diff --git a/wp-admin/admin-ajax.php b/wp-admin/admin-ajax.php
index 139780500b..7218be8e49 100644
--- a/wp-admin/admin-ajax.php
+++ b/wp-admin/admin-ajax.php
@@ -125,6 +125,28 @@ case 'add-category' : // On the Fly
 	}
 	$x->send();
 	break;
+case 'add-link-category' : // On the Fly
+	if ( !current_user_can( 'manage_categories' ) )
+		die('-1');
+	$names = explode(',', $_POST['newcat']);
+	$x = new WP_Ajax_Response();
+	foreach ( $names as $cat_name ) {
+		$cat_name = trim($cat_name);
+		if ( !$slug = sanitize_title($cat_name) )
+			die('0');
+		if ( !$cat_id = category_exists( $cat_name ) ) {
+			$cat_id = wp_insert_term( $cat_name, 'link_category' );
+			$cat_id = $cat_id['term_id'];
+		}
+		$cat_name = wp_specialchars(stripslashes($cat_name));
+		$x->add( array(
+			'what' => 'link-category',
+			'id' => $cat_id,
+			'data' => "<li id='link-category-$cat_id'><label for='in-link-category-$cat_id' class='selectit'><input value='$cat_id' type='checkbox' checked='checked' name='link_category[]' id='in-link-category-$cat_id'/> $cat_name</label></li>"
+		) );
+	}
+	$x->send();
+	break;
 case 'add-cat' : // From Manage->Categories
 	if ( !current_user_can( 'manage_categories' ) )
 		die('-1');
diff --git a/wp-admin/edit-link-form.php b/wp-admin/edit-link-form.php
index 91c1a31763..1527688b19 100644
--- a/wp-admin/edit-link-form.php
+++ b/wp-admin/edit-link-form.php
@@ -43,7 +43,7 @@ function xfn_check($class, $value = '', $type = 'check') {
 <h3 class="dbx-handle"><?php _e('Categories') ?></h3>
 <div class="dbx-content">
 <p id="jaxcat"></p>
-<ul id="categorychecklist"><?php dropdown_link_categories(get_option('default_link_category')); ?></ul>
+<ul id="linkcategorychecklist"><?php dropdown_link_categories(get_option('default_link_category')); ?></ul>
 </div>
 </fieldset>
 
diff --git a/wp-admin/includes/bookmark.php b/wp-admin/includes/bookmark.php
index 490a9e41f5..36cb2edb1c 100644
--- a/wp-admin/includes/bookmark.php
+++ b/wp-admin/includes/bookmark.php
@@ -13,7 +13,6 @@ function edit_link( $link_id = '' ) {
 	$_POST['link_name'] = wp_specialchars( $_POST['link_name'] );
 	$_POST['link_image'] = wp_specialchars( $_POST['link_image'] );
 	$_POST['link_rss'] = clean_url($_POST['link_rss']);
-	$_POST['link_category'] = $_POST['post_category'];
 
 	if ( !empty( $link_id ) ) {
 		$_POST['link_id'] = $link_id;
diff --git a/wp-admin/includes/taxonomy.php b/wp-admin/includes/taxonomy.php
index 2f04328b89..39fb0abc91 100644
--- a/wp-admin/includes/taxonomy.php
+++ b/wp-admin/includes/taxonomy.php
@@ -5,7 +5,10 @@
 //
 
 function category_exists($cat_name) {
-	return is_term($cat_name, 'category');
+	$id = is_term($cat_name, 'category');
+	if ( is_array($id) )
+		$id = $id['term_id'];
+	return $id;
 }
 
 function get_category_to_edit( $id ) {
diff --git a/wp-admin/includes/template.php b/wp-admin/includes/template.php
index 0721fc26f8..857bdaa600 100644
--- a/wp-admin/includes/template.php
+++ b/wp-admin/includes/template.php
@@ -157,7 +157,7 @@ function dropdown_link_categories( $default = 0 ) {
 		$cat_id = $category->term_id;
 		$name = wp_specialchars( apply_filters('the_category', $category->name));
 		$checked = in_array( $cat_id, $checked_categories );
-		echo '<li id="category-', $cat_id, '"><label for="in-category-', $cat_id, '" class="selectit"><input value="', $cat_id, '" type="checkbox" name="post_category[]" id="in-category-', $cat_id, '"', ($checked ? ' checked="checked"' : "" ), '/> ', $name, "</label></li>";
+		echo '<li id="link-category-', $cat_id, '"><label for="in-link-category-', $cat_id, '" class="selectit"><input value="', $cat_id, '" type="checkbox" name="link_category[]" id="in-link-category-', $cat_id, '"', ($checked ? ' checked="checked"' : "" ), '/> ', $name, "</label></li>";
 	}
 }
 
diff --git a/wp-admin/js/link-cat.js b/wp-admin/js/link-cat.js
new file mode 100644
index 0000000000..a0775ce158
--- /dev/null
+++ b/wp-admin/js/link-cat.js
@@ -0,0 +1,10 @@
+addLoadEvent(function(){linkcatList=new listMan('linkcategorychecklist');linkcatList.ajaxRespEl='jaxcat';linkcatList.topAdder=1;linkcatList.alt=0;linkcatList.showLink=0;});
+addLoadEvent(newLinkCatAddIn);
+function newLinkCatAddIn() {
+	var jaxcat = $('jaxcat');
+	if ( !jaxcat )
+		return false;
+	Element.update(jaxcat,'<span id="ajaxcat"><input type="text" name="newcat" id="newcat" size="16" autocomplete="off"/><input type="button" name="Button" id="catadd" value="' + linkcatL10n.add + '"/><input type="hidden"/><span id="howto">' + linkcatL10n.how + '</span></span>');
+	$('newcat').onkeypress = function(e) { return killSubmit("linkcatList.ajaxAdder('link-category','jaxcat');", e); };
+	$('catadd').onclick = function() { linkcatList.ajaxAdder('link-category', 'jaxcat'); };
+}
diff --git a/wp-admin/link-add.php b/wp-admin/link-add.php
index 1e48fe8547..2b06d8ec0b 100644
--- a/wp-admin/link-add.php
+++ b/wp-admin/link-add.php
@@ -13,7 +13,7 @@ wp_reset_vars(array('action', 'cat_id', 'linkurl', 'name', 'image',
 
 wp_enqueue_script( array('xfn', 'dbx-admin-key?pagenow=link.php') );
 if ( current_user_can( 'manage_categories' ) )
-	wp_enqueue_script( 'ajaxcat' );
+	wp_enqueue_script( 'ajaxlinkcat' );
 require('admin-header.php');
 ?>
 
diff --git a/wp-admin/link.php b/wp-admin/link.php
index 425e912cfc..464943a8f0 100644
--- a/wp-admin/link.php
+++ b/wp-admin/link.php
@@ -93,7 +93,7 @@ switch ($action) {
 	case 'edit' :
 		wp_enqueue_script( array('xfn', 'dbx-admin-key?pagenow=link.php') );
 		if ( current_user_can( 'manage_categories' ) )
-			wp_enqueue_script( 'ajaxcat' );
+			wp_enqueue_script( 'ajaxlinkcat' );
 		$parent_file = 'link-manager.php';
 		$submenu_file = 'link-manager.php';
 		$title = __('Edit Link');
diff --git a/wp-includes/script-loader.php b/wp-includes/script-loader.php
index 6ab9c54440..00ddc47dd4 100644
--- a/wp-includes/script-loader.php
+++ b/wp-includes/script-loader.php
@@ -109,6 +109,11 @@ class WP_Scripts {
 				'add' => attribute_escape(__('Add')),
 				'how' => __('Separate multiple categories with commas.')
 			) );
+			$this->add( 'ajaxlinkcat', '/wp-admin/js/link-cat.js', array('listman'), '200700601' );
+			$this->localize( 'ajaxlinkcat', 'linkcatL10n', array(
+				'add' => attribute_escape(__('Add')),
+				'how' => __('Separate multiple categories with commas.')
+			) );
 			$this->add( 'admin-categories', '/wp-admin/js/categories.js', array('listman'), '3684' );
 			$this->add( 'admin-custom-fields', '/wp-admin/js/custom-fields.js', array('listman'), '3733' );
 			$this->add( 'admin-comments', '/wp-admin/js/edit-comments.js', array('listman'), '20070327' );