diff --git a/src/calibre/gui2/tweak_book/__init__.py b/src/calibre/gui2/tweak_book/__init__.py
index d185f60cde..173daeac1b 100644
--- a/src/calibre/gui2/tweak_book/__init__.py
+++ b/src/calibre/gui2/tweak_book/__init__.py
@@ -17,6 +17,7 @@ d['editor_font_family'] = None
 d['editor_font_size'] = 12
 d['editor_line_wrap'] = True
 d['editor_tab_stop_width'] = 2
+d['replace_entities_as_typed'] = True
 d['preview_refresh_time'] = 2
 d['choose_tweak_fmt'] = True
 d['tweak_fmt_order'] = ['EPUB', 'AZW3']
diff --git a/src/calibre/gui2/tweak_book/editor/text.py b/src/calibre/gui2/tweak_book/editor/text.py
index b8bcb869ba..49387b546c 100644
--- a/src/calibre/gui2/tweak_book/editor/text.py
+++ b/src/calibre/gui2/tweak_book/editor/text.py
@@ -6,6 +6,7 @@ from __future__ import (unicode_literals, division, absolute_import,
 __license__ = 'GPL v3'
 __copyright__ = '2013, Kovid Goyal <kovid at kovidgoyal.net>'
 
+import re
 import textwrap, unicodedata
 from future_builtins import map
 
@@ -15,7 +16,7 @@ from PyQt4.Qt import (
     QTextEdit, QTextFormat, QWidget, QSize, QPainter, Qt, QRect, pyqtSlot,
     QApplication, QMimeData, QColor, QColorDialog)
 
-from calibre import prepare_string_for_xml
+from calibre import prepare_string_for_xml, xml_entity_to_unicode
 from calibre.gui2.tweak_book import tprefs, TOP
 from calibre.gui2.tweak_book.editor import SYNTAX_PROPERTY
 from calibre.gui2.tweak_book.editor.themes import THEMES, default_theme, theme_color
@@ -24,6 +25,7 @@ from calibre.gui2.tweak_book.editor.syntax.html import HTMLHighlighter, XMLHighl
 from calibre.gui2.tweak_book.editor.syntax.css import CSSHighlighter
 
 PARAGRAPH_SEPARATOR = '\u2029'
+entity_pat = re.compile(r'&(#{0,1}[a-zA-Z0-9]{1,8});')
 
 _dff = None
 def default_font_family():
@@ -541,3 +543,20 @@ class TextEdit(QPlainTextEdit):
             c.setPosition(left + len(text), c.KeepAnchor)
         self.setTextCursor(c)
 
+    def keyPressEvent(self, ev):
+        QPlainTextEdit.keyPressEvent(self, ev)
+        if ev.key() == Qt.Key_Semicolon and tprefs['replace_entities_as_typed'] and self.syntax == 'html':
+            self.replace_possible_entity()
+
+    def replace_possible_entity(self):
+        c = self.textCursor()
+        c.setPosition(c.position() - min(c.positionInBlock(), 10), c.KeepAnchor)
+        text = unicode(c.selectedText())
+        m = entity_pat.search(text)
+        if m is None:
+            return
+        ent = m.group()
+        repl = xml_entity_to_unicode(m)
+        if repl != ent:
+            c.setPosition(c.position() + m.start(), c.KeepAnchor)
+            c.insertText(repl)
diff --git a/src/calibre/gui2/tweak_book/preferences.py b/src/calibre/gui2/tweak_book/preferences.py
index acafa2a8ed..3ee33e4b7f 100644
--- a/src/calibre/gui2/tweak_book/preferences.py
+++ b/src/calibre/gui2/tweak_book/preferences.py
@@ -172,6 +172,14 @@ class EditorSettings(BasicSettings):
         lw.setText(_('&Wrap long lines in the editor'))
         l.addRow(lw)
 
+        lw = self('replace_entities_as_typed')
+        lw.setText(_('&Replace HTML entities as they are typed'))
+        lw.setToolTip('<p>' + _(
+            'With this option, every time you type in a complete html entity, such as &amp;hellip;'
+            ' it is automatically replaced by its corresponding character. The replacement'
+            ' happens only when the trailing semi-colon is typed.'))
+        l.addRow(lw)
+
 class IntegrationSettings(BasicSettings):
 
     def __init__(self, parent=None):