diff --git a/reactos/base/setup/setup/setup.c b/reactos/base/setup/setup/setup.c
index cf788916990..87fce5d202a 100644
--- a/reactos/base/setup/setup/setup.c
+++ b/reactos/base/setup/setup/setup.c
@@ -85,6 +85,33 @@ RunNewSetup (HINSTANCE hInstance)
   FreeLibrary (hDll);
 }
 
+static VOID
+RunLiveCD (HINSTANCE hInstance)
+{
+  HMODULE hDll;
+  PINSTALL_REACTOS InstallLiveCD;
+
+  hDll = LoadLibrary (TEXT("syssetup"));
+  if (hDll == NULL)
+    {
+      DPRINT("Failed to load 'syssetup'!\n");
+      return;
+    }
+
+  DPRINT("Loaded 'syssetup'!\n");
+  InstallLiveCD = (PINSTALL_REACTOS)GetProcAddress (hDll, "InstallLiveCD");
+
+  if (InstallLiveCD == NULL)
+    {
+      DPRINT("Failed to get address for 'InstallReactOS()'!\n");
+      FreeLibrary (hDll);
+      return;
+    }
+
+  InstallLiveCD (hInstance);
+
+  FreeLibrary (hDll);
+}
 
 int STDCALL
 WinMain (HINSTANCE hInstance,
@@ -107,6 +134,10 @@ WinMain (HINSTANCE hInstance,
     {
       RunNewSetup (hInstance);
     }
+  else if (!lstrcmpi (p, TEXT("-mini")))
+    {
+      RunLiveCD (hInstance);
+    }
 
 #if 0
   /* Add new setup types here */
diff --git a/reactos/boot/bootdata/livecd.inf b/reactos/boot/bootdata/livecd.inf
index 767582a9aae..63eadfc5d90 100644
--- a/reactos/boot/bootdata/livecd.inf
+++ b/reactos/boot/bootdata/livecd.inf
@@ -17,10 +17,7 @@ HKLM,"SYSTEM\CurrentControlSet\Services\Cdrom","Start",0x00010001,0x00000000
 HKLM,"SYSTEM\CurrentControlSet\Services\Ntfs","Start",0x00010001,0x00000004
 
 ; Shell
-HKLM,"SYSTEM\Setup","CmdLine",0x00020000,"%SystemRoot%\explorer.exe"
-
-; Serial mouse driver
-HKLM,"SYSTEM\CurrentControlSet\Services\Sermouse","Start",0x00010001,0x00000001
+HKLM,"SYSTEM\Setup","CmdLine",0x00020000,"setup -mini"
 
 ; User Profile List
 HKLM,"SOFTWARE\Microsoft\Windows NT\CurrentVersion\ProfileList",,0x00000012
diff --git a/reactos/dll/win32/syssetup/install.c b/reactos/dll/win32/syssetup/install.c
index 42c0ea3c895..991a9c1ae82 100644
--- a/reactos/dll/win32/syssetup/install.c
+++ b/reactos/dll/win32/syssetup/install.c
@@ -368,6 +368,97 @@ cleanup:
 }
 
 
+DWORD STDCALL
+InstallLiveCD (HINSTANCE hInstance)
+{
+  LONG rc;
+  HKEY hKey = NULL;
+  DWORD dwType;
+  DWORD requiredSize;
+  LPTSTR Shell = NULL;
+  TCHAR CommandLine[MAX_PATH];
+  STARTUPINFO StartupInfo;
+  PROCESS_INFORMATION ProcessInformation;
+  BOOL res;
+
+  /* Load the default shell */
+  rc = RegOpenKeyEx(
+    HKEY_LOCAL_MACHINE,
+    TEXT("SOFTWARE\\ReactOS\\Windows NT\\CurrentVersion\\Winlogon"), /* FIXME: should be REGSTR_PATH_WINLOGON */
+    0,
+    KEY_QUERY_VALUE,
+    &hKey);
+  if (rc != ERROR_SUCCESS)
+    goto cleanup;
+  rc = RegQueryValueEx(
+    hKey,
+    TEXT("Shell"),
+    NULL,
+    &dwType,
+    NULL,
+    &requiredSize);
+  if (rc != ERROR_SUCCESS)
+    goto cleanup;
+  else if (dwType != REG_SZ && dwType != REG_EXPAND_SZ)
+    goto cleanup;
+  else if (requiredSize > (MAX_PATH - 1) * sizeof(TCHAR))
+    goto cleanup;
+  Shell = HeapAlloc(GetProcessHeap(), 0, requiredSize + sizeof(TCHAR));
+  if (!Shell)
+    goto cleanup;
+  Shell[requiredSize / sizeof(WCHAR)] = '\0';
+  rc = RegQueryValueEx(
+    hKey,
+    TEXT("Shell"),
+    NULL,
+    NULL,
+    (LPBYTE)Shell,
+    &requiredSize);
+  if (rc != ERROR_SUCCESS)
+    goto cleanup;
+  if (dwType == REG_EXPAND_SZ)
+    ExpandEnvironmentStrings(Shell, CommandLine, MAX_PATH);
+  else if (dwType == REG_SZ)
+    _tcscpy(CommandLine, Shell);
+
+  /* Run the shell */
+  StartupInfo.cb = sizeof(StartupInfo);
+  StartupInfo.lpReserved = NULL;
+  StartupInfo.lpDesktop = NULL;
+  StartupInfo.lpTitle = NULL;
+  StartupInfo.dwFlags = 0;
+  StartupInfo.cbReserved2 = 0;
+  StartupInfo.lpReserved2 = 0;
+  res = CreateProcess(
+    CommandLine,
+    NULL,
+    NULL,
+    NULL,
+    FALSE,
+    0,
+    NULL,
+    NULL,
+    &StartupInfo,
+    &ProcessInformation);
+  if (!res)
+    goto cleanup;
+
+  /* Wait for process termination */
+  WaitForSingleObject(ProcessInformation.hProcess, INFINITE);
+
+cleanup:
+  if (hKey != NULL)
+    RegCloseKey(hKey);
+  HeapFree(GetProcessHeap(), 0, Shell);
+  MessageBoxA(
+    NULL,
+    "You can shutdown your computer, or press ENTER to reboot",
+    "ReactOS LiveCD",
+    MB_OK);
+  return 0;
+}
+
+
 DWORD STDCALL
 InstallReactOS (HINSTANCE hInstance)
 {
diff --git a/reactos/dll/win32/syssetup/syssetup.def b/reactos/dll/win32/syssetup/syssetup.def
index 6de54b74e9d..7bb773198ec 100644
--- a/reactos/dll/win32/syssetup/syssetup.def
+++ b/reactos/dll/win32/syssetup/syssetup.def
@@ -4,6 +4,7 @@ EXPORTS
 ;DevInstallW
 ;GenerateScsiHwIdList
 InitializeSetupActionLog@4
+InstallLiveCD@4
 InstallReactOS@4
 KeyboardClassInstaller@12
 LogItem@8