  wc.hIcon = LoadIcon(NULL, (LPCTSTR)IDI_APPLICATION);
+  wc.hCursor = LoadCursor(NULL, (LPCTSTR)IDC_ARROW);
+  wc.hbrBackground = (HBRUSH)COLOR_WINDOW;
+  wc.lpszMenuName = NULL;
+  wc.cbClsExtra = 0;
+  wc.cbWndExtra = 0;
+  if (RegisterClass(&wc) == 0)
+    {
+      fprintf(stderr, "RegisterClass failed (last error 0x%X)\n",
+	      GetLastError());
+      return(1);
+    }
+
+  hWnd = CreateWindow(wc.lpszClassName,
+		      "Caret Test",
+		      WS_OVERLAPPEDWINDOW,
+		      0,
+		      0,
+		      200,
+		      250,
+		      NULL,
+		      NULL,
+		      hInstance,
+		      NULL);
+  if (hWnd == NULL)
+    {
+      fprintf(stderr, "CreateWindow failed (last error 0x%X)\n",
+	      GetLastError());
+      return(1);
+    }
+
+  ShowWindow(hWnd, nCmdShow);
+
+  while(GetMessage(&msg, NULL, 0, 0))
+  {
+    TranslateMessage(&msg);
+    DispatchMessage(&msg);
+  }
+
+  return msg.wParam;
+}
+
+LRESULT CALLBACK MainWndProc(HWND hWnd, UINT msg, WPARAM wParam, LPARAM lParam)
+{
+  POINT pt;
+	switch(msg)
+	{
+    case WM_ACTIVATE:
+      switch(LOWORD(wParam))
+      {
+        case WA_ACTIVE:
+        case WA_CLICKACTIVE:
+          if(!ShowCaret(hWnd))
+            DbgPrint("ShowCaret(0x%x)\n", hWnd);
+          break;
+        case WA_INACTIVE:
+          if(!HideCaret(hWnd))
+            DbgPrint("HideCaret(0x%x)\n", hWnd);
+          break;
+      }
+      break;
+    
+    case WM_KEYDOWN:
+      if(!GetCaretPos(&pt))
+      {
+        DbgPrint("GetCaretPos() failed!\n");
+        break;
+      }
+      switch(wParam)
+      {
+        case VK_LEFT:
+          pt.x -= CharWidth;
+          break;
+        case VK_UP:
+          pt.y -= CharHeight;
+          break;
+        case VK_RIGHT:
+          pt.x += CharWidth;
+          break;
+        case VK_DOWN:
+          pt.y += CharHeight;
+          break;
+      }
+      if(!SetCaretPos(pt.x, pt.y))
+        DbgPrint("SetCaretPos() failed!\n");
+      break;
+    
+    case WM_RBUTTONDOWN:
+      if(!CreateCaret(hWnd, CaretBitmap, 0, 0))
+        DbgPrint("CreateCaret() for window 0x%x failed!\n", hWnd);
+      else
+        if(!ShowCaret(hWnd))
+          DbgPrint("ShowCaret(0x%x)\n", hWnd);
+      break;
+    
+    case WM_LBUTTONDOWN:
+      if(!CreateCaret(hWnd, (HBITMAP)0, CaretWidth, CaretHeight))
+        DbgPrint("CreateCaret() for window 0x%x failed!\n", hWnd);
+      else
+        if(!ShowCaret(hWnd))
+          DbgPrint("ShowCaret(0x%x)\n", hWnd);
+      break;
+    
+    case WM_CREATE:
+      if(!CreateCaret(hWnd, (HBITMAP)0, CaretWidth, CaretHeight))
+        DbgPrint("CreateCaret() for window 0x%x failed!\n", hWnd);
+      else
+        if(!SetCaretPos(1, 1))
+          DbgPrint("SetCaretPos(%i, %i) failed!\n", 1, 1);
+      break;
+    
+    case WM_DESTROY:
+      if(!DestroyCaret())
+        DbgPrint("DestroyCaret() failed!\n");
+      PostQuitMessage(0);
+      break;
+    
+    default:
+      return DefWindowProc(hWnd, msg, wParam, lParam);
+	}
+	return 0;
+}
diff --git a/reactos/apps/tests/carets/carets.rc b/reactos/apps/tests/carets/carets.rc
new file mode 100644
index 00000000000..46206dad917
--- /dev/null
+++ b/reactos/apps/tests/carets/carets.rc
@@ -0,0 +1,5 @@
+#include <defines.h>
+#include <reactos/resource.h>
+#include "resource.h"
+
+IDB_CARET                BITMAP    DISCARDABLE     "caret.bmp"
diff --git a/reactos/apps/tests/carets/makefile b/reactos/apps/tests/carets/makefile
new file mode 100644
index 00000000000..a5f1c33e7c4
--- /dev/null
+++ b/reactos/apps/tests/carets/makefile
@@ -0,0 +1,21 @@
+# $Id: makefile,v 1.1 2003/10/15 18:28:54 weiden Exp $
+
+PATH_TO_TOP = ../../..
+
+TARGET_NORC = no
+
+TARGET_TYPE = program
+
+TARGET_APPTYPE = windows
+
+TARGET_NAME = carets
+
+TARGET_SDKLIBS = kernel32.a gdi32.a ntdll.a
+
+TARGET_OBJECTS = $(TARGET_NAME).o
+
+include $(PATH_TO_TOP)/rules.mak
+
+include $(TOOLS_PATH)/helper.mk
+
+# EOF
diff --git a/reactos/apps/tests/carets/resource.h b/reactos/apps/tests/carets/resource.h
new file mode 100644
index 00000000000..4550828495a
--- /dev/null
+++ b/reactos/apps/tests/carets/resource.h
@@ -0,0 +1 @@
+#define IDB_CARET                        101