diff --git a/apps/openmw/mwmechanics/character.cpp b/apps/openmw/mwmechanics/character.cpp
index 711feb4a61..5310dfdbbc 100644
--- a/apps/openmw/mwmechanics/character.cpp
+++ b/apps/openmw/mwmechanics/character.cpp
@@ -1533,6 +1533,9 @@ void CharacterController::update(float duration)
 
     updateMagicEffects();
 
+    if(mAnimQueue.size() > 1 && (mAnimation->getLoopingEnabled(mAnimQueue.front().mGroup) == true))
+        mAnimation->setLoopingEnabled(mAnimQueue.front().mGroup, false);
+
     if(!cls.isActor())
     {
         if(mAnimQueue.size() > 1)
@@ -2009,8 +2012,26 @@ bool CharacterController::playGroup(const std::string &groupname, int mode, int
     }
     else
     {
-        if (!mAnimQueue.empty() && mAnimQueue.front().mGroup == groupname && isAnimPlaying(mAnimQueue.front().mGroup))
-            return true;
+        // If the given animation is a looped animation, is already playing
+        // and has not yet reached its Loop Stop key, make it the only animation
+        // in the queue, and retain the loop count from the animation that was
+        // already playing. This emulates observed behavior from the original
+        // engine and allows banners to animate correctly.
+        if (!mAnimQueue.empty() && mAnimQueue.front().mGroup == groupname &&
+            mAnimation->getTextKeyTime(mAnimQueue.front().mGroup+": loop start") >= 0)
+        {
+            float endOfLoop = mAnimation->getTextKeyTime(mAnimQueue.front().mGroup+": loop stop");
+
+            if (endOfLoop < 0) // if no Loop Stop key was found, use the Stop key
+                endOfLoop = mAnimation->getTextKeyTime(mAnimQueue.front().mGroup+": stop");
+
+            if (endOfLoop > 0 && (mAnimation->getCurrentTime(mAnimQueue.front().mGroup) < endOfLoop))
+            {
+                mAnimation->setLoopingEnabled(mAnimQueue.front().mGroup, true);
+                mAnimQueue.resize(1);                    
+                return true;
+            }
+        }
 
         count = std::max(count, 1);
 
@@ -2035,8 +2056,6 @@ bool CharacterController::playGroup(const std::string &groupname, int mode, int
         }
         else if(mode == 0)
         {
-            if (!mAnimQueue.empty())
-                mAnimation->stopLooping(mAnimQueue.front().mGroup);
             mAnimQueue.resize(1);
             mAnimQueue.push_back(entry);
         }
diff --git a/apps/openmw/mwrender/animation.cpp b/apps/openmw/mwrender/animation.cpp
index e5614f3f8f..03370e7f83 100644
--- a/apps/openmw/mwrender/animation.cpp
+++ b/apps/openmw/mwrender/animation.cpp
@@ -1023,50 +1023,54 @@ namespace MWRender
             {
                 float targetTime;
 
-                if(state.getTime() >= state.mLoopStopTime && state.mLoopCount > 0)
-                    goto handle_loop;
-
-                targetTime = state.getTime() + timepassed;
-                if(textkey == textkeys.end() || textkey->first > targetTime)
+                if (state.getTime() < state.mLoopStopTime || state.mLoopCount == 0)
                 {
-                    if(mAccumCtrl && state.mTime == mAnimationTimePtr[0]->getTimePtr())
-                        updatePosition(state.getTime(), targetTime, movement);
-                    state.setTime(std::min(targetTime, state.mStopTime));
-                }
-                else
-                {
-                    if(mAccumCtrl && state.mTime == mAnimationTimePtr[0]->getTimePtr())
-                        updatePosition(state.getTime(), textkey->first, movement);
-                    state.setTime(textkey->first);
-                }
+                    targetTime = state.getTime() + timepassed;
+                    if(textkey == textkeys.end() || textkey->first > targetTime)
+                    {
+                        if(mAccumCtrl && state.mTime == mAnimationTimePtr[0]->getTimePtr())
+                            updatePosition(state.getTime(), targetTime, movement);
+                        state.setTime(std::min(targetTime, state.mStopTime));
+                    }
+                    else
+                    {
+                        if(mAccumCtrl && state.mTime == mAnimationTimePtr[0]->getTimePtr())
+                            updatePosition(state.getTime(), textkey->first, movement);
+                        state.setTime(textkey->first);
+                    }
 
-                state.mPlaying = (state.getTime() < state.mStopTime);
-                timepassed = targetTime - state.getTime();
+                    state.mPlaying = (state.getTime() < state.mStopTime);
+                    timepassed = targetTime - state.getTime();
 
-                while(textkey != textkeys.end() && textkey->first <= state.getTime())
-                {
-                    handleTextKey(state, stateiter->first, textkey, textkeys);
-                    ++textkey;
-                }
-
-                if(state.getTime() >= state.mLoopStopTime && state.mLoopCount > 0)
-                {
-                handle_loop:
-                    state.mLoopCount--;
-                    state.setTime(state.mLoopStartTime);
-                    state.mPlaying = true;
-
-                    textkey = textkeys.lower_bound(state.getTime());
                     while(textkey != textkeys.end() && textkey->first <= state.getTime())
                     {
                         handleTextKey(state, stateiter->first, textkey, textkeys);
                         ++textkey;
                     }
-
-                    if(state.getTime() >= state.mLoopStopTime)
-                        break;
                 }
 
+                if(state.getTime() >= state.mLoopStopTime)
+                {
+                    if (!state.mLoopingEnabled)
+                        state.mLoopCount = 0;
+                    else if (state.mLoopCount > 0)
+                    {
+                        state.mLoopCount--;
+                        state.setTime(state.mLoopStartTime);
+                        state.mPlaying = true;
+
+                        textkey = textkeys.lower_bound(state.getTime());
+                        while(textkey != textkeys.end() && textkey->first <= state.getTime())
+                        {
+                            handleTextKey(state, stateiter->first, textkey, textkeys);
+                            ++textkey;
+                        }
+
+                        if(state.getTime() >= state.mLoopStopTime)
+                            break;
+                    }
+                } 
+
                 if(timepassed <= 0.0f)
                     break;
             }
@@ -1095,6 +1099,21 @@ namespace MWRender
         return movement;
     }
 
+    void Animation::setLoopingEnabled(const std::string &groupname, bool enabled)
+    {
+        AnimStateMap::iterator state(mStates.find(groupname));
+        if(state != mStates.end())
+            state->second.mLoopingEnabled = enabled;
+    }
+
+    bool Animation::getLoopingEnabled(const std::string &groupname) const
+    {
+        AnimStateMap::const_iterator state(mStates.find(groupname));
+        if(state != mStates.end())
+            return state->second.mLoopingEnabled;
+        return false;
+    }
+
     void Animation::setObjectRoot(const std::string &model, bool forceskeleton, bool baseonly, bool isCreature)
     {
         osg::ref_ptr<osg::StateSet> previousStateset;
diff --git a/apps/openmw/mwrender/animation.hpp b/apps/openmw/mwrender/animation.hpp
index a837a26aeb..2eb857cbd0 100644
--- a/apps/openmw/mwrender/animation.hpp
+++ b/apps/openmw/mwrender/animation.hpp
@@ -183,6 +183,7 @@ protected:
         float mSpeedMult;
 
         bool mPlaying;
+        bool mLoopingEnabled;
         size_t mLoopCount;
 
         AnimPriority mPriority;
@@ -190,8 +191,8 @@ protected:
         bool mAutoDisable;
 
         AnimState() : mStartTime(0.0f), mLoopStartTime(0.0f), mLoopStopTime(0.0f), mStopTime(0.0f),
-                      mTime(new float), mSpeedMult(1.0f), mPlaying(false), mLoopCount(0),
-                      mPriority(0), mBlendMask(0), mAutoDisable(true)
+                      mTime(new float), mSpeedMult(1.0f), mPlaying(false), mLoopingEnabled(true),
+                      mLoopCount(0), mPriority(0), mBlendMask(0), mAutoDisable(true)
         {
         }
         ~AnimState();
@@ -432,6 +433,10 @@ public:
 
     virtual osg::Vec3f runAnimation(float duration);
 
+    void setLoopingEnabled(const std::string &groupname, bool enabled);
+
+    bool getLoopingEnabled(const std::string &groupname) const;
+
     /// This is typically called as part of runAnimation, but may be called manually if needed.
     void updateEffects(float duration);