diff --git a/binaries/data/mods/official/gui/test/functions_sim_entity.js b/binaries/data/mods/official/gui/test/functions_sim_entity.js
index eda985c912..92f3acd948 100644
--- a/binaries/data/mods/official/gui/test/functions_sim_entity.js
+++ b/binaries/data/mods/official/gui/test/functions_sim_entity.js
@@ -47,7 +47,7 @@ function worldClickHandler(event)
 	if ( getCursorName() == "cursor-rally" )
 	{	
 		for ( var i=0; i<selection.length; i++ )
-			selection[i].setRallyPoint();	
+			selection[i].setRallyPointAtCursor();	
 		setCursor("arrow-default");
 		return;
 	}
diff --git a/binaries/data/mods/official/scripts/entity_functions.js b/binaries/data/mods/official/scripts/entity_functions.js
index af7ecf8bc8..42fa3791ad 100644
--- a/binaries/data/mods/official/scripts/entity_functions.js
+++ b/binaries/data/mods/official/scripts/entity_functions.js
@@ -1387,6 +1387,9 @@ function entityEventPrepareOrder( evt )
 		case ORDER_START_CONSTRUCTION:
 			evt.notifyType = NOTIFY_NONE;
 			break;
+
+		case ORDER_SET_RALLY_POINT:
+			break;
 			
 		default:
 			console.write("Unknown order type " + evt.orderType + "; ignoring.");
@@ -1587,7 +1590,7 @@ function entityFinishProduction( evt )
 			{
 				//console.write( "Created: ", template.tag );
 				var rally = this.getRallyPoint();
-				created.order( ORDER_GOTO, rally.x, rally.z );	
+				created.order( ORDER_GOTO, rally.x, rally.y );	
 			}
 		}		
 	}
diff --git a/source/network/NetClient.cpp b/source/network/NetClient.cpp
index 3c570361f2..02b0630a4a 100644
--- a/source/network/NetClient.cpp
+++ b/source/network/NetClient.cpp
@@ -186,6 +186,7 @@ bool CNetClient::SetupSession( CNetSession* pSession )
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_PRODUCE, NCS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_PLACE_OBJECT, NCS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_RUN, NCS_INGAME, (void*)&OnInGame, pContext );
+	pSession->AddTransition( NCS_INGAME, ( uint )NMT_SET_RALLY_POINT, NCS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_NOTIFY_REQUEST, NCS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_FORMATION_GOTO, NCS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NCS_INGAME, ( uint )NMT_FORMATION_GENERIC, NCS_INGAME, (void*)&OnInGame, pContext );
diff --git a/source/network/NetMessage.cpp b/source/network/NetMessage.cpp
index e6f65268c1..96f7e53802 100644
--- a/source/network/NetMessage.cpp
+++ b/source/network/NetMessage.cpp
@@ -213,6 +213,7 @@ void CNetMessage::ScriptingInit()
 	g_ScriptingHost.DefineConstant( "NMT_GENERIC", NMT_GENERIC );
 	g_ScriptingHost.DefineConstant( "NMT_PRODUCE", NMT_PRODUCE );
 	g_ScriptingHost.DefineConstant( "NMT_PLACE_OBJECT", NMT_PLACE_OBJECT );
+	g_ScriptingHost.DefineConstant( "NMT_SET_RALLY_POINT", NMT_SET_RALLY_POINT );
 	g_ScriptingHost.DefineConstant( "NMT_NOTIFY_REQUEST", NMT_NOTIFY_REQUEST );
 	g_ScriptingHost.DefineConstant( "NMT_FORMATION_GOTO", NMT_FORMATION_GOTO );
 	g_ScriptingHost.DefineConstant( "NMT_FORMATION_GENERIC", NMT_FORMATION_GENERIC );
@@ -387,6 +388,41 @@ CNetMessage* CNetMessage::CommandFromJSArgs(
 			return pMessage;
 		}
 
+	case NMT_SET_RALLY_POINT:
+		{
+			CSetRallyPointMessage* pMessage = new CSetRallyPointMessage;
+			if ( !pMessage ) return NULL;
+
+			pMessage->m_IsQueued = isQueued;
+			pMessage->m_Entities = entities;
+
+			try
+			{
+				if ( idx + 2 > argc )
+				{
+					JS_ReportError( pContext, "Too few parameters!" );
+					return NULL; 
+				}
+
+				if ( !JSVAL_IS_INT( argv[ idx ] ) ||
+					 !JSVAL_IS_INT( argv[ idx + 1 ] ) )
+				{
+					JS_ReportError( pContext, "Parameter type error!" );
+					return NULL;
+				}
+
+				pMessage->m_TargetX = ToPrimitive< int >( argv[ idx++ ] );
+				pMessage->m_TargetY = ToPrimitive< int >( argv[ idx++ ] );
+			}
+			catch ( PSERROR_Scripting_ConversionFailed )
+			{
+				JS_ReportError( pContext, "Invalid location" );
+				return NULL;
+			}
+
+			return pMessage;
+		}
+
 	case NMT_FORMATION_GOTO:
 		{
 			CFormationGotoMessage* pMessage = new CFormationGotoMessage;
@@ -722,6 +758,18 @@ CNetMessage* CNetMessage::CreatePositionMessage(
 			return pMessage;
 		}
 
+	case NMT_SET_RALLY_POINT:
+		{
+			CSetRallyPointMessage *pMessage = new CSetRallyPointMessage;
+			if ( !pMessage ) return NULL;
+
+			pMessage->m_Entities = entities;
+			pMessage->m_TargetX = pos.x;
+			pMessage->m_TargetY = pos.y;
+
+			return pMessage;
+		}
+
 	case NMT_FORMATION_GOTO:
 		{
 			CFormationGotoMessage *pMessage = new CFormationGotoMessage;
@@ -758,6 +806,7 @@ CNetMessage* CNetMessage::CreateEntityIntMessage(
 			pMessage->m_Entities = entities;
 			pMessage->m_Target   = target;
 			pMessage->m_Action   = action;
+			pMessage->m_Run      = false;
 			
 			return pMessage;
 		}
@@ -911,6 +960,10 @@ CNetMessage* CNetMessageFactory::CreateMessage(const void* pData,
 		pNewMessage = new CRunMessage;
 		break;
 
+	case NMT_SET_RALLY_POINT:
+		pNewMessage = new CSetRallyPointMessage;
+		break;
+
 	case NMT_NOTIFY_REQUEST:
 		pNewMessage = new CNotifyRequestMessage;
 		break;
@@ -1124,6 +1177,46 @@ CNetMessage* CNetMessageFactory::CreateMessage(
 		}
 		break;
 
+	case NMT_SET_RALLY_POINT:
+		{
+			CSetRallyPointMessage *pMessage = new CSetRallyPointMessage;
+			if ( !pMessage ) return NULL;
+
+			pMessage->m_IsQueued = queued;
+			pMessage->m_Entities = entities;
+
+			try
+			{
+				if ( idx + 2 > argc )
+				{
+					STMT(
+							JS_ReportError( pContext, "Too few parameters!" );
+							return NULL;
+						);
+				}
+				
+				if ( !JSVAL_IS_INT( argv[ idx ] ) ||
+					 !JSVAL_IS_INT( argv[ idx + 1 ] ) )
+				{
+					STMT(
+							JS_ReportError( pContext, "Parameter type error!" );
+							return NULL;
+						);
+				}
+
+				pMessage->m_TargetX = ToPrimitive< int >( argv[ idx++ ] );
+				pMessage->m_TargetY = ToPrimitive< int >( argv[ idx++ ] );
+			}
+			catch ( PSERROR_Scripting_ConversionFailed )
+			{
+				JS_ReportError( pContext, "Invalid location" );
+				return NULL;
+			}
+
+			pNewMessage = pMessage;
+		}
+		break;
+
 	case NMT_FORMATION_GOTO:
 		{
 			CFormationGotoMessage *pMessage = new CFormationGotoMessage;
diff --git a/source/network/NetMessages.h b/source/network/NetMessages.h
index e89356f9b9..4f7d58d457 100644
--- a/source/network/NetMessages.h
+++ b/source/network/NetMessages.h
@@ -56,6 +56,7 @@ enum NetMessageType
 	NMT_PRODUCE,
 	NMT_PLACE_OBJECT,
 	NMT_RUN,
+	NMT_SET_RALLY_POINT,
 	NMT_NOTIFY_REQUEST,
 	NMT_FORMATION_GOTO,
 	NMT_FORMATION_GENERIC,
@@ -198,6 +199,11 @@ DERIVE_NMT_CLASS_(Command, AddWaypoint, NMT_ADD_WAYPOINT)
 	NMT_FIELD_INT(m_TargetY, u32, 2)
 END_NMT_CLASS()
 
+DERIVE_NMT_CLASS_(Command, SetRallyPoint, NMT_SET_RALLY_POINT)
+	NMT_FIELD_INT(m_TargetX, u32, 2)
+	NMT_FIELD_INT(m_TargetY, u32, 2)
+END_NMT_CLASS()
+
 DERIVE_NMT_CLASS_(Command, Generic, NMT_GENERIC)
 	NMT_FIELD(HEntity, m_Target)
 	NMT_FIELD_INT(m_Action, u32, 4)
diff --git a/source/network/NetServer.cpp b/source/network/NetServer.cpp
index bfc61dc9c6..cdae8c5b0f 100644
--- a/source/network/NetServer.cpp
+++ b/source/network/NetServer.cpp
@@ -144,6 +144,7 @@ bool CNetServer::SetupSession( CNetSession* pSession )
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_PRODUCE, NSS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_PLACE_OBJECT, NSS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_RUN, NSS_INGAME, (void*)&OnInGame, pContext );
+	pSession->AddTransition( NSS_INGAME, ( uint )NMT_SET_RALLY_POINT, NSS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_NOTIFY_REQUEST, NSS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_FORMATION_GOTO, NSS_INGAME, (void*)&OnInGame, pContext );
 	pSession->AddTransition( NSS_INGAME, ( uint )NMT_FORMATION_GENERIC, NSS_INGAME, (void*)&OnInGame, pContext );
diff --git a/source/simulation/Entity.cpp b/source/simulation/Entity.cpp
index ed572ac34e..2942c18431 100644
--- a/source/simulation/Entity.cpp
+++ b/source/simulation/Entity.cpp
@@ -827,10 +827,19 @@ void CEntity::PushOrder( const CEntityOrder& order )
 	CEventPrepareOrder evt( order.m_target_entity, order.m_type, order.m_action, order.m_produce_name );
 	if( DispatchEvent(&evt) )
 	{
-		m_orderQueue.push_back( order );
-		if(evt.m_notifyType != CEntityListener::NOTIFY_NONE)
+		if (order.m_type == CEntityOrder::ORDER_SET_RALLY_POINT)
 		{
-			CheckListeners( evt.m_notifyType, evt.m_notifySource );
+			// It doesn't make sense to queue this type of order; just set the rally point
+			entf_set(ENTF_HAS_RALLY_POINT);
+			m_rallyPoint = order.m_target_location;
+		}
+		else
+		{
+			m_orderQueue.push_back( order );
+			if(evt.m_notifyType != CEntityListener::NOTIFY_NONE)
+			{
+				CheckListeners( evt.m_notifyType, evt.m_notifySource );
+			}
 		}
 	}
 }
diff --git a/source/simulation/Entity.h b/source/simulation/Entity.h
index 98b3589edf..eb06a6556c 100644
--- a/source/simulation/Entity.h
+++ b/source/simulation/Entity.h
@@ -189,7 +189,7 @@ public:
 	
 	CVector2D m_orientation_unclamped;
 
-	CVector3D m_rallyPoint;	// valid iff ENT_HAS_RALLY_POINT
+	CVector2D m_rallyPoint;	// valid iff ENT_HAS_RALLY_POINT
 
 	// If the actor's current transform data is valid (i.e. the entity hasn't
 	// moved since it was last calculated, and the terrain hasn't been changed).
@@ -414,7 +414,7 @@ public:
 
 	jsval_t HasRallyPoint( JSContext* cx, uintN argc, jsval* argv );
 	jsval_t GetRallyPoint( JSContext* cx, uintN argc, jsval* argv );
-	jsval_t SetRallyPoint( JSContext* cx, uintN argc, jsval* argv );
+	jsval_t SetRallyPointAtCursor( JSContext* cx, uintN argc, jsval* argv );
 
 	jsval_t AddAura( JSContext* cx, uintN argc, jsval* argv );
 	jsval_t RemoveAura( JSContext* cx, uintN argc, jsval* argv );
diff --git a/source/simulation/EntityOrders.h b/source/simulation/EntityOrders.h
index 39478bbe1d..efbd8c2a40 100644
--- a/source/simulation/EntityOrders.h
+++ b/source/simulation/EntityOrders.h
@@ -96,8 +96,9 @@ public:
 		ORDER_GENERIC_NOPATHING,	// 11
 		ORDER_PRODUCE,				// 12
 		ORDER_START_CONSTRUCTION,	// 13
-		ORDER_NOTIFY_REQUEST,		// 14
-		ORDER_LAST					// 15
+		ORDER_SET_RALLY_POINT,		// 14
+		ORDER_NOTIFY_REQUEST,		// 15
+		ORDER_LAST					// 16
 	};
 	EOrderType m_type;
 
diff --git a/source/simulation/EntityRendering.cpp b/source/simulation/EntityRendering.cpp
index be1b5d02b2..2df051c9f3 100644
--- a/source/simulation/EntityRendering.cpp
+++ b/source/simulation/EntityRendering.cpp
@@ -565,8 +565,8 @@ void CEntity::RenderRallyPoint()
 	if( !m_visible )
 		return;
 
-	if ( !entf_get(ENTF_HAS_RALLY_POINT) || g_Selection.m_unitUITextures.find(m_base->m_rallyName) == 
-							g_Selection.m_unitUITextures.end() )
+	if ( !entf_get(ENTF_HAS_RALLY_POINT) ||
+		 g_Selection.m_unitUITextures.find(m_base->m_rallyName) == g_Selection.m_unitUITextures.end() )
 	{
 		return;
 	}
@@ -584,8 +584,10 @@ void CEntity::RenderRallyPoint()
 	CTexture tex;
 	tex.SetHandle( g_Selection.m_unitUITextures[m_base->m_rallyName] );
 	sprite.SetTexture(&tex);
-	CVector3D rally = m_rallyPoint;
-	rally.Y += m_base->m_rallyHeight/2.f + .1f;
+	// Place the sprite slightly above ground/water level.
+	float terrainHeight = g_Game->GetWorld()->GetTerrain()->GetExactGroundLevel(m_rallyPoint);
+	float height = std::max(terrainHeight, g_Renderer.GetWaterManager()->m_WaterHeight) + 0.5f;
+	CVector3D rally(m_rallyPoint.x, height, m_rallyPoint.y);
 	sprite.SetTranslation(rally);
 	sprite.Render();
 }
diff --git a/source/simulation/EntityScriptInterface.cpp b/source/simulation/EntityScriptInterface.cpp
index 461a2269d7..dcbcd88f84 100644
--- a/source/simulation/EntityScriptInterface.cpp
+++ b/source/simulation/EntityScriptInterface.cpp
@@ -15,6 +15,7 @@
 #include "renderer/WaterManager.h"
 #include "scripting/ScriptableComplex.inl"
 #include "ps/scripting/JSCollection.h"
+#include "network/NetMessage.h"
 
 #include "Aura.h"
 #include "Collision.h"
@@ -82,7 +83,7 @@ void CEntity::ScriptingInit()
 	AddMethod<jsval_t, &CEntity::FindSector>( "findSector", 4);
 	AddMethod<jsval_t, &CEntity::GetHeight>( "getHeight", 0 );
 	AddMethod<jsval_t, &CEntity::HasRallyPoint>( "hasRallyPoint", 0 );
-	AddMethod<jsval_t, &CEntity::SetRallyPoint>( "setRallyPoint", 0 );
+	AddMethod<jsval_t, &CEntity::SetRallyPointAtCursor>( "setRallyPointAtCursor", 0 );
 	AddMethod<jsval_t, &CEntity::GetRallyPoint>( "getRallyPoint", 0 );
 	AddMethod<jsval_t, &CEntity::OnDamaged>( "onDamaged", 1 );
 	AddMethod<jsval_t, &CEntity::GetVisibleEntities>( "getVisibleEntities", 0 );
@@ -821,12 +822,19 @@ jsval_t CEntity::HasRallyPoint( JSContext* UNUSED(cx), uintN UNUSED(argc), jsval
 }
 jsval_t CEntity::GetRallyPoint( JSContext* UNUSED(cx), uintN UNUSED(argc), jsval* UNUSED(argv) )
 {
-	return ToJSVal( m_rallyPoint );
+	CVector3D v3d( m_rallyPoint.x, m_rallyPoint.y, 0 );
+	return ToJSVal( v3d );
 }
-jsval_t CEntity::SetRallyPoint( JSContext* UNUSED(cx), uintN UNUSED(argc), jsval* UNUSED(argv) )
+jsval_t CEntity::SetRallyPointAtCursor( JSContext* UNUSED(cx), uintN UNUSED(argc), jsval* UNUSED(argv) )
 {
-	entf_set(ENTF_HAS_RALLY_POINT);
-	m_rallyPoint = g_Game->GetView()->GetCamera()->GetWorldCoordinates(true);
+	// Queue an order over the network to set a rally point
+	CSetRallyPointMessage* msg = new CSetRallyPointMessage;
+	msg->m_Entities = CEntityList(me);
+	msg->m_IsQueued = true;
+	CVector3D point = g_Game->GetView()->GetCamera()->GetWorldCoordinates(true);
+	msg->m_TargetX = (int) point.X;
+	msg->m_TargetY = (int) point.Z;
+	g_Game->GetSimulation()->QueueLocalCommand(msg);
 	return JS_TRUE;
 }
 
diff --git a/source/simulation/Simulation.cpp b/source/simulation/Simulation.cpp
index 923ab4ba18..74cc84f38e 100644
--- a/source/simulation/Simulation.cpp
+++ b/source/simulation/Simulation.cpp
@@ -371,10 +371,12 @@ size_t CSimulation::TranslateMessage(CNetMessage* pMsg, size_t clientMask, void*
 		case NMT_PATROL:
 			ENTITY_POSITION(CPatrolMessage, ORDER_PATROL);
 			break;
+		case NMT_SET_RALLY_POINT:
+			ENTITY_POSITION(CSetRallyPointMessage, ORDER_SET_RALLY_POINT);
+			break;
 		case NMT_FORMATION_GOTO:
 			ENTITY_POSITION_FORM(CFormationGotoMessage, ORDER_GOTO);
 			break;
-
 		//TODO: make formation move to within range of target and then attack normally
 		case NMT_GENERIC:
 			ENTITY_ENTITY_INT_BOOL(CGenericMessage, ORDER_GENERIC);
diff --git a/source/simulation/scripting/SimulationScriptInit.cpp b/source/simulation/scripting/SimulationScriptInit.cpp
index ca2b2a94c9..945c5a3ccd 100644
--- a/source/simulation/scripting/SimulationScriptInit.cpp
+++ b/source/simulation/scripting/SimulationScriptInit.cpp
@@ -53,6 +53,7 @@ void SimulationScriptInit()
 	g_ScriptingHost.DefineConstant( "ORDER_PATROL", CEntityOrder::ORDER_PATROL );
 	g_ScriptingHost.DefineConstant( "ORDER_GENERIC", CEntityOrder::ORDER_GENERIC );
 	g_ScriptingHost.DefineConstant( "ORDER_PRODUCE", CEntityOrder::ORDER_PRODUCE );
+	g_ScriptingHost.DefineConstant( "ORDER_SET_RALLY_POINT", CEntityOrder::ORDER_SET_RALLY_POINT );
 	g_ScriptingHost.DefineConstant( "ORDER_START_CONSTRUCTION", CEntityOrder::ORDER_START_CONSTRUCTION );
 }