diff -r b1b35583967a Lib/idlelib/ReplaceDialog.py
--- a/Lib/idlelib/ReplaceDialog.py	Thu Dec 22 09:10:47 2011 +0200
+++ b/Lib/idlelib/ReplaceDialog.py	Thu Dec 22 18:12:59 2011 -0600
@@ -2,6 +2,7 @@
 
 from idlelib import SearchEngine
 from idlelib.SearchDialogBase import SearchDialogBase
+import re
 
 def replace(text):
     root = text._root()
@@ -55,8 +56,25 @@
 
     def default_command(self, event=None):
         if self.do_find(self.ok):
-            self.do_replace()
-            self.do_find(0)
+            if self.do_replace():   # Only find next match if replace succeeded.
+                                    # A bad re can cause a it to fail.
+                self.do_find(0)
+
+
+    def _replace_expand(self, m, repl):
+        """ Helper function for expanding a regular expression
+            in the replace field, if needed. """
+        
+        if self.engine.isre():
+            try:
+                new = m.expand(repl)
+            except re.error:
+                self.engine.report_error(repl, 'Invalid Replace Expression')
+                new = None
+        else:
+            new = repl
+
+        return new
 
     def replace_all(self, event=None):
         prog = self.engine.getprog()
@@ -86,7 +104,9 @@
             line, m = res
             chars = text.get("%d.0" % line, "%d.0" % (line+1))
             orig = m.group()
-            new = m.expand(repl)
+            new = self._replace_expand(m,repl)
+            if new is None:
+                break
             i, j = m.span()
             first = "%d.%d" % (line, i)
             last = "%d.%d" % (line, j)
@@ -103,7 +123,6 @@
         text.undo_block_stop()
         if first and last:
             self.show_hit(first, last)
-        self.close()
 
     def do_find(self, ok=0):
         if not self.engine.getprog():
@@ -138,7 +157,9 @@
         m = prog.match(chars, col)
         if not prog:
             return False
-        new = m.expand(self.replvar.get())
+        new = self._replace_expand(m, self.replvar.get())
+        if new is None:
+            return False
         text.mark_set("insert", first)
         text.undo_block_start()
         if m.group():