I have further information that may help track down the source of this problem. The SML shell script in question consisted of #!/bin/sh <MS-DOS exe> <args> 2>/dev/null When I removed the re-direct of stderr, the problem disappeared! Inferior SML mode now works again. However, other MS-DOS binaries (such as texify.exe from MikTeX) still exhibit the problem. I have also observed that signals do not appear to be working properly with inferior modes. In particular sending an interrupt signal causes emacs to respond in the minibuffer with Kill (nnn, 2) failed: operation not permitted. Robert Harper