diff --git a/complete.c b/complete.c
index f7e9a1f6d..f5e3fe333 100644
--- a/complete.c
+++ b/complete.c
@@ -334,7 +334,7 @@ void complete_destroy()
 		complete_free_entry( prev );
 	}
 	first_entry = 0;
-
+	
 	if( suffix_hash )
 	{
 		hash_foreach( suffix_hash, &clear_hash_entry );
@@ -342,9 +342,9 @@ void complete_destroy()
 		free( suffix_hash );
 		suffix_hash=0;
 	}
-
+	
 	path = env_get( L"fish_complete_path" );
-
+	
 	if( path )
 		parse_util_load_reset( path );
 	
@@ -1338,17 +1338,16 @@ static void complete_from_args( const wchar_t *str,
 								const wchar_t *desc,
 								array_list_t *comp_out )
 {
-	int was_interactive = is_interactive;
 
 	array_list_t possible_comp;
 	int i;
 
 	al_init( &possible_comp );
 
-	is_interactive=0;
+	proc_push_interactive(0);
 	eval_args( args, &possible_comp );
-	is_interactive=was_interactive;
-
+	proc_pop_interactive();
+	
 	/* We need to unescape these strings before matching them */
 	for( i=0; i< al_get_count( &possible_comp ); i++ )
 	{
diff --git a/event.c b/event.c
index e81eb3ce5..d7004ba2f 100644
--- a/event.c
+++ b/event.c
@@ -385,8 +385,6 @@ static void event_fire_internal( event_t *event )
 	int i, j;
 	string_buffer_t *b=0;
 	array_list_t *fire=0;
-
-	int was_interactive = is_interactive;
 	
 	/*
 	  First we free all events that have been removed
@@ -462,19 +460,14 @@ static void event_fire_internal( event_t *event )
 		  Event handlers are not part of the main flow of code, so
 		  they are marked as non-interactive and as a subshell
 		*/
-		is_interactive=0;
+		proc_push_interactive(0);
 		parser_push_block( EVENT );
 		current_block->param1.event = event;
 		eval( (wchar_t *)b->buff, 0, TOP );
 		parser_pop_block();
-				
+		proc_pop_interactive();					
 	}
 
-	/*
-	  Restore interactivity flags
-	*/
-	is_interactive = was_interactive;
-
 	if( b )
 	{
 		sb_destroy( b );
diff --git a/parser.c b/parser.c
index 4cd9b3930..205dc2ef3 100644
--- a/parser.c
+++ b/parser.c
@@ -917,9 +917,9 @@ int eval_args( const wchar_t *line, array_list_t *args )
 	tokenizer *previous_tokenizer=current_tokenizer;
 	int previous_pos=current_tokenizer_pos;
 	int do_loop=1;
-	int was_interactive = is_interactive;
 
-	is_interactive = 0;
+	proc_push_interactive(0);	
+
 	current_tokenizer_pos = 0;
 	
 	tok_init( &tok, line, 0 );
@@ -978,7 +978,7 @@ int eval_args( const wchar_t *line, array_list_t *args )
 	
 	current_tokenizer=previous_tokenizer;
 	current_tokenizer_pos = previous_pos;
-	is_interactive = was_interactive;
+	proc_pop_interactive();
 	
 	return 1;
 }
diff --git a/proc.c b/proc.c
index f804e8bf8..6fe85395a 100644
--- a/proc.c
+++ b/proc.c
@@ -54,6 +54,8 @@ Some of the code in this file is based on code from the Glibc manual.
 #include "event.h"
 #include "translate.h"
 #include "halloc.h"
+#include "halloc_util.h"
+#include "output.h"
 
 /**
    Size of message buffer 
@@ -76,7 +78,7 @@ static int last_status=0;
 static sig_atomic_t got_signal=0;
 
 job_t *first_job=0;
-int is_interactive=0;
+int is_interactive=-1;
 int is_interactive_session=0;
 int is_subshell=0;
 int is_block=0;
@@ -101,9 +103,12 @@ static string_buffer_t event_pid;
 */
 static string_buffer_t event_status;
 
+static array_list_t *interactive_stack;
 
 void proc_init()
 {
+	interactive_stack = al_halloc( global_context );
+	proc_push_interactive( 0 );
 	al_init( &event.arguments );
 	sb_init( &event_pid );
 	sb_init( &event_status );
@@ -1077,3 +1082,19 @@ void proc_sanity_check()
 	}	
 }
 
+void proc_push_interactive( int value )
+{
+	int old = is_interactive;
+	al_push( interactive_stack, (void *)(long)is_interactive );
+	is_interactive = value;
+	if( old != value )
+		signal_set_handlers();
+}
+
+void proc_pop_interactive()
+{
+	int old = is_interactive;
+	is_interactive= (int)(long)al_pop(interactive_stack);
+	if( is_interactive != old )
+		signal_set_handlers();
+}
diff --git a/proc.h b/proc.h
index 4e46b2ae6..405d4d45e 100644
--- a/proc.h
+++ b/proc.h
@@ -337,4 +337,16 @@ void proc_init();
 */
 void proc_destroy();
 
+/**
+   Set new value for is_interactive flag, saving previous value. If
+   needed, update signal handlers.
+*/
+void proc_push_interactive( int value );
+
+/**
+   Set is_interactive flag to the previous value. If needed, update
+   signal handlers.
+*/
+void proc_pop_interactive();
+
 #endif
diff --git a/reader.c b/reader.c
index 3023f2c3b..47f23d042 100644
--- a/reader.c
+++ b/reader.c
@@ -606,7 +606,6 @@ void reader_write_title()
 	wchar_t *title;
 	array_list_t l;
 	wchar_t *term = env_get( L"TERM" );
-	int was_interactive = is_interactive;
 
 	/*
 	  This is a pretty lame heuristic for detecting terminals that do
@@ -628,7 +627,7 @@ void reader_write_title()
 
 	al_init( &l );
 
-	is_interactive = 0;
+	proc_push_interactive(0);
 	if( exec_subshell( title, &l ) != -1 )
 	{
 		int i;
@@ -639,8 +638,8 @@ void reader_write_title()
 		}
 		writestr( L"\7" );
 	}
-	is_interactive = was_interactive;
-	
+	proc_pop_interactive();
+		
 	al_foreach( &l, (void (*)(const void *))&free );
 	al_destroy( &l );
 	set_color( FISH_COLOR_RESET, FISH_COLOR_RESET );
@@ -790,8 +789,8 @@ static void write_prompt()
 
 		if( data->prompt )
 		{
-			int was_interactive = is_interactive;
-			is_interactive = 0;
+			proc_push_interactive( 0 );
+			
 			if( exec_subshell( data->prompt, &prompt_list ) == -1 )
 			{
 				/* If executing the prompt fails, make sure we at least don't print any junk */
@@ -799,7 +798,7 @@ static void write_prompt()
 				al_destroy( &prompt_list );
 				al_init( &prompt_list );
 			}
-			is_interactive = was_interactive;			
+			proc_pop_interactive();
 		}
 
 		data->prompt_width=calc_prompt_width( &prompt_list );
@@ -1472,7 +1471,7 @@ static void run_pager( wchar_t *prefix, int is_quoted, array_list_t *comp )
    the prefix.
    - If the list contains multiple elements without
    a common prefix, call run_pager to display a list of completions
-
+   
    \param comp the list of completion strings
 */
 
@@ -1480,7 +1479,7 @@ static void run_pager( wchar_t *prefix, int is_quoted, array_list_t *comp )
 static int handle_completions( array_list_t *comp )
 {
 	int i;
-
+	
 	if( al_get_count( comp ) == 0 )
 	{
 		if( flash_screen != 0 )
@@ -2967,11 +2966,9 @@ int reader_read( int fd )
 	  we need to preserve is_interactive, so we save the
 	  original state. We also update the signal handlers.
 	*/
-	int shell_was_interactive = is_interactive;
-
-	is_interactive = ((fd == 0) && isatty(STDIN_FILENO));
-	signal_set_handlers();
 
+	proc_push_interactive( ((fd == 0) && isatty(STDIN_FILENO)));
+		
 	res= is_interactive?read_i():read_ni( fd );
 
 	/*
@@ -2982,7 +2979,6 @@ int reader_read( int fd )
 		data->end_loop = 0;
 	end_loop = 0;
 	
-	is_interactive = shell_was_interactive;
-	signal_set_handlers();
+	proc_pop_interactive();
 	return res;
 }
diff --git a/signal.c b/signal.c
index dbd3b701a..108af53e0 100644
--- a/signal.c
+++ b/signal.c
@@ -387,7 +387,6 @@ static void handle_winch( int sig, siginfo_t *info, void *context )
 static void handle_int( int sig, siginfo_t *info, void *context )
 {
 	reader_handle_int( sig );
-
 	default_handler( sig, info, context);	
 }
 
@@ -422,6 +421,10 @@ void signal_reset_handlers()
 void signal_set_handlers()
 {
 	struct sigaction act;
+
+	if( is_interactive == -1 )
+		return;
+	
 	sigemptyset( & act.sa_mask );
 	act.sa_flags=SA_SIGINFO;
 	act.sa_sigaction = &default_handler;
@@ -442,7 +445,7 @@ void signal_set_handlers()
 	  recover.
 	*/
 	sigaction( SIGPIPE, &act, 0);
-	
+
 	if( is_interactive )
 	{
 		/*