diff --git a/src/apps/terminal/BasicTerminalBuffer.cpp b/src/apps/terminal/BasicTerminalBuffer.cpp
index 06dfd6cad5..a971e89ca6 100644
--- a/src/apps/terminal/BasicTerminalBuffer.cpp
+++ b/src/apps/terminal/BasicTerminalBuffer.cpp
@@ -113,7 +113,7 @@ BasicTerminalBuffer::BasicTerminalBuffer()
 	fScreen(NULL),
 	fScreenOffset(0),
 	fHistory(NULL),
-	fAttributes(0),
+	fAttributes(),
 	fSoftWrappedCursor(false),
 	fOverwriteMode(false),
 	fAlternateScreenActive(false),
@@ -287,13 +287,13 @@ BasicTerminalBuffer::IsFullWidthChar(int32 row, int32 column) const
 	TerminalLine* lineBuffer = ALLOC_LINE_ON_STACK(fWidth);
 	TerminalLine* line = _HistoryLineAt(row, lineBuffer);
 	return line != NULL && column > 0 && column < line->length
-		&& (line->cells[column - 1].attributes & A_WIDTH) != 0;
+		&& line->cells[column - 1].attributes.IsWidth();
 }
 
 
 int
 BasicTerminalBuffer::GetChar(int32 row, int32 column, UTF8Char& character,
-	uint32& attributes) const
+	Attributes& attributes) const
 {
 	TerminalLine* lineBuffer = ALLOC_LINE_ON_STACK(fWidth);
 	TerminalLine* line = _HistoryLineAt(row, lineBuffer);
@@ -303,7 +303,7 @@ BasicTerminalBuffer::GetChar(int32 row, int32 column, UTF8Char& character,
 	if (column < 0 || column >= line->length)
 		return NO_CHAR;
 
-	if (column > 0 && (line->cells[column - 1].attributes & A_WIDTH) != 0)
+	if (column > 0 && line->cells[column - 1].attributes.IsWidth())
 		return IN_STRING;
 
 	TerminalCell& cell = line->cells[column];
@@ -315,7 +315,7 @@ BasicTerminalBuffer::GetChar(int32 row, int32 column, UTF8Char& character,
 
 void
 BasicTerminalBuffer::GetCellAttributes(int32 row, int32 column,
-	uint32& attributes, uint32& count) const
+	Attributes& attributes, uint32& count) const
 {
 	count = 0;
 	TerminalLine* lineBuffer = ALLOC_LINE_ON_STACK(fWidth);
@@ -336,7 +336,7 @@ BasicTerminalBuffer::GetCellAttributes(int32 row, int32 column,
 
 int32
 BasicTerminalBuffer::GetString(int32 row, int32 firstColumn, int32 lastColumn,
-	char* buffer, uint32& attributes) const
+	char* buffer, Attributes& attributes) const
 {
 	TerminalLine* lineBuffer = ALLOC_LINE_ON_STACK(fWidth);
 	TerminalLine* line = _HistoryLineAt(row, lineBuffer);
@@ -419,7 +419,7 @@ BasicTerminalBuffer::FindWord(const TermPos& pos,
 		return true;
 	}
 
-	if (x > 0 && IS_WIDTH(line->cells[x - 1].attributes))
+	if (x > 0 && line->cells[x - 1].attributes.IsWidth())
 		x--;
 
 	// get the char type at the given position
@@ -431,7 +431,7 @@ BasicTerminalBuffer::FindWord(const TermPos& pos,
 
 	// find the beginning
 	TermPos start(x, y);
-	TermPos end(x + (IS_WIDTH(line->cells[x].attributes)
+	TermPos end(x + (line->cells[x].attributes.IsWidth()
 				? FULL_WIDTH : HALF_WIDTH), y);
 	for (;;) {
 		TermPos previousPos = start;
@@ -455,7 +455,7 @@ BasicTerminalBuffer::FindWord(const TermPos& pos,
 		if (classifier->Classify(line->cells[nextPos.x].character) != type)
 			break;
 
-		nextPos.x += IS_WIDTH(line->cells[nextPos.x].attributes)
+		nextPos.x += line->cells[nextPos.x].attributes.IsWidth()
 			? FULL_WIDTH : HALF_WIDTH;
 		end = nextPos;
 	}
@@ -489,7 +489,7 @@ BasicTerminalBuffer::NextLinePos(TermPos& pos, bool normalize) const
 	if (!_NormalizeLinePos(lineBuffer, line, pos))
 		return false;
 
-	pos.x += IS_WIDTH(line->cells[pos.x].attributes) ? FULL_WIDTH : HALF_WIDTH;
+	pos.x += line->cells[pos.x].attributes.IsWidth() ? FULL_WIDTH : HALF_WIDTH;
 	return !normalize || _NormalizeLinePos(lineBuffer, line, pos);
 }
 
@@ -503,12 +503,15 @@ BasicTerminalBuffer::LineLength(int32 index) const
 }
 
 
-int32
-BasicTerminalBuffer::GetLineColor(int32 index) const
+void
+BasicTerminalBuffer::GetLineColor(int32 index, Attributes& attr) const
 {
 	TerminalLine* lineBuffer = ALLOC_LINE_ON_STACK(fWidth);
 	TerminalLine* line = _HistoryLineAt(index, lineBuffer);
-	return line != NULL ? line->attributes : 0;
+	if (line != NULL)
+		attr = line->attributes;
+	else
+		attr.Reset();
 }
 
 
@@ -641,8 +644,8 @@ BasicTerminalBuffer::InsertChar(UTF8Char c)
 
 	TerminalLine* line = _LineAt(fCursor.y);
 	line->cells[fCursor.x].character = c;
-	line->cells[fCursor.x].attributes
-		= fAttributes | (width == FULL_WIDTH ? A_WIDTH : 0);
+	line->cells[fCursor.x].attributes = fAttributes;
+	line->cells[fCursor.x].attributes.state |= (width == FULL_WIDTH ? A_WIDTH : 0);
 
 	if (line->length < fCursor.x + width)
 		line->length = fCursor.x + width;
@@ -662,7 +665,7 @@ BasicTerminalBuffer::InsertChar(UTF8Char c)
 
 
 void
-BasicTerminalBuffer::FillScreen(UTF8Char c, uint32 attributes)
+BasicTerminalBuffer::FillScreen(UTF8Char c, Attributes &attributes)
 {
 	uint32 width = HALF_WIDTH;
 	if (c.IsFullWidth()) {
@@ -838,9 +841,9 @@ BasicTerminalBuffer::EraseCharsFrom(int32 first, int32 numChars)
 	fSoftWrappedCursor = false;
 
 	end = min_c(first + numChars, line->length);
-	if (first > 0 && IS_WIDTH(line->cells[first - 1].attributes))
+	if (first > 0 && line->cells[first - 1].attributes.IsWidth())
 		first--;
-	if (end > 0 && IS_WIDTH(line->cells[end - 1].attributes))
+	if (end > 0 && line->cells[end - 1].attributes.IsWidth())
 		end++;
 
 	for (int32 i = first; i < end; i++) {
@@ -865,7 +868,7 @@ BasicTerminalBuffer::EraseAbove()
 	TerminalLine* line = _LineAt(fCursor.y);
 	if (fCursor.x < line->length) {
 		int32 to = fCursor.x;
-		if (IS_WIDTH(line->cells[fCursor.x].attributes))
+		if (line->cells[fCursor.x].attributes.IsWidth())
 			to++;
 		for (int32 i = 0; i <= to; i++) {
 			line->cells[i].attributes = fAttributes;
@@ -1090,7 +1093,7 @@ BasicTerminalBuffer::_AllocateLines(int32 width, int32 count)
 			_FreeLines(lines, i);
 			return NULL;
 		}
-		lines[i]->Clear(0, width);
+		lines[i]->Clear(width);
 	}
 
 	return lines;
@@ -1337,8 +1340,7 @@ BasicTerminalBuffer::_ResizeRewrap(int32 width, int32 height,
 		int32 toCopy = min_c(sourceLeft, destLeft);
 		// If the last cell to copy is the first cell of a
 		// full-width char, don't copy it yet.
-		if (toCopy > 0 && IS_WIDTH(
-				sourceLine->cells[sourceX + toCopy - 1].attributes)) {
+		if (toCopy > 0 && sourceLine->cells[sourceX + toCopy - 1].attributes.IsWidth()) {
 //debug_printf("      -> last char is full-width -- don't copy it\n");
 			toCopy--;
 		}
@@ -1620,7 +1622,7 @@ BasicTerminalBuffer::_TruncateLine(TerminalLine* line, int32 length)
 	if (line->length <= length)
 		return;
 
-	if (length > 0 && IS_WIDTH(line->cells[length - 1].attributes))
+	if (length > 0 && line->cells[length - 1].attributes.IsWidth())
 		length--;
 
 	line->length = length;
@@ -1661,7 +1663,7 @@ BasicTerminalBuffer::_GetPartialLineString(BString& string, int32 row,
 		const TerminalCell& cell = line->cells[x];
 		string.Append(cell.character.bytes, cell.character.ByteCount());
 
-		if (IS_WIDTH(cell.attributes))
+		if (cell.attributes.IsWidth())
 			x++;
 	}
 
@@ -1745,7 +1747,7 @@ BasicTerminalBuffer::_PreviousLinePos(TerminalLine* lineBuffer,
 		}
 		pos.x = line->length - 1;
 	}
-	if (pos.x > 0 && IS_WIDTH(line->cells[pos.x - 1].attributes))
+	if (pos.x > 0 && line->cells[pos.x - 1].attributes.IsWidth())
 		pos.x--;
 
 	return true;
@@ -1805,7 +1807,7 @@ BasicTerminalBuffer::MakeLinesSnapshots(time_t timeStamp, const char* fileName)
 			}
 
 			fprintf(fileOut, "%02" B_PRId16 ":%02" B_PRId16 ":%08" B_PRIx32 ":\n",
-					i, line->length, line->attributes);
+					i, line->length, line->attributes.state);
 			for (int j = 0; j < line->length; j++)
 				if (line->cells[j].character.bytes[0] != 0)
 					fwrite(line->cells[j].character.bytes, 1,
@@ -1815,7 +1817,7 @@ BasicTerminalBuffer::MakeLinesSnapshots(time_t timeStamp, const char* fileName)
 			for (int s = 28; s >= 0; s -= 4) {
 				for (int j = 0; j < fWidth; j++)
 					fprintf(fileOut, "%01" B_PRIx32,
-						(line->cells[j].attributes >> s) & 0x0F);
+						(line->cells[j].attributes.state >> s) & 0x0F);
 
 				fprintf(fileOut, "\n");
 			}
diff --git a/src/apps/terminal/BasicTerminalBuffer.h b/src/apps/terminal/BasicTerminalBuffer.h
index 418f014a1c..0ae54054e7 100644
--- a/src/apps/terminal/BasicTerminalBuffer.h
+++ b/src/apps/terminal/BasicTerminalBuffer.h
@@ -91,12 +91,12 @@ public:
 			bool				IsFullWidthChar(int32 row, int32 column) const;
 			int					GetChar(int32 row, int32 column,
 									UTF8Char& character,
-									uint32& attributes) const;
+									Attributes& attributes) const;
 			void				GetCellAttributes(int32 row, int32 column,
-									uint32& attributes, uint32& count) const;
+									Attributes& attributes, uint32& count) const;
 			int32				GetString(int32 row, int32 firstColumn,
 									int32 lastColumn, char* buffer,
-									uint32& attributes) const;
+									Attributes& attributes) const;
 			void				GetStringFromRegion(BString& string,
 									const TermPos& start,
 									const TermPos& end) const;
@@ -105,7 +105,7 @@ public:
 									bool findNonWords, TermPos& start,
 									TermPos& end) const;
 			int32				LineLength(int32 index) const;
-			int32				GetLineColor(int32 index) const;
+			void				GetLineColor(int32 index, Attributes& attr) const;
 
 			bool				PreviousLinePos(TermPos& pos) const;
 			bool				NextLinePos(TermPos& pos, bool normalize) const;
@@ -120,8 +120,8 @@ public:
 									bool matchWord, TermPos& matchStart,
 									TermPos& matchEnd) const;
 
-	inline	uint32				GetAttributes();
-	inline	void				SetAttributes(uint32 attributes);
+	inline	Attributes			GetAttributes();
+	inline	void				SetAttributes(const Attributes& attributes);
 
 			// snapshots and data capture for debugging
 			void				MakeLinesSnapshots(time_t timeStamp,
@@ -131,7 +131,7 @@ public:
 
 			// insert chars/lines
 			void				InsertChar(UTF8Char c);
-			void				FillScreen(UTF8Char c, uint32 attr);
+			void				FillScreen(UTF8Char c, Attributes &attr);
 
 			void				InsertCR();
 			void				InsertLF();
@@ -235,7 +235,7 @@ protected:
 			int32				fScreenOffset;	// index of screen line 0
 			HistoryBuffer*		fHistory;
 
-			uint32				fAttributes;
+			Attributes			fAttributes;
 
 			// cursor position (origin: (0, 0))
 			TermPos				fCursor;
@@ -272,7 +272,7 @@ BasicTerminalBuffer::HistoryCapacity() const
 }
 
 
-uint32
+Attributes
 BasicTerminalBuffer::GetAttributes()
 {
 	return fAttributes;
@@ -280,7 +280,7 @@ BasicTerminalBuffer::GetAttributes()
 
 
 void
-BasicTerminalBuffer::SetAttributes(uint32 attributes)
+BasicTerminalBuffer::SetAttributes(const Attributes& attributes)
 {
 	fAttributes = attributes;
 }
diff --git a/src/apps/terminal/HistoryBuffer.cpp b/src/apps/terminal/HistoryBuffer.cpp
index ada86f5deb..2a85e4823c 100644
--- a/src/apps/terminal/HistoryBuffer.cpp
+++ b/src/apps/terminal/HistoryBuffer.cpp
@@ -84,7 +84,7 @@ HistoryBuffer::GetTerminalLineAt(int32 index, TerminalLine* buffer) const
 	int32 charCount = 0;
 	const char* chars = line->Chars();
 	buffer->length = 0;
-	uint32 attributes = 0;
+	Attributes attributes;
 	AttributesRun* attributesRun = line->AttributesRuns();
 	int32 attributesRunCount = line->attributesRunCount;
 	int32 nextAttributesAt = attributesRunCount > 0
@@ -95,7 +95,7 @@ HistoryBuffer::GetTerminalLineAt(int32 index, TerminalLine* buffer) const
 		if (charCount == nextAttributesAt) {
 			if (charCount < attributesRun->offset) {
 				// the "hole" in attributes run
-				attributes = 0;
+				attributes.Reset();
 				nextAttributesAt = attributesRun->offset;
 			} else if (attributesRunCount > 0) {
 				attributes = attributesRun->attributes;
@@ -104,7 +104,7 @@ HistoryBuffer::GetTerminalLineAt(int32 index, TerminalLine* buffer) const
 				attributesRun++;
 				attributesRunCount--;
 			} else {
-				attributes = 0;
+				attributes.Reset();
 				nextAttributesAt = INT_MAX;
 			}
 		}
@@ -120,10 +120,10 @@ HistoryBuffer::GetTerminalLineAt(int32 index, TerminalLine* buffer) const
 
 		// full width char?
 		if (cell.character.IsFullWidth()) {
-			cell.attributes |= A_WIDTH;
+			cell.attributes.state |= A_WIDTH;
 			// attributes of the second, "invisible" cell must be
 			// cleared to let full-width chars detection work properly
-			buffer->cells[charCount++].attributes = 0;
+			buffer->cells[charCount++].attributes.Reset();
 		}
 	}
 
@@ -140,18 +140,18 @@ HistoryBuffer::AddLine(const TerminalLine* line)
 {
 //debug_printf("HistoryBuffer::AddLine(%p): length: %d\n", line, line->length);
 	// determine the amount of memory we need for the line
-	uint32 attributes = 0;
+	Attributes attributes;
 	int32 attributesRuns = 0;
 	int32 byteLength = 0;
 	for (int32 i = 0; i < line->length; i++) {
 		const TerminalCell& cell = line->cells[i];
 		byteLength += cell.character.ByteCount();
-		if ((cell.attributes & CHAR_ATTRIBUTES) != attributes) {
-			attributes = cell.attributes & CHAR_ATTRIBUTES;
-			if (attributes != 0)
+		if ((cell.attributes.state & CHAR_ATTRIBUTES) != attributes.state) {
+			attributes.state = cell.attributes.state & CHAR_ATTRIBUTES;
+			if (attributes.state != 0)
 				attributesRuns++;
 		}
-		if (IS_WIDTH(cell.attributes))
+		if (cell.attributes.IsWidth())
 			i++;
 	}
 
@@ -160,7 +160,7 @@ HistoryBuffer::AddLine(const TerminalLine* line)
 	// allocate and translate the line
 	HistoryLine* historyLine = _AllocateLine(attributesRuns, byteLength);
 
-	attributes = 0;
+	attributes.Reset();
 	AttributesRun* attributesRun = historyLine->AttributesRuns();
 
 	char* chars = historyLine->Chars();
@@ -173,28 +173,28 @@ HistoryBuffer::AddLine(const TerminalLine* line)
 		chars += charLength;
 
 		// deal with attributes
-		if ((cell.attributes & CHAR_ATTRIBUTES) != attributes) {
+		if ((cell.attributes.state & CHAR_ATTRIBUTES) != attributes.state) {
 			// terminate the previous attributes run
-			if (attributes != 0) {
+			if (attributes.state != 0) {
 				attributesRun->length = i - attributesRun->offset;
 				attributesRun++;
 			}
 
-			attributes = cell.attributes & CHAR_ATTRIBUTES;
+			attributes.state = cell.attributes.state & CHAR_ATTRIBUTES;
 
 			// init the new one
-			if (attributes != 0) {
+			if (attributes.state != 0) {
 				attributesRun->attributes = attributes;
 				attributesRun->offset = i;
 			}
 		}
 
-		if (IS_WIDTH(cell.attributes))
+		if (cell.attributes.IsWidth())
 			i++;
 	}
 
 	// set the last attributes run's length
-	if (attributes != 0)
+	if (attributes.state != 0)
 		attributesRun->length = line->length - attributesRun->offset;
 
 	historyLine->softBreak = line->softBreak;
diff --git a/src/apps/terminal/Shell.cpp b/src/apps/terminal/Shell.cpp
index a35b652d73..2da3406f12 100644
--- a/src/apps/terminal/Shell.cpp
+++ b/src/apps/terminal/Shell.cpp
@@ -74,7 +74,7 @@
 
 // TODO: should extract from /etc/passwd instead???
 const char *kDefaultShell = "/bin/sh";
-const char *kTerminalType = "xterm-256color";
+const char *kTerminalType = "xterm";
 
 /*
  * Set environment variable.
diff --git a/src/apps/terminal/TermConst.h b/src/apps/terminal/TermConst.h
index 8f56b22785..6903a945bb 100644
--- a/src/apps/terminal/TermConst.h
+++ b/src/apps/terminal/TermConst.h
@@ -206,18 +206,6 @@ enum {
 #define BACKCOLOR		0xFF000000
 #define CHAR_ATTRIBUTES	0xFFFF7700
 
-#define IS_WIDTH(x)	(((x) & A_WIDTH)   )
-#define IS_BOLD(x)	(((x) & BOLD)      )
-#define IS_UNDER(x)	(((x) & UNDERLINE) )
-#define IS_INVERSE(x)	(((x) & INVERSE)   )
-#define IS_MOUSE(x)	(((x) & MOUSE)     )
-#define IS_FORESET(x)	(((x) & FORESET)   )
-#define IS_BACKSET(x)	(((x) & BACKSET)   )
-#define IS_FONT(x)	(((x) & FONT)      )
-#define IS_CR(x)	(((x) & DUMPCR)	   )
-#define IS_FORECOLOR(x) (((x) & FORECOLOR) >> 16)
-#define IS_BACKCOLOR(x) (((x) & BACKCOLOR) >> 24)
-
 #define FORECOLORED(x) ((x) << 16)
 #define BACKCOLORED(x) ((x) << 24)
 
diff --git a/src/apps/terminal/TermParse.cpp b/src/apps/terminal/TermParse.cpp
index 4e1a291a65..c99e7c1726 100644
--- a/src/apps/terminal/TermParse.cpp
+++ b/src/apps/terminal/TermParse.cpp
@@ -781,12 +781,12 @@ TermParse::EscParse()
 				case CASE_SGR:
 				{
 					/* SGR */
-					uint32 attributes = fBuffer->GetAttributes();
+					Attributes attributes = fBuffer->GetAttributes();
 					for (row = 0; row < nparam; ++row) {
 						switch (param[row]) {
 							case DEFAULT:
 							case 0: /* Reset attribute */
-								attributes = 0;
+								attributes.Reset();
 								break;
 
 							case 1: /* Bold     */
@@ -831,32 +831,22 @@ TermParse::EscParse()
 							case 35:
 							case 36:
 							case 37:
-								attributes &= ~FORECOLOR;
-								attributes |= FORECOLORED(param[row] - 30);
-								attributes |= FORESET;
+								attributes.SetIndexedForeground(param[row] - 30);
 								break;
 
 							case 38:
 							{
-								int color = -1;
 								if (nparam == 3 && param[1] == 5)
-									color = param[2];
+									attributes.SetIndexedForeground(param[2]);
 								else if (nparam == 5 && param[1] == 2)
-									color = fBuffer->GuessPaletteColor(
-										param[2], param[3], param[4]);
-
-								if (color >= 0) {
-									attributes &= ~FORECOLOR;
-									attributes |= FORECOLORED(color);
-									attributes |= FORESET;
-								}
+									attributes.SetDirectForeground(param[2], param[3], param[4]);
 
 								row = nparam; // force exit of the parsing
 								break;
 							}
 
 							case 39:
-								attributes &= ~FORESET;
+								attributes.UnsetForeground();
 								break;
 
 							case 100:
@@ -876,32 +866,22 @@ TermParse::EscParse()
 							case 45:
 							case 46:
 							case 47:
-								attributes &= ~BACKCOLOR;
-								attributes |= BACKCOLORED(param[row] - 40);
-								attributes |= BACKSET;
+								attributes.SetIndexedBackground(param[row] - 40);
 								break;
 
 							case 48:
 							{
-								int color = -1;
 								if (nparam == 3 && param[1] == 5)
-									color = param[2];
+									attributes.SetIndexedBackground(param[2]);
 								else if (nparam == 5 && param[1] == 2)
-									color = fBuffer->GuessPaletteColor(
-										param[2], param[3], param[4]);
-
-								if (color >= 0) {
-									attributes &= ~BACKCOLOR;
-									attributes |= BACKCOLORED(color);
-									attributes |= BACKSET;
-								}
+									attributes.SetDirectBackground(param[2], param[3], param[4]);
 
 								row = nparam; // force exit of the parsing
 								break;
 							}
 
 							case 49:
-								attributes &= ~BACKSET;
+								attributes.UnsetBackground();
 								break;
 						}
 					}
@@ -996,8 +976,11 @@ TermParse::EscParse()
 
 				case CASE_DECALN:
 					/* DECALN */
-					fBuffer->FillScreen(UTF8Char('E'), 0);
-					parsestate = groundtable;
+					{
+						Attributes attr;
+						fBuffer->FillScreen(UTF8Char('E'), attr);
+						parsestate = groundtable;
+					}
 					break;
 
 					//	case CASE_GSETS:
diff --git a/src/apps/terminal/TermView.cpp b/src/apps/terminal/TermView.cpp
index e6d377a01c..6d2e77af0d 100644
--- a/src/apps/terminal/TermView.cpp
+++ b/src/apps/terminal/TermView.cpp
@@ -1028,13 +1028,13 @@ TermView::_Deactivate()
 
 //! Draw part of a line in the given view.
 void
-TermView::_DrawLinePart(float x1, float y1, uint32 attr, char *buf,
-	int32 width, Highlight* highlight, bool cursor, BView *inView)
+TermView::_DrawLinePart(float x1, float y1, Attributes attr,
+	char *buf, int32 width, Highlight* highlight, bool cursor, BView *inView)
 {
 	if (highlight != NULL)
-		attr = highlight->Highlighter()->AdjustTextAttributes(attr);
+		attr.state = highlight->Highlighter()->AdjustTextAttributes(attr.state);
 
-	inView->SetFont(IS_BOLD(attr) && !fEmulateBold && fAllowBold
+	inView->SetFont(attr.IsBold() && !fEmulateBold && fAllowBold
 		? &fBoldFont : &fHalfFont);
 
 	// Set pen point
@@ -1045,13 +1045,10 @@ TermView::_DrawLinePart(float x1, float y1, uint32 attr, char *buf,
 	rgb_color rgb_back = fTextBackColor;
 
 	// color attribute
-	int forecolor = IS_FORECOLOR(attr);
-	int backcolor = IS_BACKCOLOR(attr);
-
-	if (IS_FORESET(attr))
-		rgb_fore = fTextBuffer->PaletteColor(forecolor);
-	if (IS_BACKSET(attr))
-		rgb_back = fTextBuffer->PaletteColor(backcolor);
+	if (attr.IsForeSet())
+		rgb_fore = attr.ForegroundColor(fTextBuffer->Palette());
+	if (attr.IsBackSet())
+		rgb_back = attr.BackgroundColor(fTextBuffer->Palette());
 
 	// Selection check.
 	if (cursor) {
@@ -1062,7 +1059,7 @@ TermView::_DrawLinePart(float x1, float y1, uint32 attr, char *buf,
 		rgb_back = highlight->Highlighter()->BackgroundColor();
 	} else {
 		// Reverse attribute(If selected area, don't reverse color).
-		if (IS_INVERSE(attr)) {
+		if (attr.IsInverse()) {
 			rgb_color rgb_tmp = rgb_fore;
 			rgb_fore = rgb_back;
 			rgb_back = rgb_tmp;
@@ -1076,7 +1073,7 @@ TermView::_DrawLinePart(float x1, float y1, uint32 attr, char *buf,
 	inView->SetHighColor(rgb_fore);
 
 	// Draw character.
-	if (IS_BOLD(attr)) {
+	if (attr.IsBold()) {
 		if (fEmulateBold) {
 			inView->MovePenTo(x1 - 1, y1 + fFontAscent - 1);
 			inView->DrawString((char *)buf);
@@ -1097,7 +1094,7 @@ TermView::_DrawLinePart(float x1, float y1, uint32 attr, char *buf,
 	inView->SetDrawingMode(B_OP_COPY);
 
 	// underline attribute
-	if (IS_UNDER(attr)) {
+	if (attr.IsUnder()) {
 		inView->MovePenTo(x1, y1 + fFontAscent);
 		inView->StrokeLine(BPoint(x1 , y1 + fFontAscent),
 			BPoint(x2 , y1 + fFontAscent));
@@ -1116,7 +1113,7 @@ TermView::_DrawCursor()
 	int32 firstVisible = _LineAt(0);
 
 	UTF8Char character;
-	uint32 attr = 0;
+	Attributes attr;
 
 	bool cursorVisible = _IsCursorVisible();
 
@@ -1139,7 +1136,7 @@ TermView::_DrawCursor()
 			character, attr) == A_CHAR
 			&& (fCursorStyle == BLOCK_CURSOR || !cursorVisible)) {
 
-		int32 width = IS_WIDTH(attr) ? FULL_WIDTH : HALF_WIDTH;
+		int32 width = attr.IsWidth() ? FULL_WIDTH : HALF_WIDTH;
 		char buffer[5];
 		int32 bytes = UTF8Char::ByteCount(character.bytes[0]);
 		memcpy(buffer, character.bytes, bytes);
@@ -1160,15 +1157,15 @@ TermView::_DrawCursor()
 				fTextBuffer->GetCellAttributes(
 						fCursor.y, fCursor.x, attr, count);
 			else
-				attr = fVisibleTextBuffer->GetLineColor(
-						fCursor.y - firstVisible);
+				fVisibleTextBuffer->GetLineColor(fCursor.y - firstVisible, attr);
+
+			if (attr.IsBackSet())
+				rgb_back = attr.BackgroundColor(fTextBuffer->Palette());
 
-			if (IS_BACKSET(attr))
-				rgb_back = fTextBuffer->PaletteColor(IS_BACKCOLOR(attr));
 			SetHighColor(rgb_back);
 		}
 
-		if (IS_WIDTH(attr) && fCursorStyle != IBEAM_CURSOR)
+		if (attr.IsWidth() && fCursorStyle != IBEAM_CURSOR)
 			rect.right += fFontWidth;
 
 		FillRect(rect);
@@ -1339,7 +1336,7 @@ TermView::Draw(BRect updateRect)
 
 	// draw the affected line parts
 	if (x1 <= x2) {
-		uint32 attr = 0;
+		Attributes attr;
 
 		for (int32 j = y1; j <= y2; j++) {
 			int32 k = x1;
@@ -1383,12 +1380,10 @@ TermView::Draw(BRect updateRect)
 						rect.right = rect.left + fFontWidth * count - 1;
 						nextColumn = i + count;
 					} else
-						attr = fVisibleTextBuffer->GetLineColor(j - firstVisible);
+						fVisibleTextBuffer->GetLineColor(j - firstVisible, attr);
 
-					if (IS_BACKSET(attr)) {
-						int backcolor = IS_BACKCOLOR(attr);
-						rgb_back = fTextBuffer->PaletteColor(backcolor);
-					}
+					if (attr.IsBackSet())
+						rgb_back = attr.BackgroundColor(fTextBuffer->Palette());
 
 					SetHighColor(rgb_back);
 					rgb_back = HighColor();
@@ -1404,7 +1399,7 @@ TermView::Draw(BRect updateRect)
 				// side - drawing the whole string with one call render the
 				// characters not aligned to cells grid - that looks much more
 				// inaccurate for full-width strings than for half-width ones.
-				if (IS_WIDTH(attr))
+				if (attr.IsWidth())
 					count = FULL_WIDTH;
 
 				_DrawLinePart(fFontWidth * i, (int32)_LineOffset(j),
diff --git a/src/apps/terminal/TermView.h b/src/apps/terminal/TermView.h
index 9836831ddc..7220fef11c 100644
--- a/src/apps/terminal/TermView.h
+++ b/src/apps/terminal/TermView.h
@@ -23,6 +23,7 @@
 #include <String.h>
 #include <View.h>
 
+#include "TerminalLine.h"
 #include "TermPos.h"
 #include "TermViewHighlight.h"
 
@@ -202,7 +203,7 @@ private:
 			void				_Activate();
 			void				_Deactivate();
 
-			void				_DrawLinePart(float x1, float y1, uint32 attr,
+			void				_DrawLinePart(float x1, float y1, Attributes attr,
 									char* buffer, int32 width,
 									Highlight* highlight, bool cursor,
 									BView* inView);
@@ -315,7 +316,7 @@ private:
 			BScrollBar*			fScrollBar;
 			InlineInput*		fInline;
 
-			// Color and Attribute.
+			// Color and Attributes.
 			rgb_color			fTextForeColor;
 			rgb_color			fTextBackColor;
 			rgb_color			fCursorForeColor;
diff --git a/src/apps/terminal/TerminalBuffer.cpp b/src/apps/terminal/TerminalBuffer.cpp
index ccec6fed30..d05abdf32c 100644
--- a/src/apps/terminal/TerminalBuffer.cpp
+++ b/src/apps/terminal/TerminalBuffer.cpp
@@ -30,7 +30,7 @@ TerminalBuffer::TerminalBuffer()
 	fAlternateScreen(NULL),
 	fAlternateHistory(NULL),
 	fAlternateScreenOffset(0),
-	fAlternateAttributes(0),
+	fAlternateAttributes(),
 	fColorsPalette(NULL),
 	fListenerValid(false)
 {
@@ -280,34 +280,6 @@ TerminalBuffer::SetPaletteColor(uint8 index, rgb_color color)
 }
 
 
-rgb_color
-TerminalBuffer::PaletteColor(uint8 index)
-{
-	return fColorsPalette[index];
-}
-
-
-int
-TerminalBuffer::GuessPaletteColor(int red, int green, int blue)
-{
-	int distance = 255 * 100;
-	int index = -1;
-	for (uint32 i = 0; i < kTermColorCount && distance > 0; i++) {
-		rgb_color color = fColorsPalette[i];
-		int r = 30 * abs(color.red - red);
-		int g = 59 * abs(color.green - green);
-		int b = 11 * abs(color.blue - blue);
-		int d = r + g + b;
-		if (distance > d) {
-			index = i;
-			distance = d;
-		}
-	}
-
-	return min_c(index, int(kTermColorCount - 1));
-}
-
-
 void
 TerminalBuffer::NotifyQuit(int32 reason)
 {
diff --git a/src/apps/terminal/TerminalBuffer.h b/src/apps/terminal/TerminalBuffer.h
index 2004ab02a9..3894de7426 100644
--- a/src/apps/terminal/TerminalBuffer.h
+++ b/src/apps/terminal/TerminalBuffer.h
@@ -42,8 +42,8 @@ public:
 			void				SetCursorBlinking(bool blinking);
 			void				SetCursorHidden(bool hidden);
 			void				SetPaletteColor(uint8 index, rgb_color color);
-			rgb_color			PaletteColor(uint8 index);
-			int					GuessPaletteColor(int red, int green, int blue);
+			inline const rgb_color*
+								Palette() const { return fColorsPalette; }
 
 			void				NotifyQuit(int32 reason);
 
@@ -75,7 +75,7 @@ private:
 			TerminalLine**		fAlternateScreen;
 			HistoryBuffer*		fAlternateHistory;
 			int32				fAlternateScreenOffset;
-			uint32				fAlternateAttributes;
+			Attributes			fAlternateAttributes;
 			rgb_color*			fColorsPalette;
 
 			// listener/dirty region management
diff --git a/src/apps/terminal/TerminalLine.h b/src/apps/terminal/TerminalLine.h
index 044cce7d99..abdc25a276 100644
--- a/src/apps/terminal/TerminalLine.h
+++ b/src/apps/terminal/TerminalLine.h
@@ -10,6 +10,7 @@
 #ifndef TERMINAL_LINE_H
 #define TERMINAL_LINE_H
 
+#include <GraphicsDefs.h>
 #include <SupportDefs.h>
 
 #include "TermConst.h"
@@ -17,19 +18,142 @@
 #include "UTF8Char.h"
 
 
+struct Attributes {
+	uint32 state;
+	uint32 foreground;
+	uint32 background;
+
+	Attributes() : state(0), foreground(0), background(0) {}
+
+	inline void Reset() { state = 0; foreground = 0; background = 0; }
+
+	inline bool IsWidth() const { return (state & A_WIDTH) == A_WIDTH; }
+	inline bool IsBold() const { return (state & BOLD) == BOLD; }
+	inline bool IsUnder() const { return (state & UNDERLINE) == UNDERLINE; }
+	inline bool IsInverse() const { return (state & INVERSE) == INVERSE; }
+	inline bool IsMouse() const { return (state & MOUSE) == MOUSE; }
+	inline bool IsForeSet() const { return (state & FORESET) == FORESET; }
+	inline bool IsBackSet() const { return (state & BACKSET) == BACKSET; }
+	inline bool IsFont() const { return (state & FONT) == FONT; }
+	inline bool IsCR() const { return (state & DUMPCR) == DUMPCR; }
+
+	inline void SetDirectForeground(uint8 red, uint8 green, uint8 blue)
+	{
+		foreground = 0x80000000 | (red << 16) | (green << 8) | blue;
+		state &= ~FORECOLOR;
+		state |= FORESET;
+	}
+
+	inline void SetDirectBackground(uint8 red, uint8 green, uint8 blue)
+	{
+		background = 0x80000000 | (red << 16) | (green << 8) | blue;
+		state &= ~BACKCOLOR;
+		state |= BACKSET;
+	}
+
+	inline void SetIndexedForeground(uint32 index)
+	{
+		state &= ~FORECOLOR;
+		state |= FORESET;
+		state |= FORECOLORED(index);
+		foreground = 0;
+	}
+
+	inline void SetIndexedBackground(uint32 index)
+	{
+		state &= ~BACKCOLOR;
+		state |= BACKSET;
+		state |= BACKCOLORED(index);
+		background = 0;
+	}
+
+	inline void UnsetForeground()
+	{
+		state &= ~FORESET;
+		foreground = 0;
+	}
+
+	inline void UnsetBackground()
+	{
+		state &= ~BACKSET;
+		background = 0;
+	}
+
+	inline rgb_color
+	ForegroundColor(const rgb_color* indexedColors) const
+	{
+		if ((foreground & 0x80000000) != 0)
+			return make_color((foreground >> 16) & 0xFF,
+				(foreground >> 8) & 0xFF,
+				foreground & 0xFF);
+		else
+			return indexedColors[(state & FORECOLOR) >> 16];
+	}
+
+	inline rgb_color
+	BackgroundColor(const rgb_color* indexedColors) const
+	{
+		if ((background & 0x80000000) != 0)
+			return make_color((background >> 16) & 0xFF,
+				(background >> 8) & 0xFF,
+				background & 0xFF);
+		else
+			return indexedColors[(state & BACKCOLOR) >> 24];
+	}
+
+	inline Attributes&
+	operator&=(uint32 value) { state &= value; return *this; }
+
+	inline Attributes&
+	operator|=(uint32 value) { state |= value; return *this; }
+
+	inline uint32
+	operator|(uint32 value) { return state | value; }
+
+	inline uint32
+	operator&(uint32 value) { return state & value; }
+
+	inline bool
+	operator==(const Attributes& other) const
+	{
+		return state == other.state
+			&& foreground == other.foreground
+			&& background == other.background;
+	}
+
+	inline bool
+	operator!=(const Attributes& other) const
+	{
+		return state != other.state
+			|| foreground != other.foreground
+			|| background != other.background;
+	}
+};
+
+
 struct TerminalCell {
-	UTF8Char		character;
-	uint32			attributes;
+	UTF8Char			character;
+	Attributes			attributes;
 };
 
 
 struct TerminalLine {
 	uint16			length;
 	bool			softBreak;	// soft line break
-	uint32			attributes;
+	Attributes		attributes;
 	TerminalCell	cells[1];
 
-	inline void Clear(uint32 attr = 0, size_t count = 0)
+	inline void Clear()
+	{
+		Clear(Attributes());
+	}
+
+	inline void Clear(size_t count)
+	{
+		Clear(Attributes(), count);
+	}
+
+	inline void Clear(Attributes attr, size_t count = 0)
 	{
 		length = 0;
 		attributes = attr;
@@ -41,7 +165,7 @@ struct TerminalLine {
 
 
 struct AttributesRun {
-	uint32	attributes;
+	Attributes	attributes;
 	uint16	offset;			// character offset
 	uint16	length;			// length of the run in characters
 };
@@ -52,7 +176,7 @@ struct HistoryLine {
 	uint16			attributesRunCount;	// number of attribute runs
 	uint16			byteLength : 15;	// number of bytes in the line
 	bool			softBreak : 1;		// soft line break;
-	uint32			attributes;
+	Attributes		attributes;
 
 	AttributesRun* AttributesRuns() const
 	{