diff --git a/CMakeLists.txt b/CMakeLists.txt
index 723d10b34..015ffd7ce 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -188,6 +188,7 @@ find_package(OpenAL REQUIRED)
 find_package(Bullet REQUIRED)
 include_directories("."
     ${OGRE_INCLUDE_DIR} ${OGRE_INCLUDE_DIR}/Ogre ${OGRE_INCLUDE_DIR}/OGRE
+    ${OGRE_Terrain_INCLUDE_DIR}
     ${OIS_INCLUDE_DIR} ${Boost_INCLUDE_DIR}
     ${PLATFORM_INCLUDE_DIR}
     ${CMAKE_HOME_DIRECTORY}/extern/caelum/include
@@ -259,6 +260,16 @@ if (APPLE)
     configure_file(${OGRE_PLUGIN_DIR}/Plugin_ParticleFX.dylib
         "${APP_BUNDLE_DIR}/Contents/Plugins/Plugin_ParticleFX.dylib" COPYONLY)
 
+    # prepare components
+    configure_file(${OGRE_LIB_DIR}/libOgrePaging.dylib
+        "${APP_BUNDLE_DIR}/Contents/Components/libOgrePaging.dylib" COPYONLY)
+
+    configure_file(${OGRE_LIB_DIR}/libOgreTerrain.dylib
+        "${APP_BUNDLE_DIR}/Contents/Components/libOgreTerrain.dylib" COPYONLY)
+        
+    configure_file(${OpenMW_SOURCE_DIR}/files/openmw.cfg
+        "${APP_BUNDLE_DIR}/Contents/MacOS/openmw.cfg")
+
 endif (APPLE)
 
 
diff --git a/apps/openmw/CMakeLists.txt b/apps/openmw/CMakeLists.txt
index e17a2cb25..663a10787 100644
--- a/apps/openmw/CMakeLists.txt
+++ b/apps/openmw/CMakeLists.txt
@@ -16,7 +16,7 @@ set(GAME_HEADER
 source_group(game FILES ${GAME} ${GAME_HEADER})
 
 add_openmw_dir (mwrender
-    renderingmanager debugging sky player npcs creatures objects renderinginterface
+    renderingmanager debugging sky terrain player npcs creatures objects renderinginterface
     )
 
 add_openmw_dir (mwinput
@@ -75,6 +75,7 @@ add_definitions(${SOUND_DEFINE})
 
 target_link_libraries(openmw
   ${OGRE_LIBRARIES}
+  ${OGRE_Terrain_LIBRARY}
   ${OIS_LIBRARIES}
   ${Boost_LIBRARIES}
   ${OPENAL_LIBRARY}
diff --git a/apps/openmw/mwrender/renderingmanager.cpp b/apps/openmw/mwrender/renderingmanager.cpp
index 06339cdd4..b0b7c88c4 100644
--- a/apps/openmw/mwrender/renderingmanager.cpp
+++ b/apps/openmw/mwrender/renderingmanager.cpp
@@ -26,6 +26,7 @@ RenderingManager::RenderingManager (OEngine::Render::OgreRenderer& _rend, const
 {
     rend.createScene("PlayerCam", 55, 5);
     mSkyManager = MWRender::SkyManager::create(rend.getWindow(), rend.getCamera(), resDir);
+    mTerrainManager = new TerrainManager(rend.getScene());
 
     // Set default mipmap level (NB some APIs ignore this)
     TextureManager::getSingleton().setDefaultNumMipmaps(5);
@@ -59,6 +60,7 @@ RenderingManager::~RenderingManager ()
 {
     delete mPlayer;
     delete mSkyManager;
+    delete mTerrainManager;
 }
 
 MWRender::Npcs& RenderingManager::getNPCs(){
@@ -76,11 +78,13 @@ MWRender::Player& RenderingManager::getPlayer(){
 
 void RenderingManager::removeCell (MWWorld::Ptr::CellStore *store){
     objects.removeCell(store);
+    mTerrainManager->cellRemoved(store);
 }
 
 void RenderingManager::cellAdded (MWWorld::Ptr::CellStore *store)
 {
     objects.buildStaticGeometry (*store);
+    mTerrainManager->cellAdded(store);
 }
 
 void RenderingManager::addObject (const MWWorld::Ptr& ptr){
diff --git a/apps/openmw/mwrender/renderingmanager.hpp b/apps/openmw/mwrender/renderingmanager.hpp
index 8d8c98232..5afbd9b78 100644
--- a/apps/openmw/mwrender/renderingmanager.hpp
+++ b/apps/openmw/mwrender/renderingmanager.hpp
@@ -3,6 +3,7 @@
 
 
 #include "sky.hpp"
+#include "terrain.hpp"
 #include "debugging.hpp"
 
 #include "../mwworld/class.hpp"
@@ -97,6 +98,7 @@ class RenderingManager: private RenderingInterface {
 
     void setAmbientMode();
     SkyManager* mSkyManager;
+    TerrainManager* mTerrainManager;
     OEngine::Render::OgreRenderer &rend;
     Ogre::Camera* camera;
     MWRender::Npcs npcs;
diff --git a/apps/openmw/mwrender/terrain.cpp b/apps/openmw/mwrender/terrain.cpp
new file mode 100644
index 000000000..44c499130
--- /dev/null
+++ b/apps/openmw/mwrender/terrain.cpp
@@ -0,0 +1,62 @@
+#include <OgreTerrain.h>
+#include <OgreTerrainGroup.h>
+
+#include "terrain.hpp"
+
+#include "components/esm/loadland.hpp"
+
+namespace MWRender
+{
+    TerrainManager::TerrainManager(Ogre::SceneManager* mgr)
+    {
+        mTerrainGlobals = OGRE_NEW Ogre::TerrainGlobalOptions();
+
+        mTerrainGlobals->setMaxPixelError(8);
+
+        mTerrainGroup = OGRE_NEW Ogre::TerrainGroup(mgr,
+                Ogre::Terrain::ALIGN_X_Z, ESM::Land::LAND_SIZE,
+                ESM::Land::REAL_SIZE);
+
+        mTerrainGroup->setOrigin(Ogre::Vector3(ESM::Land::REAL_SIZE/2,
+                                 0,
+                                 -ESM::Land::REAL_SIZE/2));
+
+        Ogre::Terrain::ImportData importSettings =
+                mTerrainGroup->getDefaultImportSettings();
+
+        importSettings.terrainSize = ESM::Land::LAND_SIZE;
+        importSettings.worldSize = ESM::Land::REAL_SIZE;
+        importSettings.minBatchSize = 9;
+        importSettings.maxBatchSize = 33;
+
+        importSettings.deleteInputData = false;
+    }
+
+    TerrainManager::~TerrainManager()
+    {
+        OGRE_DELETE mTerrainGroup;
+        OGRE_DELETE mTerrainGlobals;
+    }
+
+    void TerrainManager::cellAdded(MWWorld::Ptr::CellStore *store)
+    {
+        int x = store->cell->getGridX();
+        int y = store->cell->getGridY();
+
+        Ogre::Terrain::ImportData terrainData;
+
+        terrainData.inputBias = 0;
+        terrainData.inputFloat = store->land->landData->heights;
+
+        mTerrainGroup->defineTerrain(x, y, &terrainData);
+
+        mTerrainGroup->loadTerrain(x, y, true);
+    }
+
+    void TerrainManager::cellRemoved(MWWorld::Ptr::CellStore *store)
+    {
+        mTerrainGroup->removeTerrain(store->cell->getGridX(),
+                                     store->cell->getGridY());
+    }
+
+}
diff --git a/apps/openmw/mwrender/terrain.hpp b/apps/openmw/mwrender/terrain.hpp
new file mode 100644
index 000000000..0a8b1ace0
--- /dev/null
+++ b/apps/openmw/mwrender/terrain.hpp
@@ -0,0 +1,31 @@
+#ifndef _GAME_RENDER_TERRAIN_H
+#define _GAME_RENDER_TERRAIN_H
+
+#include "../mwworld/ptr.hpp"
+
+namespace Ogre{
+    class SceneManager;
+    class TerrainGroup;
+    class TerrainGlobalOptions;
+}
+
+namespace MWRender{
+
+    /**
+     * Implements the Morrowind terrain using the Ogre Terrain Component
+     */
+    class TerrainManager{
+    public:
+        TerrainManager(Ogre::SceneManager*);
+        virtual ~TerrainManager();
+
+        void cellAdded(MWWorld::Ptr::CellStore* store);
+        void cellRemoved(MWWorld::Ptr::CellStore* store);
+    private:
+        Ogre::TerrainGlobalOptions* mTerrainGlobals;
+        Ogre::TerrainGroup* mTerrainGroup;
+    };
+
+}
+
+#endif // _GAME_RENDER_TERRAIN_H
diff --git a/cmake/FindOGRE.cmake b/cmake/FindOGRE.cmake
index ce3993805..c3b471bb2 100644
--- a/cmake/FindOGRE.cmake
+++ b/cmake/FindOGRE.cmake
@@ -96,10 +96,25 @@ IF (OGRE_INCLUDE_DIR AND OGRE_LIBRARIES)
 ENDIF (OGRE_INCLUDE_DIR AND OGRE_LIBRARIES)
 
 IF (OGRE_FOUND)
+    # find terrain component
+    find_path(OGRE_Terrain_INCLUDE_DIR NAMES OgreTerrain.h HINTS ${OGRE_INCLUDE_DIR} PATH_SUFFIXES Terrain Components/Terrain/include)
+    set(OGRE_Terrain_LIBRARY_NAMES "OgreTerrain")
+    find_library(OGRE_Terrain_LIBRARY NAMES ${OGRE_Terrain_LIBRARY_NAMES} HINTS ${OGRE_LIB_DIR} PATH_SUFFIXES "" "release" "relwithdebinfo" "minsizerel")
+    if(OGRE_Terrain_INCLUDE_DIR AND OGRE_Terrain_LIBRARY)
+        SET(OGRE_Terrain_FOUND TRUE)
+    endif(OGRE_Terrain_INCLUDE_DIR AND OGRE_Terrain_LIBRARY)
+
     IF (NOT OGRE_FIND_QUIETLY)
         MESSAGE(STATUS "  libraries : ${OGRE_LIBRARIES} from ${OGRE_LIB_DIR}")
         MESSAGE(STATUS "  includes  : ${OGRE_INCLUDE_DIR}")
         MESSAGE(STATUS "  plugins   : ${OGRE_PLUGIN_DIR}")
+        IF (OGRE_Terrain_FOUND)
+            MESSAGE(STATUS "Ogre Terrain component found:")
+            MESSAGE(STATUS "  include   : ${OGRE_Terrain_INCLUDE_DIR}")
+            MESSAGE(STATUS "  library   : ${OGRE_Terrain_LIBRARY}")
+        ELSE (OGRE_Terrain_FOUND)
+            MESSAGE(FATAL_ERROR "Required Ogre terrain component not found")
+        ENDIF (OGRE_Terrain_FOUND)
     ENDIF (NOT OGRE_FIND_QUIETLY)
 ELSE (OGRE_FOUND)
     IF (OGRE_FIND_REQUIRED)
diff --git a/components/esm/loadcell.hpp b/components/esm/loadcell.hpp
index 671f702ca..a5d61f930 100644
--- a/components/esm/loadcell.hpp
+++ b/components/esm/loadcell.hpp
@@ -119,6 +119,21 @@ struct Cell
 
   void load(ESMReader &esm);
 
+  bool isExterior() const
+  {
+      return !(data.flags & Interior);
+  }
+
+  int getGridX() const
+  {
+      return data.gridX;
+  }
+
+  int getGridY() const
+  {
+      return data.gridY;
+  }
+
   // Restore the given reader to the stored position. Will try to open
   // the file matching the stored file name. If you want to read from
   // somewhere other than the file system, you need to pre-open the
diff --git a/components/esm/loadland.cpp b/components/esm/loadland.cpp
index 740d15a40..b8de98f0a 100644
--- a/components/esm/loadland.cpp
+++ b/components/esm/loadland.cpp
@@ -19,14 +19,93 @@ void Land::load(ESMReader &esm)
     int cnt = 0;
 
     // Skip these here. Load the actual data when the cell is loaded.
-    if(esm.isNextSub("VNML")) {esm.skipHSubSize(12675);cnt++;}
-    if(esm.isNextSub("VHGT")) {esm.skipHSubSize(4232);cnt++;}
-    if(esm.isNextSub("WNAM")) esm.skipHSubSize(81);
-    if(esm.isNextSub("VCLR")) esm.skipHSubSize(12675);
-    if(esm.isNextSub("VTEX")) {esm.skipHSubSize(512);cnt++;}
+    if (esm.isNextSub("VNML"))
+    {
+        esm.skipHSubSize(12675);
+        cnt++;
+    }
+    if (esm.isNextSub("VHGT"))
+    {
+        esm.skipHSubSize(4232);
+        cnt++;
+    }
+    if (esm.isNextSub("WNAM"))
+    {
+        esm.skipHSubSize(81);
+    }
+    if (esm.isNextSub("VCLR"))
+    {
+        esm.skipHSubSize(12675);
+    }
+    if (esm.isNextSub("VTEX"))
+    {
+        esm.skipHSubSize(512);
+        cnt++;
+    }
 
     // We need all three of VNML, VHGT and VTEX in order to use the
     // landscape.
     hasData = (cnt == 3);
+
+    dataLoaded = false;
+    landData = NULL;
 }
+
+void Land::loadData(ESMReader &esm)
+{
+    if (dataLoaded)
+    {
+        return;
+    }
+
+    landData = new LandData;
+
+    if (hasData)
+    {
+        esm.restoreContext(context);
+
+        //esm.getHNExact(landData->normals, sizeof(VNML), "VNML");
+        if (esm.isNextSub("VNML"))
+        {
+            esm.skipHSubSize(12675);
+        }
+
+        VHGT rawHeights;
+
+        esm.getHNExact(&rawHeights, sizeof(VHGT), "VHGT");
+        int currentHeightOffset = rawHeights.heightOffset;
+        for (int y = 0; y < LAND_SIZE; y++)
+        {
+            currentHeightOffset += rawHeights.heightData[y * LAND_SIZE];
+            landData->heights[y * LAND_SIZE] = currentHeightOffset * HEIGHT_SCALE;
+
+            int tempOffset = currentHeightOffset;
+            for (int x = 1; x < LAND_SIZE; x++)
+            {
+                tempOffset += rawHeights.heightData[y * LAND_SIZE + x];
+                landData->heights[x + y * LAND_SIZE] = tempOffset * HEIGHT_SCALE;
+            }
+        }
+    }
+    else
+    {
+        for (int i = 0; i < LAND_NUM_VERTS; i++)
+        {
+            landData->heights[i] = -256.0f * HEIGHT_SCALE;
+        }
+    }
+
+    dataLoaded = true;
+}
+
+void Land::unloadData()
+{
+    if (dataLoaded)
+    {
+        delete landData;
+        landData = NULL;
+        dataLoaded = false;
+    }
+}
+
 }
diff --git a/components/esm/loadland.hpp b/components/esm/loadland.hpp
index af91850ac..898e7f529 100644
--- a/components/esm/loadland.hpp
+++ b/components/esm/loadland.hpp
@@ -21,7 +21,51 @@ struct Land
 
     bool hasData;
 
+    bool dataLoaded;
+
+    // number of vertices per side
+    static const int LAND_SIZE = 65;
+
+    // cell terrain size in world coords
+    static const int REAL_SIZE = 8192;
+
+    // total number of vertices
+    static const int LAND_NUM_VERTS = LAND_SIZE * LAND_SIZE;
+
+    static const int HEIGHT_SCALE = 8;
+
+#pragma pack(push,1)
+    struct VHGT
+    {
+        float heightOffset;
+        int8_t heightData[LAND_NUM_VERTS];
+        short unknown1;
+        char unknown2;
+    };
+#pragma pack(pop)
+
+    typedef uint8_t VNML[LAND_NUM_VERTS * 3];
+
+    struct LandData
+    {
+        float heightOffset;
+        float heights[LAND_NUM_VERTS];
+        //float normals[LAND_NUM_VERTS * 3];
+    };
+
+    LandData *landData;
+
     void load(ESMReader &esm);
+
+    /**
+     * Actually loads data
+     */
+    void loadData(ESMReader &esm);
+
+    /**
+     * Frees memory allocated for land data
+     */
+    void unloadData();
 };
 }
 #endif
diff --git a/components/esm_store/cell_store.hpp b/components/esm_store/cell_store.hpp
index d064312f1..7c2ee48fb 100644
--- a/components/esm_store/cell_store.hpp
+++ b/components/esm_store/cell_store.hpp
@@ -96,7 +96,8 @@ namespace ESMS
         State_Unloaded, State_Preloaded, State_Loaded
     };
 
-    CellStore (const ESM::Cell *cell_) : cell (cell_), mState (State_Unloaded) {}
+    CellStore (const ESM::Cell *cell_) : cell (cell_), mState (State_Unloaded),
+                                         land(NULL) {}
 
     const ESM::Cell *cell;
     State mState;
@@ -124,6 +125,8 @@ namespace ESMS
     CellRefList<Static, D>            statics;
     CellRefList<Weapon, D>            weapons;
 
+    const Land* land;
+
     void load (const ESMStore &store, ESMReader &esm)
     {
         if (mState!=State_Loaded)
@@ -135,6 +138,11 @@ namespace ESMS
 
             loadRefs (store, esm);
 
+            if ( ! (cell->data.flags & ESM::Cell::Interior) )
+            {
+                loadTerrain(cell->data.gridX, cell->data.gridY, store, esm);
+            }
+
             mState = State_Loaded;
         }
     }
@@ -180,6 +188,29 @@ namespace ESMS
 
   private:
 
+    void loadTerrain(int X, int Y, const ESMStore &store, ESMReader &esm)
+    {
+        // load terrain
+        Land *land = store.lands.search(X, Y);
+        if (land != NULL)
+        {
+            land->loadData(esm);
+        }
+
+        this->land = land;
+    }
+
+    void unloadTerrain(int X, int Y, const ESMStore &store) {
+        Land *land = store.lands.search(X,Y);
+        // unload terrain
+        if (land != NULL)
+        {
+            land->unloadData();
+        }
+
+        this->land = NULL;
+    }
+
     template<class Functor, class List>
     bool forEachImp (Functor& functor, List& list)
     {
diff --git a/components/esm_store/reclists.hpp b/components/esm_store/reclists.hpp
index 20a2e8ff9..e150f1085 100644
--- a/components/esm_store/reclists.hpp
+++ b/components/esm_store/reclists.hpp
@@ -235,7 +235,7 @@ namespace ESMS
     virtual void listIdentifier (std::vector<std::string>& identifier) const {}
 
     // Find land for the given coordinates. Return null if no data.
-    const Land *search(int x, int y) const
+    Land *search(int x, int y) const
     {
       Lands::const_iterator it = lands.find(x);
       if(it==lands.end())
diff --git a/components/esm_store/store.hpp b/components/esm_store/store.hpp
index e3bbf9e82..83cd5ab16 100644
--- a/components/esm_store/store.hpp
+++ b/components/esm_store/store.hpp
@@ -115,7 +115,7 @@ namespace ESMS
       recLists[REC_GLOB] = &globals;
       recLists[REC_GMST] = &gameSettings;
       recLists[REC_INGR] = &ingreds;
-      //recLists[REC_LAND] = &lands;
+      recLists[REC_LAND] = &lands;
       recLists[REC_LEVC] = &creatureLists;
       recLists[REC_LEVI] = &itemLists;
       recLists[REC_LIGH] = &lights;
diff --git a/files/plugins.cfg.linux b/files/plugins.cfg.linux
index b6e104351..2921153b4 100644
--- a/files/plugins.cfg.linux
+++ b/files/plugins.cfg.linux
@@ -7,6 +7,6 @@ PluginFolder=${OGRE_PLUGIN_DIR}
 Plugin=RenderSystem_GL
 Plugin=Plugin_ParticleFX
 Plugin=Plugin_OctreeSceneManager
-# Plugin=Plugin_CgProgramManager
+Plugin=Plugin_CgProgramManager
 
 
diff --git a/files/plugins.cfg.mac b/files/plugins.cfg.mac
index baaca4479..0c16bddaf 100644
--- a/files/plugins.cfg.mac
+++ b/files/plugins.cfg.mac
@@ -7,6 +7,6 @@ PluginFolder=
 Plugin=RenderSystem_GL.dylib
 Plugin=Plugin_ParticleFX.dylib
 Plugin=Plugin_OctreeSceneManager.dylib
-# Plugin=Plugin_CgProgramManager
+Plugin=Plugin_CgProgramManager