diff --git a/test/diag_color.t b/test/diag_color.t
new file mode 100755
index 000000000..bb731efa3
--- /dev/null
+++ b/test/diag_color.t
@@ -0,0 +1,75 @@
+#! /usr/bin/env python2.7
+# -*- coding: utf-8 -*-
+###############################################################################
+#
+# Copyright 2006 - 2014, Paul Beckingham, Federico Hernandez.
+#
+# Permission is hereby granted, free of charge, to any person obtaining a copy
+# of this software and associated documentation files (the "Software"), to deal
+# in the Software without restriction, including without limitation the rights
+# to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
+# copies of the Software, and to permit persons to whom the Software is
+# furnished to do so, subject to the following conditions:
+#
+# The above copyright notice and this permission notice shall be included
+# in all copies or substantial portions of the Software.
+#
+# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS
+# OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
+# FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL
+# THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
+# LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
+# OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE
+# SOFTWARE.
+#
+# http://www.opensource.org/licenses/mit-license.php
+#
+###############################################################################
+
+import sys
+import os
+import unittest
+# Ensure python finds the local simpletap module
+sys.path.append(os.path.dirname(os.path.abspath(__file__)))
+
+from basetest import Task, TestCase
+
+
+class TestDiagColor(TestCase):
+    def setUp(self):
+        self.t = Task()
+
+    def test_diag_color_builtin(self):
+        """Task diag detects terminal as color compatible with test-builtin"""
+        code, out, err = self.t.diag()
+
+        expected = "\x1b[1m"
+        self.assertNotIn(expected, out)
+
+    def test_diag_color(self):
+        """Task diag detects terminal as color compatible"""
+        code, out, err = self.t(("diag",))
+
+        expected = "\x1b[1m"
+        self.assertNotIn(expected, out)
+
+    def test_diag_nocolor(self):
+        """Task diag respects rc:color=off and disables color"""
+        code, out, err = self.t(("rc.color:off", "diag"))
+
+        expected = "\x1b[1m"
+        self.assertNotIn(expected, out)
+
+    def test_diag_force_color(self):
+        """Task diag respects rc:_forcecolor=on and forces color"""
+        code, out, err = self.t(("rc._forcecolor:on", "diag"))
+
+        expected = "\x1b[1m"
+        self.assertIn(expected, out)
+
+
+if __name__ == "__main__":
+    from simpletap import TAPTestRunner
+    unittest.main(testRunner=TAPTestRunner())
+
+# vim: ai sts=4 et sw=4