diff --git a/ChangeLog b/ChangeLog
index efb772d..c7ffe33 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,7 @@
+Jun 6, 2007
+
+  * FIXED: give error on bad entities in XML mode.
+
 Feb 6, 2007
 
   * MODIFIED: xml_quote_attribute no longer maps ' to '  See note in
diff --git a/Test/badxmlent.xml b/Test/badxmlent.xml
new file mode 100644
index 0000000..c25d3fc
--- /dev/null
+++ b/Test/badxmlent.xml
@@ -0,0 +1,5 @@
+<?xml version="1.0">
+
+<test a="John & Mary">
+   John & Mary
+</test>
diff --git a/Test/ok/badxmlent.ok b/Test/ok/badxmlent.ok
new file mode 100644
index 0000000..66de8fb
--- /dev/null
+++ b/Test/ok/badxmlent.ok
@@ -0,0 +1,2 @@
+[element(test, [a='John & Mary'], ['\n   John & Mary\n'])].
+[sgml(sgml_parser(1949540), 'badxmlent.xml', 3, 'Syntax error: Illegal entity, found "& Mary""'), sgml(sgml_parser(1949540), 'badxmlent.xml', 4, 'Syntax error: Illegal entity, found "& "')].
diff --git a/parser.c b/parser.c
index d5c4840..71d16a6 100644
--- a/parser.c
+++ b/parser.c
@@ -596,6 +596,9 @@ expand_entities(dtd_parser *p, const ichar *in, int len, ocharbuf *out)
 
 	continue;
       }
+
+      if ( dtd->dialect != DL_SGML )
+	gripe(ERC_SYNTAX_ERROR, L"Illegal entity", in);
     }
 
   recover:
@@ -4867,7 +4870,15 @@ putchar_dtd_parser(dtd_parser *p, int chr)
 	add_icharbuf(p->buffer, chr);
 	p->state = S_ENT;
       } else
-      { add_cdata(p, f[CF_ERO]);
+      {	if ( dtd->dialect != DL_SGML )
+	{ wchar_t buf[3];
+	  buf[0] = '&';
+	  buf[1] = chr;
+	  buf[2] = '\0';
+	  gripe(ERC_SYNTAX_ERROR, L"Illegal entity", buf);
+	}
+
+	add_cdata(p, f[CF_ERO]);
 	p->state = p->cdata_state;
 	goto reprocess;
       }