diff --git a/kitty/data_types.py b/kitty/data_types.py
index 4a13cfa81..299b2fe48 100644
--- a/kitty/data_types.py
+++ b/kitty/data_types.py
@@ -27,7 +27,7 @@ get_zeroes.current_size = None
 
 class Cursor:
 
-    __slots__ = ("x", "y", 'shape', 'blink', "hidden", 'fg', 'bg', 'bold', 'italic', 'reverse', 'strikethrough', 'decoration', 'decoration_fg',)
+    __slots__ = ("x", "y", 'shape', 'blink', "hidden", 'color', 'fg', 'bg', 'bold', 'italic', 'reverse', 'strikethrough', 'decoration', 'decoration_fg',)
 
     def __init__(self, x: int=0, y: int=0):
         self.x = x
@@ -35,6 +35,7 @@ class Cursor:
         self.hidden = False
         self.shape = None
         self.blink = None
+        self.color = None
         self.reset_display_attrs()
 
     def reset_display_attrs(self):
diff --git a/kitty/screen.py b/kitty/screen.py
index d9b26800f..e7fd0e8ce 100644
--- a/kitty/screen.py
+++ b/kitty/screen.py
@@ -982,6 +982,15 @@ class Screen(QObject):
         else:  # DECLL
             pass
 
+    def set_cursor_color(self, color_name):
+        try:
+            color_name = color_name.decode('utf-8') if color_name else None
+        except Exception:
+            return
+        old, self.cursor.color = self.cursor.color, color_name
+        if old != self.cursor.color:
+            self.cursor_changed(self.cursor)
+
     def normal_keypad_mode(self):
         pass  # Useless for us, since Qt takes care of handling the numpad
 
diff --git a/kitty/term.py b/kitty/term.py
index 642cb6433..5adfeb41a 100644
--- a/kitty/term.py
+++ b/kitty/term.py
@@ -195,6 +195,11 @@ class TerminalWidget(QWidget):
         r = QRect(self.cell_positions[x], self.line_positions[y], self.cell_width, self.cell_height)
         self.last_drew_cursor_at = x, y
         cc = self.cursor_color
+        if self.cursor.color:
+            q = QColor(self.cursor.color)
+            if q.isValid():
+                cc = q
+                cc.setAlphaF(self.opts.cursor_opacity)
 
         def width(w=2, vert=True):
             dpi = self.logicalDpiX() if vert else self.logicalDpiY()
diff --git a/pyte/streams.py b/pyte/streams.py
index 77b469c1d..6ee6f8995 100644
--- a/pyte/streams.py
+++ b/pyte/streams.py
@@ -127,7 +127,7 @@ class Stream(object):
     events = frozenset(itertools.chain(
         basic.values(), escape.values(), sharp.values(), csi.values(),
         ["define_charset", "select_other_charset"],
-        ["set_icon", "set_title"],  # OSC.
+        ["set_icon", "set_title", 'set_cursor_color'],  # OSC.
         ["draw", "debug"]))
 
     #: A regular expression pattern matching everything what can be
@@ -321,20 +321,31 @@ class Stream(object):
                                     csi_dispatch[char](*params)
                             break  # CSI is finished.
             elif char == OSC:
-                code = yield
-                param = bytearray()
+                code = bytearray()
                 while True:
                     char = yield
-                    if char == ST or char == ctrl.BEL:
+                    if char == ST or char == ctrl.BEL or char == b';':
                         break
-                    else:
-                        param.extend(char)
+                    code.extend(char)
+                code = bytes(code)
+                param = bytearray()
+                if char == b';':
+                    while True:
+                        char = yield
+                        if char == ST or char == ctrl.BEL:
+                            break
+                        else:
+                            param.extend(char)
 
-                param = bytes(param[1:])  # Drop the ;.
+                param = bytes(param)
                 if code in b"01":
                     listener.set_icon_name(param)
                 if code in b"02":
                     listener.set_title(param)
+                elif code == b"12":
+                    listener.set_cursor_color(param)
+                elif code == b"112":
+                    listener.set_cursor_color(b'')
             elif char == DCS:
                 # See http://invisible-island.net/xterm/ctlseqs/ctlseqs.html#h2-Device-Control-functions
                 code = yield