diff --git a/source/gameengine/Ketsji/KX_Scene.cpp b/source/gameengine/Ketsji/KX_Scene.cpp
index 891cd9b3d85..200883a094c 100644
--- a/source/gameengine/Ketsji/KX_Scene.cpp
+++ b/source/gameengine/Ketsji/KX_Scene.cpp
@@ -431,6 +431,11 @@ void KX_Scene::RemoveNodeDestructObject(class SG_IObject* node,class CValue* gam
 
 KX_GameObject* KX_Scene::AddNodeReplicaObject(class SG_IObject* node, class CValue* gameobj)
 {
+	// for group duplication, limit the duplication of the hierarchy to the
+	// objects that are part of the group. 
+	if (!IsObjectInGroup(gameobj))
+		return NULL;
+	
 	KX_GameObject* orgobj = (KX_GameObject*)gameobj;
 	KX_GameObject* newobj = (KX_GameObject*)orgobj->GetReplica();
 	m_map_gameobject_to_replica.insert(orgobj, newobj);
@@ -545,7 +550,9 @@ void KX_Scene::ReplicateLogic(KX_GameObject* newobj)
 			if (!newsensorobj)
 			{
 				// no, then the sensor points outside the hierachy, keep it the same
-				m_logicmgr->RegisterToSensor(cont,oldsensor);
+				if (m_objectlist->SearchValue(oldsensorobj))
+					// only replicate links that points to active objects
+					m_logicmgr->RegisterToSensor(cont,oldsensor);
 			}
 			else
 			{
@@ -583,7 +590,9 @@ void KX_Scene::ReplicateLogic(KX_GameObject* newobj)
 			if (!newactuatorobj)
 			{
 				// no, then the sensor points outside the hierachy, keep it the same
-				m_logicmgr->RegisterToActuator(cont,oldactuator);
+				if (m_objectlist->SearchValue(oldactuatorobj))
+					// only replicate links that points to active objects
+					m_logicmgr->RegisterToActuator(cont,oldactuator);
 			}
 			else
 			{
@@ -615,6 +624,7 @@ void KX_Scene::DupliGroupRecurse(CValue* obj, int level)
 {
 	KX_GameObject* groupobj = (KX_GameObject*) obj;
 	KX_GameObject* replica;
+	KX_GameObject* gameobj;
 	Object* blgroupobj = groupobj->GetBlenderObject();
 	Group* group;
 	GroupObject *go;
@@ -628,6 +638,10 @@ void KX_Scene::DupliGroupRecurse(CValue* obj, int level)
 	m_logicHierarchicalGameObjects.clear();
 	m_map_gameobject_to_replica.clear();
 	m_ueberExecutionPriority++;
+	// for groups will do something special: 
+	// we will force the creation of objects to those in the group only
+	// Again, this is match what Blender is doing (it doesn't care of parent relationship)
+	m_groupGameObjects.clear();
 
 	group = blgroupobj->dup_group;
 	for(go=(GroupObject*)group->gobject.first; go; go=(GroupObject*)go->next) 
@@ -636,13 +650,25 @@ void KX_Scene::DupliGroupRecurse(CValue* obj, int level)
 		if (blgroupobj == blenderobj)
 			// this check is also in group_duplilist()
 			continue;
-		KX_GameObject* gameobj = m_sceneConverter->FindGameObject(blenderobj);
+		gameobj = m_sceneConverter->FindGameObject(blenderobj);
 		if (gameobj == NULL) 
 		{
 			// this object has not been converted!!!
 			// Should not happen as dupli group are created automatically 
 			continue;
 		}
+		if (blenderobj->lay & group->layer==0)
+		{
+			// object is not visible in the 3D view, will not be instantiated
+			continue;
+		}
+		m_groupGameObjects.insert(gameobj);
+	}
+
+	set<CValue*>::iterator oit;
+	for (oit=m_groupGameObjects.begin(); oit != m_groupGameObjects.end(); oit++)
+	{
+		gameobj = (KX_GameObject*)(*oit);
 		if (gameobj->GetParent() != NULL)
 		{
 			// this object is not a top parent. Either it is the child of another
@@ -651,11 +677,6 @@ void KX_Scene::DupliGroupRecurse(CValue* obj, int level)
 			// is inconsistent, skip it anyway
 			continue;
 		}
-		if (blenderobj->lay & group->layer==0)
-		{
-			// object is not visible in the 3D view, will not be instantiated
-			continue;
-		}
 		replica = (KX_GameObject*) AddNodeReplicaObject(NULL,gameobj);
 		// add to 'rootparent' list (this is the list of top hierarchy objects, updated each frame)
 		m_parentlist->Add(replica->AddRef());
@@ -668,7 +689,8 @@ void KX_Scene::DupliGroupRecurse(CValue* obj, int level)
 		{
 			SG_Node* orgnode = (*childit);
 			SG_Node* childreplicanode = orgnode->GetSGReplica();
-			replica->GetSGNode()->AddChild(childreplicanode);
+			if (childreplicanode)
+				replica->GetSGNode()->AddChild(childreplicanode);
 		}
 		// don't replicate logic now: we assume that the objects in the group can have
 		// logic relationship, even outside parent relationship
@@ -745,6 +767,7 @@ SCA_IObject* KX_Scene::AddReplicaObject(class CValue* originalobject,
 
 	m_logicHierarchicalGameObjects.clear();
 	m_map_gameobject_to_replica.clear();
+	m_groupGameObjects.clear();
 
 	// todo: place a timebomb in the object, for temporarily objects :)
 	// lifespan of zero means 'this object lives forever'
@@ -778,7 +801,8 @@ SCA_IObject* KX_Scene::AddReplicaObject(class CValue* originalobject,
 	{
 		SG_Node* orgnode = (*childit);
 		SG_Node* childreplicanode = orgnode->GetSGReplica();
-		replica->GetSGNode()->AddChild(childreplicanode);
+		if (childreplicanode)
+			replica->GetSGNode()->AddChild(childreplicanode);
 	}
 
 	//	relink any pointers as necessary, sort of a temporary solution
diff --git a/source/gameengine/Ketsji/KX_Scene.h b/source/gameengine/Ketsji/KX_Scene.h
index 374545f9a90..80a2abe287a 100644
--- a/source/gameengine/Ketsji/KX_Scene.h
+++ b/source/gameengine/Ketsji/KX_Scene.h
@@ -216,6 +216,16 @@ protected:
 	 */
 	std::vector<KX_GameObject*>	m_logicHierarchicalGameObjects;
 	
+	/**
+	 * This temporary variable will contain the list of 
+	 * object that can be added during group instantiation.
+	 * objects outside this list will not be added (can 
+	 * happen with children that are outside the group).
+	 * Used in AddReplicaObject. If the list is empty, it
+	 * means don't care.
+	 */
+	std::set<CValue*>	m_groupGameObjects;
+	
 	/** 
 	 * Pointer to system variable passed in in constructor
 	 * only used in constructor so we do not need to keep it
@@ -292,6 +302,11 @@ public:
 	 */
 	void UpdateParents(double curtime);
 	void DupliGroupRecurse(CValue* gameobj, int level);
+	bool IsObjectInGroup(CValue* gameobj)
+	{ 
+		return (m_groupGameObjects.empty() || 
+				m_groupGameObjects.find(gameobj) != m_groupGameObjects.end());
+	}
 	SCA_IObject* AddReplicaObject(CValue* gameobj,
 								  CValue* locationobj,
 								  int lifespan=0);
diff --git a/source/gameengine/SceneGraph/SG_IObject.cpp b/source/gameengine/SceneGraph/SG_IObject.cpp
index c347bbc6d9a..d0bdac5c8f0 100644
--- a/source/gameengine/SceneGraph/SG_IObject.cpp
+++ b/source/gameengine/SceneGraph/SG_IObject.cpp
@@ -104,7 +104,7 @@ SetSGClientObject(
 }
 
 
-	void
+	bool
 SG_IObject::
 ActivateReplicationCallback(
 	SG_IObject *replica
@@ -112,8 +112,10 @@ ActivateReplicationCallback(
 	if (m_callbacks.m_replicafunc)
 	{
 		// Call client provided replication func
-		m_callbacks.m_replicafunc(replica,m_SGclientObject,m_SGclientInfo);
+		if (m_callbacks.m_replicafunc(replica,m_SGclientObject,m_SGclientInfo) == NULL)
+			return false;
 	}
+	return true;
 };	
 
 	void
diff --git a/source/gameengine/SceneGraph/SG_IObject.h b/source/gameengine/SceneGraph/SG_IObject.h
index 438ab48c556..7f6bdfbbb1c 100644
--- a/source/gameengine/SceneGraph/SG_IObject.h
+++ b/source/gameengine/SceneGraph/SG_IObject.h
@@ -202,7 +202,7 @@ public:
 
 protected :
 
-		void
+		bool
 	ActivateReplicationCallback(
 		SG_IObject *replica
 	);
diff --git a/source/gameengine/SceneGraph/SG_Node.cpp b/source/gameengine/SceneGraph/SG_Node.cpp
index 4e90d7c4653..8de7ac83477 100644
--- a/source/gameengine/SceneGraph/SG_Node.cpp
+++ b/source/gameengine/SceneGraph/SG_Node.cpp
@@ -68,7 +68,7 @@ SG_Node* SG_Node::GetSGReplica()
 	SG_Node* replica = new SG_Node(*this);
 	if (replica == NULL) return NULL;
 
-	ProcessSGReplica(replica);
+	ProcessSGReplica(&replica);
 	
 	return replica;
 }
@@ -76,25 +76,42 @@ SG_Node* SG_Node::GetSGReplica()
 	void 
 SG_Node::
 ProcessSGReplica(
-	SG_Node* replica
+	SG_Node** replica
 ){
 	// Apply the replication call back function.
-	ActivateReplicationCallback(replica);
+	if (!ActivateReplicationCallback(*replica)) 
+	{
+		delete (*replica);
+		*replica = NULL;
+		return;
+	}
 
 	// clear the replica node of it's parent.
-	static_cast<SG_Node*>(replica)->m_SGparent = NULL;
+	static_cast<SG_Node*>(*replica)->m_SGparent = NULL;
 
 	if (m_children.begin() != m_children.end())
 	{
 		// if this node has children, the replica has too, so clear and clone children
-		replica->ClearSGChildren();
+		(*replica)->ClearSGChildren();
 	
 		NodeList::iterator childit;
 		for (childit = m_children.begin();childit!=m_children.end();++childit)
 		{
-			replica->AddChild((*childit)->GetSGReplica());
+			SG_Node* childnode = (*childit)->GetSGReplica();
+			if (childnode)
+				(*replica)->AddChild(childnode);
 		}
 	}
+	// Nodes without children and without client object are
+	// not worth to keep, they will just take up CPU
+	// This can happen in partial replication of hierarchy
+	// during group duplication.
+	if ((*replica)->m_children.empty() && 
+		(*replica)->GetSGClientObject() == NULL)
+	{
+		delete (*replica);
+		*replica = NULL;
+	}
 }
 
 
diff --git a/source/gameengine/SceneGraph/SG_Node.h b/source/gameengine/SceneGraph/SG_Node.h
index f86e3046d93..ffaaad861e2 100644
--- a/source/gameengine/SceneGraph/SG_Node.h
+++ b/source/gameengine/SceneGraph/SG_Node.h
@@ -205,7 +205,7 @@ private:
 
 		void		
 	ProcessSGReplica(
-		SG_Node* replica
+		SG_Node** replica
 	);
 
 	/**