diff --git a/drivers/xen/balloon.c b/drivers/xen/balloon.c
index f54290b..5dfd8f8 100644
--- a/drivers/xen/balloon.c
+++ b/drivers/xen/balloon.c
@@ -4,6 +4,12 @@
  * Copyright (c) 2003, B Dragovic
  * Copyright (c) 2003-2004, M Williamson, K Fraser
  * Copyright (c) 2005 Dan M. Smith, IBM Corporation
+ * Copyright (c) 2010 Daniel Kiper
+ *
+ * Memory hotplug support was written by Daniel Kiper. Work on
+ * it was sponsored by Google under Google Summer of Code 2010
+ * program. Jeremy Fitzhardinge from Citrix was the mentor for
+ * this project.
  *
  * This program is free software; you can redistribute it and/or
  * modify it under the terms of the GNU General Public License version 2
@@ -40,6 +46,9 @@
 #include <linux/mutex.h>
 #include <linux/list.h>
 #include <linux/gfp.h>
+#include <linux/notifier.h>
+#include <linux/memory.h>
+#include <linux/memory_hotplug.h>
 
 #include <asm/page.h>
 #include <asm/pgalloc.h>
@@ -194,6 +203,87 @@
 	return BP_EAGAIN;
 }
 
+#ifdef CONFIG_XEN_BALLOON_MEMORY_HOTPLUG
+static long current_credit(void)
+{
+	return balloon_stats.target_pages - balloon_stats.current_pages -
+		balloon_stats.hotplug_pages;
+}
+
+static bool balloon_is_inflated(void)
+{
+	if (balloon_stats.balloon_low || balloon_stats.balloon_high ||
+			balloon_stats.balloon_hotplug)
+		return true;
+	else
+		return false;
+}
+
+/*
+ * reserve_additional_memory() adds memory region of size >= credit above
+ * max_pfn. New region is section aligned and size is modified to be multiple
+ * of section size. Those features allow optimal use of address space and
+ * establish proper alignment when this function is called first time after
+ * boot (last section not fully populated at boot time contains unused memory
+ * pages with PG_reserved bit not set; online_pages_range() does not allow page
+ * onlining in whole range if first onlined page does not have PG_reserved
+ * bit set). Real size of added memory is established at page onlining stage.
+ */
+
+static enum bp_state reserve_additional_memory(long credit)
+{
+	int nid, rc;
+	u64 hotplug_start_paddr;
+	unsigned long balloon_hotplug = credit;
+
+	hotplug_start_paddr = PFN_PHYS(SECTION_ALIGN_UP(max_pfn));
+	balloon_hotplug = round_up(balloon_hotplug, PAGES_PER_SECTION);
+	nid = memory_add_physaddr_to_nid(hotplug_start_paddr);
+
+	rc = add_memory(nid, hotplug_start_paddr, balloon_hotplug << PAGE_SHIFT);
+
+	if (rc) {
+		pr_info("xen_balloon: %s: add_memory() failed: %i\n", __func__, rc);
+		return BP_EAGAIN;
+	}
+
+	balloon_hotplug -= credit;
+
+	balloon_stats.hotplug_pages += credit;
+	balloon_stats.balloon_hotplug = balloon_hotplug;
+
+	return BP_DONE;
+}
+
+static void xen_online_page(struct page *page)
+{
+	__online_page_set_limits(page);
+
+	mutex_lock(&balloon_mutex);
+
+	__balloon_append(page);
+
+	if (balloon_stats.hotplug_pages)
+		--balloon_stats.hotplug_pages;
+	else
+		--balloon_stats.balloon_hotplug;
+
+	mutex_unlock(&balloon_mutex);
+}
+
+static int xen_memory_notifier(struct notifier_block *nb, unsigned long val, void *v)
+{
+	if (val == MEM_ONLINE)
+		schedule_delayed_work(&balloon_worker, 0);
+
+	return NOTIFY_OK;
+}
+
+static struct notifier_block xen_memory_nb = {
+	.notifier_call = xen_memory_notifier,
+	.priority = 0
+};
+#else
 static long current_credit(void)
 {
 	unsigned long target = balloon_stats.target_pages;
@@ -206,6 +296,21 @@
 	return target - balloon_stats.current_pages;
 }
 
+static bool balloon_is_inflated(void)
+{
+	if (balloon_stats.balloon_low || balloon_stats.balloon_high)
+		return true;
+	else
+		return false;
+}
+
+static enum bp_state reserve_additional_memory(long credit)
+{
+	balloon_stats.target_pages = balloon_stats.current_pages;
+	return BP_DONE;
+}
+#endif /* CONFIG_XEN_BALLOON_MEMORY_HOTPLUG */
+
 static enum bp_state increase_reservation(unsigned long nr_pages)
 {
 	int rc;
@@ -217,6 +322,15 @@
 		.domid        = DOMID_SELF
 	};
 
+#ifdef CONFIG_XEN_BALLOON_MEMORY_HOTPLUG
+	if (!balloon_stats.balloon_low && !balloon_stats.balloon_high) {
+		nr_pages = min(nr_pages, balloon_stats.balloon_hotplug);
+		balloon_stats.hotplug_pages += nr_pages;
+		balloon_stats.balloon_hotplug -= nr_pages;
+		return BP_DONE;
+	}
+#endif
+
 	if (nr_pages > ARRAY_SIZE(frame_list))
 		nr_pages = ARRAY_SIZE(frame_list);
 
@@ -279,6 +393,15 @@
 		.domid        = DOMID_SELF
 	};
 
+#ifdef CONFIG_XEN_BALLOON_MEMORY_HOTPLUG
+	if (balloon_stats.hotplug_pages) {
+		nr_pages = min(nr_pages, balloon_stats.hotplug_pages);
+		balloon_stats.hotplug_pages -= nr_pages;
+		balloon_stats.balloon_hotplug += nr_pages;
+		return BP_DONE;
+	}
+#endif
+
 	if (nr_pages > ARRAY_SIZE(frame_list))
 		nr_pages = ARRAY_SIZE(frame_list);
 
@@ -340,8 +463,12 @@
 	do {
 		credit = current_credit();
 
-		if (credit > 0)
-			state = increase_reservation(credit);
+		if (credit > 0) {
+			if (balloon_is_inflated())
+				state = increase_reservation(credit);
+			else
+				state = reserve_additional_memory(credit);
+		}
 
 		if (credit < 0)
 			state = decrease_reservation(-credit, GFP_BALLOON);
@@ -448,6 +575,14 @@
 	balloon_stats.retry_count = 1;
 	balloon_stats.max_retry_count = RETRY_UNLIMITED;
 
+#ifdef CONFIG_XEN_BALLOON_MEMORY_HOTPLUG
+	balloon_stats.hotplug_pages = 0;
+	balloon_stats.balloon_hotplug = 0;
+
+	set_online_page_callback(&xen_online_page);
+	register_memory_notifier(&xen_memory_nb);
+#endif
+
 	/*
 	 * Initialise the balloon with excess memory space.  We need
 	 * to make sure we don't add memory which doesn't exist or