diff --git a/Gruntfile.js b/Gruntfile.js
index 597337ae5..ca01292f8 100644
--- a/Gruntfile.js
+++ b/Gruntfile.js
@@ -119,7 +119,7 @@ module.exports = function(grunt) {
                     "editor/js/ui/palette.js",
                     "editor/js/ui/tab-info.js",
                     "editor/js/ui/tab-config.js",
-                    "editor/js/ui/tab-palette.js",
+                    "editor/js/ui/palette-editor.js",
                     "editor/js/ui/editor.js",
                     "editor/js/ui/tray.js",
                     "editor/js/ui/clipboard.js",
diff --git a/editor/js/main.js b/editor/js/main.js
index 3e1b55761..06fd8cf9f 100644
--- a/editor/js/main.js
+++ b/editor/js/main.js
@@ -56,11 +56,9 @@ var RED = (function() {
             success: function(data) {
                 $("body").append(data);
                 $("body").i18n();
-
-
                 $(".palette-spinner").hide();
-                $(".palette-scroll").show();
-                $("#palette-search").show();
+                $(".palette-scroll").removeClass("hide");
+                $("#palette-search").removeClass("hide");
                 loadFlows();
             }
         });
diff --git a/editor/js/nodes.js b/editor/js/nodes.js
index 32085802c..8a6a50c03 100644
--- a/editor/js/nodes.js
+++ b/editor/js/nodes.js
@@ -32,12 +32,22 @@ RED.nodes = (function() {
     }
 
     var registry = (function() {
+        var moduleList = {};
         var nodeList = [];
         var nodeSets = {};
         var typeToId = {};
         var nodeDefinitions = {};
 
         var exports = {
+            getModule: function(module) {
+                return moduleList[module];
+            },
+            getNodeSetForType: function(nodeType) {
+                return exports.getNodeSet(typeToId[nodeType]);
+            },
+            getModuleList: function() {
+                return moduleList;
+            },
             getNodeList: function() {
                 return nodeList;
             },
@@ -55,27 +65,38 @@ RED.nodes = (function() {
                     typeToId[ns.types[j]] = ns.id;
                 }
                 nodeList.push(ns);
+
+                moduleList[ns.module] = moduleList[ns.module] || {
+                    name:ns.module,
+                    version:ns.version,
+                    local:ns.local,
+                    sets:{}
+                };
+                moduleList[ns.module].sets[ns.name] = ns;
+                RED.events.emit("registry:node-set-added",ns);
             },
             removeNodeSet: function(id) {
                 var ns = nodeSets[id];
                 for (var j=0;j<ns.types.length;j++) {
-                    if (ns.added) {
-                        // TODO: too tightly coupled into palette UI
-                        RED.palette.remove(ns.types[j]);
-                        var def = nodeDefinitions[ns.types[j]];
-                        if (def.onpaletteremove && typeof def.onpaletteremove === "function") {
-                            def.onpaletteremove.call(def);
-                        }
-                    }
                     delete typeToId[ns.types[j]];
                 }
                 delete nodeSets[id];
                 for (var i=0;i<nodeList.length;i++) {
-                    if (nodeList[i].id == id) {
+                    if (nodeList[i].id === id) {
                         nodeList.splice(i,1);
                         break;
                     }
                 }
+                for (i=0;i<moduleList[ns.module].sets.length;i++) {
+                    if (moduleList[ns.module].sets[i].id === id) {
+                        moduleList[ns.module].sets[i].splice(i,1);
+                        break;
+                    }
+                }
+                if (moduleList[ns.module].sets.length === 0) {
+                    delete moduleList[ns.module];
+                }
+                RED.events.emit("registry:node-set-removed",ns);
                 return ns;
             },
             getNodeSet: function(id) {
@@ -84,32 +105,19 @@ RED.nodes = (function() {
             enableNodeSet: function(id) {
                 var ns = nodeSets[id];
                 ns.enabled = true;
-                for (var j=0;j<ns.types.length;j++) {
-                    // TODO: too tightly coupled into palette UI
-                    RED.palette.show(ns.types[j]);
-                    var def = nodeDefinitions[ns.types[j]];
-                    if (def.onpaletteadd && typeof def.onpaletteadd === "function") {
-                        def.onpaletteadd.call(def);
-                    }
-                }
+                RED.events.emit("registry:node-set-enabled",ns);
             },
             disableNodeSet: function(id) {
                 var ns = nodeSets[id];
                 ns.enabled = false;
-                for (var j=0;j<ns.types.length;j++) {
-                    // TODO: too tightly coupled into palette UI
-                    RED.palette.hide(ns.types[j]);
-                    var def = nodeDefinitions[ns.types[j]];
-                    if (def.onpaletteremove && typeof def.onpaletteremove === "function") {
-                        def.onpaletteremove.call(def);
-                    }
-                }
+                RED.events.emit("registry:node-set-disabled",ns);
             },
             registerNodeType: function(nt,def) {
                 nodeDefinitions[nt] = def;
                 if (def.category != "subflows") {
                     def.set = nodeSets[typeToId[nt]];
                     nodeSets[typeToId[nt]].added = true;
+                    nodeSets[typeToId[nt]].enabled = true;
 
                     var ns;
                     if (def.set.module === "node-red") {
@@ -127,10 +135,7 @@ RED.nodes = (function() {
 
                     // TODO: too tightly coupled into palette UI
                 }
-                RED.palette.add(nt,def);
-                if (def.onpaletteadd && typeof def.onpaletteadd === "function") {
-                    def.onpaletteadd.call(def);
-                }
+                RED.events.emit("registry:node-type-added",nt);
             },
             removeNodeType: function(nt) {
                 if (nt.substring(0,8) != "subflow:") {
@@ -138,7 +143,7 @@ RED.nodes = (function() {
                     throw new Error("this api is subflow only. called with:",nt);
                 }
                 delete nodeDefinitions[nt];
-                RED.palette.remove(nt);
+                RED.events.emit("registry:node-type-removed",nt);
             },
             getNodeType: function(nt) {
                 return nodeDefinitions[nt];
diff --git a/editor/js/ui/editableList.js b/editor/js/ui/editableList.js
index 921721610..a889f52ab 100644
--- a/editor/js/ui/editableList.js
+++ b/editor/js/ui/editableList.js
@@ -67,6 +67,20 @@
                     });
             }
 
+            if (this.element.css("position") === "absolute") {
+                this.element.css("position","static");
+                this.topContainer.css("position","absolute");
+                this.uiContainer.css("position","absolute");
+
+                ["top","left","bottom","right"].forEach(function(s) {
+                    var v = that.element.css(s);
+                    if (s!=="auto" && s!=="") {
+                        that.topContainer.css(s,v);
+                        that.uiContainer.css(s,"0");
+                        that.element.css(s,'auto');
+                    }
+                })
+            }
             this.uiContainer.addClass("red-ui-editableList-container");
 
             this.uiHeight = this.element.height();
@@ -152,7 +166,23 @@
         addItem: function(data) {
             var that = this;
             data = data || {};
-            var li = $('<li>').appendTo(this.element);
+            var li = $('<li>');
+            var added = false;
+            if (this.options.sort) {
+                var items = this.items();
+                var skip = false;
+                items.each(function(i,el) {
+                    if (added) { return }
+                    var itemData = el.data('data');
+                    if (that.options.sort(data,itemData) < 0) {
+                         li.insertBefore(el.closest("li"));
+                         added = true;
+                    }
+                });
+            }
+            if (!added) {
+                li.appendTo(this.element);
+            }
             var row = $('<div/>').addClass("red-ui-editableList-item-content").appendTo(li);
             row.data('data',data);
             if (this.options.sortable === true) {
diff --git a/editor/js/ui/palette-editor.js b/editor/js/ui/palette-editor.js
new file mode 100644
index 000000000..310e07539
--- /dev/null
+++ b/editor/js/ui/palette-editor.js
@@ -0,0 +1,317 @@
+/**
+ * Copyright 2016 IBM Corp.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ **/
+RED.palette.editor = (function() {
+
+    var nodeList;
+    var typesInUse = {};
+
+    var nodeEntries = {};
+
+    var eventTimers = {};
+
+    function changeNodeState(id,state,callback) {
+        $.ajax({
+            url:"nodes/"+id,
+            type: "PUT",
+            data: JSON.stringify({
+                enabled: state
+            }),
+            contentType: "application/json; charset=utf-8"
+        }).done(function(data,textStatus,xhr) {
+            callback();
+        }).fail(function(xhr,textStatus,err) {
+            callback(xhr);
+        })
+    }
+    function refreshNodeModule(module) {
+        if (!eventTimers.hasOwnProperty(module)) {
+            eventTimers[module] = setTimeout(function() {
+                delete eventTimers[module];
+                _refreshNodeModule(module);
+            },100);
+        }
+    }
+
+
+    function getContrastingBorder(rgbColor){
+        var parts = /^rgba?\(\s*(\d+),\s*(\d+),\s*(\d+)[,)]/.exec(rgbColor);
+        if (parts) {
+            var r = parseInt(parts[1]);
+            var g = parseInt(parts[2]);
+            var b = parseInt(parts[3]);
+            var yiq = ((r*299)+(g*587)+(b*114))/1000;
+            if (yiq > 160) {
+                r = Math.floor(r*0.8);
+                g = Math.floor(g*0.8);
+                b = Math.floor(b*0.8);
+                return "rgb("+r+","+g+","+b+")";
+            }
+        }
+        return rgbColor;
+    }
+
+
+    function _refreshNodeModule(module) {
+        if (!nodeEntries.hasOwnProperty(module)) {
+            nodeEntries[module] = {info:RED.nodes.registry.getModule(module)};
+            nodeList.editableList('addItem', nodeEntries[module]);
+            //console.log(nodeList.editableList('items'));
+
+        } else {
+            var moduleInfo = nodeEntries[module].info;
+            var nodeEntry = nodeEntries[module].elements;
+            if (nodeEntry) {
+                var activeTypeCount = 0;
+                var typeCount = 0;
+                nodeEntries[module].totalUseCount = 0;
+                nodeEntries[module].setUseCount = {};
+
+                for (var setName in moduleInfo.sets) {
+                    if (moduleInfo.sets.hasOwnProperty(setName)) {
+                        var inUseCount = 0;
+                        var set = moduleInfo.sets[setName];
+                        var setElements = nodeEntry.sets[setName];
+
+                        if (set.enabled) {
+                            activeTypeCount += set.types.length;
+                        }
+                        typeCount += set.types.length;
+                        for (var i=0;i<moduleInfo.sets[setName].types.length;i++) {
+                            var t = moduleInfo.sets[setName].types[i];
+                            inUseCount += (typesInUse[t]||0);
+                            var swatch = setElements.swatches[t];
+                            if (set.enabled) {
+                                var def = RED.nodes.getType(t);
+                                if (def && def.color) {
+                                    swatch.css({background:def.color});
+                                    swatch.css({border: "1px solid "+getContrastingBorder(swatch.css('backgroundColor'))})
+
+                                } else {
+                                    swatch.css({background:"#eee",border:"1px dashed #999"})
+                                }
+                            } else {
+                                swatch.css({background:"#eee",border:"1px dashed #999"})
+                            }
+                        }
+                        nodeEntries[module].setUseCount[setName] = inUseCount;
+                        nodeEntries[module].totalUseCount += inUseCount;
+
+                        if (inUseCount > 0) {
+                            setElements.enableButton.html('in use');
+                            setElements.enableButton.addClass('disabled');
+                        } else {
+                            setElements.enableButton.removeClass('disabled');
+                            if (set.enabled) {
+                                setElements.enableButton.html('disable');
+                            } else {
+                                setElements.enableButton.html('enable');
+                            }
+                        }
+                        setElements.setRow.toggleClass("palette-module-set-disabled",!set.enabled);
+                    }
+                }
+                var nodeCount = (activeTypeCount === typeCount)?typeCount:activeTypeCount+" / "+typeCount;
+                nodeEntry.setCount.html(nodeCount+" node"+(typeCount>1?"s":""));
+
+                if (nodeEntries[module].totalUseCount > 0) {
+                    nodeEntry.enableButton.html("in use");
+                    nodeEntry.enableButton.addClass('disabled');
+                    nodeEntry.removeButton.hide();
+                } else {
+                    nodeEntry.enableButton.removeClass('disabled');
+                    nodeEntry.removeButton.show();
+                    if (activeTypeCount === 0) {
+                        nodeEntry.enableButton.html("enable all");
+                    } else {
+                        nodeEntry.enableButton.html("disable all");
+                    }
+                    nodeEntry.container.toggleClass("disabled",(activeTypeCount === 0));
+                }
+            }
+        }
+
+    }
+    function showPaletteEditor() {
+        $("#header-shade").show();
+        $("#editor-shade").show();
+        $("#sidebar-shade").show();
+        $("#main-container").addClass("palette-expanded");
+    }
+    function hidePaletteEditor() {
+        $("#main-container").removeClass("palette-expanded");
+        $("#header-shade").hide();
+        $("#editor-shade").hide();
+        $("#sidebar-shade").hide();
+    }
+
+    function init() {
+        $("#editor-shade").click(function() {
+            if ($("#main-container").hasClass("palette-expanded")) {
+                hidePaletteEditor();
+            }
+        });
+        $("#palette-edit").on("click",function(e) {
+            if ($("#main-container").hasClass("palette-expanded")) {
+                hidePaletteEditor();
+            } else {
+                showPaletteEditor();
+            }
+        });
+        $("#palette-editor-close").on("click", function(e) {
+            hidePaletteEditor();
+        })
+
+        var divTabs = $('<div>',{style:"position:absolute;top:80px;left:0;right:0;bottom:0"}).appendTo("#palette-editor");
+
+        nodeList = $('<ol>',{id:"palette-module-list", style:"position: absolute;top: 0;bottom: 0;left: 0;right: 0px;"}).appendTo(divTabs).editableList({
+            addButton: false,
+            sort: function(A,B) {
+                return A.info.name.localeCompare(B.info.name);
+            },
+            addItem: function(container,i,object) {
+                var entry = object.info;
+
+                var headerRow = $('<div>',{class:"palette-module-header"}).appendTo(container);
+
+                var titleRow = $('<div>',{class:"palette-module-meta"}).appendTo(headerRow);
+                var chevron = $('<i class="fa fa-cube">').appendTo(titleRow);
+                var title = $('<span>',{class:"palette-module-name"}).html(entry.name).appendTo(titleRow);
+
+                var metaRow = $('<div>',{class:"palette-module-meta"}).appendTo(headerRow);
+                var version = $('<span class="palette-module-version"><i class="fa fa-tag"></i></span>').appendTo(metaRow);
+                $('<span>').html(entry.version).appendTo(version);
+
+
+                var buttonRow = $('<div>',{class:"palette-module-meta"}).appendTo(headerRow);
+
+                var setButton = $('<a href="#" class="editor-button editor-button-small palette-module-set-button"><i class="fa fa-angle-right palette-module-node-chevron"></i> </a>').appendTo(buttonRow);
+                var setCount = $('<span>').appendTo(setButton);
+
+                var buttonGroup = $('<div>',{class:"palette-module-button-group"}).appendTo(buttonRow);
+                var removeButton = $('<a href="#" class="editor-button editor-button-small"></a>').html('remove').appendTo(buttonGroup);
+                if (!entry.local) {
+                    removeButton.hide();
+                }
+                var enableButton = $('<a href="#" class="editor-button editor-button-small"></a>').html('disable all').appendTo(buttonGroup);
+
+                var contentRow = $('<div>',{class:"palette-module-content"}).appendTo(container);
+
+                object.elements = {
+                    removeButton: removeButton,
+                    enableButton: enableButton,
+                    setCount: setCount,
+                    container: container,
+                    sets: {}
+                }
+                setButton.click(function() {
+                    if (container.hasClass('expanded')) {
+                        container.removeClass('expanded');
+                        contentRow.slideUp();
+                    } else {
+                        container.addClass('expanded');
+                        contentRow.slideDown();
+                    }
+                })
+
+                var setList = Object.keys(entry.sets)
+                setList.sort(function(A,B) {
+                    return A.toLowerCase().localeCompare(B.toLowerCase());
+                });
+                setList.forEach(function(setName) {
+                    var set = entry.sets[setName];
+                    var setRow = $('<div>',{class:"palette-module-set"}).appendTo(contentRow);
+                    var buttonGroup = $('<div>',{class:"palette-module-set-button-group"}).appendTo(setRow);
+                    var typeSwatches = {};
+                    set.types.forEach(function(t) {
+                        var typeDiv = $('<div>',{class:"palette-module-type"}).appendTo(setRow);
+                        typeSwatches[t] = $('<span>',{class:"palette-module-type-swatch"}).appendTo(typeDiv);
+                        $('<span>',{class:"palette-module-type-node"}).html(t).appendTo(typeDiv);
+                    })
+
+                    var enableButton = $('<a href="#" class="editor-button editor-button-small"></a>').appendTo(buttonGroup);
+                    enableButton.click(function(evt) {
+                        if (object.setUseCount[setName] === 0) {
+                            var currentSet = RED.nodes.registry.getNodeSet(set.id);
+                            changeNodeState(set.id,!currentSet.enabled,function(xhr){
+                                console.log(xhr)
+                            });
+                        }
+                        evt.preventDefault();
+                    })
+
+                    object.elements.sets[set.name] = {
+                        setRow: setRow,
+                        enableButton: enableButton,
+                        swatches: typeSwatches
+                    };
+                });
+                enableButton.click(function(evt) {
+                    if (object.totalUseCount === 0) {
+                        changeNodeState(entry.name,(container.hasClass('disabled')),function(xhr){
+                            console.log(xhr)
+                        });
+                    }
+                    evt.preventDefault();
+                })
+                refreshNodeModule(entry.name);
+            }
+        });
+
+        RED.events.on('registry:node-set-enabled', function(ns) {
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('registry:node-set-disabled', function(ns) {
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('registry:node-type-added', function(nodeType) {
+            var ns = RED.nodes.registry.getNodeSetForType(nodeType);
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('registry:node-type-removed', function(nodeType) {
+            var ns = RED.nodes.registry.getNodeSetForType(nodeType);
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('registry:node-set-added', function(ns) {
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('registry:node-set-removed', function(ns) {
+            refreshNodeModule(ns.module);
+        });
+        RED.events.on('nodes:add', function(n) {
+            typesInUse[n.type] = (typesInUse[n.type]||0)+1;
+            if (typesInUse[n.type] === 1) {
+                var ns = RED.nodes.registry.getNodeSetForType(n.type);
+                refreshNodeModule(ns.module);
+            }
+        })
+        RED.events.on('nodes:remove', function(n) {
+            if (typesInUse.hasOwnProperty(n.type)) {
+                typesInUse[n.type]--;
+                if (typesInUse[n.type] === 0) {
+                    delete typesInUse[n.type];
+                    var ns = RED.nodes.registry.getNodeSetForType(n.type);
+                    refreshNodeModule(ns.module);
+                }
+            }
+        })
+
+
+    }
+
+    return {
+        init: init,
+    }
+})();
diff --git a/editor/js/ui/palette.js b/editor/js/ui/palette.js
index f17889ded..86e9b8c45 100644
--- a/editor/js/ui/palette.js
+++ b/editor/js/ui/palette.js
@@ -393,6 +393,49 @@ RED.palette = (function() {
     }
 
     function init() {
+
+        RED.events.on('registry:node-type-added', function(nodeType) {
+            var def = RED.nodes.getType(nodeType);
+            addNodeType(nodeType,def);
+            if (def.onpaletteadd && typeof def.onpaletteadd === "function") {
+                def.onpaletteadd.call(def);
+            }
+        });
+        RED.events.on('registry:node-type-removed', function(nodeType) {
+            removeNodeType(nodeType);
+        });
+
+        RED.events.on('registry:node-set-enabled', function(nodeSet) {
+            for (var j=0;j<nodeSet.types.length;j++) {
+                showNodeType(nodeSet.types[j]);
+                var def = RED.nodes.getType(nodeSet.types[j]);
+                if (def.onpaletteadd && typeof def.onpaletteadd === "function") {
+                    def.onpaletteadd.call(def);
+                }
+            }
+        });
+        RED.events.on('registry:node-set-disabled', function(nodeSet) {
+            for (var j=0;j<nodeSet.types.length;j++) {
+                hideNodeType(nodeSet.types[j]);
+                var def = RED.nodes.getType(nodeSet.types[j]);
+                if (def.onpaletteremove && typeof def.onpaletteremove === "function") {
+                    def.onpaletteremove.call(def);
+                }
+            }
+        });
+        RED.events.on('registry:node-set-removed', function(nodeSet) {
+            if (nodeSet.added) {
+                for (var j=0;j<nodeSet.types.length;j++) {
+                    removeNodeType(nodeSet.types[j]);
+                    var def = RED.nodes.getType(nodeSet.types[j]);
+                    if (def.onpaletteremove && typeof def.onpaletteremove === "function") {
+                        def.onpaletteremove.call(def);
+                    }
+                }
+            }
+        });
+
+
         $(".palette-spinner").show();
         if (RED.settings.paletteCategories) {
             RED.settings.paletteCategories.forEach(function(category){
@@ -438,6 +481,8 @@ RED.palette = (function() {
                 }
             }
         });
+
+        RED.palette.editor.init();
     }
 
     return {
diff --git a/editor/js/ui/sidebar.js b/editor/js/ui/sidebar.js
index 56d9e8b46..9a3e75dae 100644
--- a/editor/js/ui/sidebar.js
+++ b/editor/js/ui/sidebar.js
@@ -206,7 +206,6 @@ RED.sidebar = (function() {
         showSidebar();
         RED.sidebar.info.init();
         RED.sidebar.config.init();
-        RED.sidebar.palette.init();
         // hide info bar at start if screen rather narrow...
         if ($(window).width() < 600) { toggleSidebar(); }
     }
diff --git a/editor/js/ui/tray.js b/editor/js/ui/tray.js
index 3c821e5e3..747600b48 100644
--- a/editor/js/ui/tray.js
+++ b/editor/js/ui/tray.js
@@ -110,6 +110,7 @@ RED.tray = (function() {
 
         $("#header-shade").show();
         $("#editor-shade").show();
+        $("#palette-shade").show();
         $(".sidebar-shade").show();
 
         tray.preferredWidth = Math.max(el.width(),500);
@@ -259,6 +260,7 @@ RED.tray = (function() {
                     if (stack.length === 0) {
                         $("#header-shade").hide();
                         $("#editor-shade").hide();
+                        $("#palette-shade").hide();
                         $(".sidebar-shade").hide();
                         RED.events.emit("editor:close");
                         RED.view.focus();
diff --git a/editor/sass/editor.scss b/editor/sass/editor.scss
index f647bff16..db0bab213 100644
--- a/editor/sass/editor.scss
+++ b/editor/sass/editor.scss
@@ -167,7 +167,7 @@
     background: $background-color;
     color: $workspace-button-color;
 }
-#editor-shade, #header-shade  {
+#palette-shade, #editor-shade, #header-shade, #sidebar-shade  {
     position: absolute;
     top:0;
     bottom:0;
diff --git a/editor/sass/mixins.scss b/editor/sass/mixins.scss
index aff3f899f..4d8ada6fb 100644
--- a/editor/sass/mixins.scss
+++ b/editor/sass/mixins.scss
@@ -1,5 +1,5 @@
 /**
- * Copyright 2015 IBM Corp.
+ * Copyright 2015, 2016 IBM Corp.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -22,6 +22,14 @@
     user-select: none;
 }
 
+@mixin enable-selection {
+    -webkit-user-select: auto;
+    -khtml-user-select: auto;
+    -moz-user-select: auto;
+    -ms-user-select: auto;
+    user-select: auto;
+}
+
 @mixin component-border {
    border: 1px solid $primary-border-color;
    box-sizing: border-box;
@@ -43,14 +51,15 @@
         cursor: default;
         color: $workspace-button-color-disabled;
     }
-    &:not(.disabled):hover {
+    &:hover, &:focus {
         text-decoration: none;
+    }
+    &:not(.disabled):hover {
         color: $workspace-button-color-hover;
         background: $workspace-button-background-hover;
     }
     &:not(.disabled):focus {
         color: $workspace-button-color-focus;
-        text-decoration: none;
     }
     &:not(.disabled):active {
         color: $workspace-button-color-active;
diff --git a/editor/sass/palette-editor.scss b/editor/sass/palette-editor.scss
new file mode 100644
index 000000000..a5e96881f
--- /dev/null
+++ b/editor/sass/palette-editor.scss
@@ -0,0 +1,158 @@
+/**
+ * Copyright 2016 IBM Corp.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ **/
+
+#palette-editor {
+    text-align: left;
+    display: none;
+    position: absolute;
+    top: 0px;
+    right: 0;
+    bottom: 25px;
+    left:0;
+    padding: 0;
+    box-sizing:border-box;
+    background: #fff;
+
+    .red-ui-editableList-container {
+        border-left: none;
+        border-right: none;
+        border-bottom: none;
+        border-radius: 0;
+        padding: 0px;
+
+
+        li {
+            // border: none;
+            // border-top: 1px solid $primary-border-color;
+            padding: 0px;
+            .disabled {
+                background: #f3f3f3;
+            }
+            .red-ui-editableList-item-content {
+                padding: 12px 8px;
+            }
+            &:last-child {
+                // border-bottom: 1px solid $primary-border-color;
+            }
+        }
+
+    }
+    .palette-module-button-group {
+        position: absolute;
+        right: 0;
+        bottom: 0;
+        a {
+            margin-left: 5px;
+        }
+    }
+    .palette-module-meta {
+        overflow: hidden;
+        color: #666;
+        position: relative;
+        &.disabled {
+            color: #ccc;
+        }
+
+        .fa {
+            width: 15px;
+            text-align: center;
+            margin-right: 5px;
+        }
+    }
+    .palette-module-name {
+        white-space: nowrap;
+        @include enable-selection;
+    }
+    .palette-module-version {
+        font-style:italic;
+        font-size: 0.8em;
+        @include enable-selection;
+    }
+    .palette-module-set-button-group {
+    }
+    .palette-module-count {
+        border-radius: 4px;
+        background: #eee;
+        padding: 2px 8px;
+        font-size: 12px;
+    }
+    .palette-module-content {
+        display: none;
+        padding: 10px 3px;
+    }
+    i.fa.palette-module-node-chevron {
+        width: 8px;
+        margin-right: 0;
+        transform: rotate(0deg);
+        transition: transform 0.2s ease-in-out;
+    }
+    .expanded {
+        i.fa.palette-module-node-chevron {
+            transform: rotate(90deg);
+        }
+
+        .palette-module-set-button {
+            background:#f3f3f3 !important;
+        }
+    }
+    .palette-module-set {
+        border:1px solid $secondary-border-color;
+        border-radius: 0;
+        padding: 5px;
+        position: relative;
+        &:not(:last-child) {
+            border-bottom: none;
+        }
+        &:first-child {
+            border-top-right-radius: 2px;
+            border-top-left-radius: 2px;
+        }
+        &:last-child {
+            border-bottom-right-radius: 2px;
+            border-bottom-left-radius: 2px;
+        }
+    }
+
+    .palette-module-type {
+        color: #666;
+        padding-left: 5px;
+        font-size: 0.9em;
+        @include enable-selection;
+    }
+    .palette-module-type-swatch {
+        display: inline-block;
+        width: 12px;
+        height: 12px;
+        border-radius: 3px;
+        vertical-align: middle;
+        margin-right: 5px;
+        background: #fff;
+        border: 1px solid #fff;
+    }
+    .palette-module-set-button-group {
+        position: absolute;
+        right: 4px;
+        top: 4px;
+    }
+
+    .palette-module-set-disabled {
+        background: #eee;
+        .palette-module-type {
+            color: #999;
+        }
+    }
+
+}
diff --git a/editor/sass/palette.scss b/editor/sass/palette.scss
index 07958edf3..bc4c8fde1 100644
--- a/editor/sass/palette.scss
+++ b/editor/sass/palette.scss
@@ -25,10 +25,25 @@
     text-align: center;
     @include disable-selection;
     @include component-border;
-
+    transition: width 0.2s ease-in-out;
 }
+
+.palette-expanded {
+    & #palette {
+        width: 380px;
+        box-shadow: 1px 0 6px rgba(0,0,0,0.1);
+    }
+    & #workspace { left: 379px !important; }
+    & #palette-collapse-all { display: none; }
+    & #palette-expand-all { display: none; }
+    & #palette-container { display: none !important; }
+    & #palette-search { display: none !important; }
+    & #palette-edit { background: $workspace-button-background-active }
+    & #palette-editor { display: block !important }
+}
+
+
 .palette-scroll {
-    display: none;
     position: absolute;
     top: 35px;
     right: 0;
@@ -41,9 +56,9 @@
 .palette-spinner {
     padding-top: 40px;
 }
+
 #palette-search {
     position: absolute;
-    display: none;
     top: 0;
     left:0;
     right:0;
diff --git a/editor/sass/style.scss b/editor/sass/style.scss
index 2687d47fe..2dd3babf8 100644
--- a/editor/sass/style.scss
+++ b/editor/sass/style.scss
@@ -40,6 +40,8 @@
 @import "tab-info";
 @import "popover";
 @import "flow";
+@import "palette-editor";
+
 
 @import "typedInput";
 @import "editableList";
diff --git a/editor/sass/workspace.scss b/editor/sass/workspace.scss
index 7f28ed210..d23d5cb81 100644
--- a/editor/sass/workspace.scss
+++ b/editor/sass/workspace.scss
@@ -40,6 +40,8 @@
     right: 322px;
     overflow: hidden;
     @include component-border;
+    transition: left 0.2s ease-in-out;
+
 }
 
 .workspace-footer-button {
diff --git a/editor/templates/index.mst b/editor/templates/index.mst
index ecd254376..239f68a6e 100644
--- a/editor/templates/index.mst
+++ b/editor/templates/index.mst
@@ -43,19 +43,6 @@
     <div id="header-shade" class="hide"></div>
 </div>
 <div id="main-container" class="sidebar-closed hide">
-    <div id="palette">
-        <img src="red/images/spin.svg" class="palette-spinner hide"/>
-        <div id="palette-search">
-            <i class="fa fa-search"></i><input id="palette-search-input" type="text" data-i18n="[placeholder]palette.filter"><a href="#" id="palette-search-clear"><i class="fa fa-times"></i></a></input>
-        </div>
-        <div id="palette-container" class="palette-scroll"></div>
-        <div id="palette-footer">
-            <a class="palette-button" id="palette-collapse-all" href="#"><i class="fa fa-angle-double-up"></i></a>
-            <a class="palette-button" id="palette-expand-all" href="#"><i class="fa fa-angle-double-down"></i></a>
-        </div>
-
-    </div><!-- /palette -->
-
     <div id="workspace">
         <ul id="workspace-tabs"></ul>
         <div id="workspace-add-tab"><a id="btn-workspace-add-tab" href="#"><i class="fa fa-plus"></i></a></div>
@@ -66,13 +53,32 @@
             <a class="workspace-footer-button" id="btn-zoom-zero" href="#"><i class="fa fa-circle-o"></i></a>
             <a class="workspace-footer-button" id="btn-zoom-in" href="#"><i class="fa fa-plus"></i></a>
         </div>
+        <div id="editor-shade" class="hide"></div>
     </div>
-    <div id="editor-shade" class="hide"></div>
     <div id="editor-stack"></div>
+    <div id="palette">
+        <img src="red/images/spin.svg" class="palette-spinner hide"/>
+        <div id="palette-search" class="hide">
+            <i class="fa fa-search"></i><input id="palette-search-input" type="text" data-i18n="[placeholder]palette.filter"><a href="#" id="palette-search-clear"><i class="fa fa-times"></i></a></input>
+        </div>
+        <div id="palette-editor">
+            <div class="editor-tray-header"><div class="editor-tray-titlebar"><ul class="editor-tray-breadcrumbs"><li>Manage palette</li></ul></div><div class="editor-tray-toolbar"><button id="palette-editor-close" class="ui-button ui-widget ui-state-default ui-corner-all ui-button-text-only primary" role="button" aria-disabled="false">Done</button></div></div>
+        </div>
+        <div id="palette-container" class="palette-scroll hide"></div>
+        <div id="palette-footer">
+            <div style="float:left">
+                <a class="palette-button palette-button-left" id="palette-edit" href="#"><i class="fa fa-cog"></i></a>
+            </div>
+            <a class="palette-button" id="palette-collapse-all" href="#"><i class="fa fa-angle-double-up"></i></a>
+            <a class="palette-button" id="palette-expand-all" href="#"><i class="fa fa-angle-double-down"></i></a>
+        </div>
+        <div id="palette-shade" class="hide"></div>
+    </div><!-- /palette -->
     <div id="sidebar">
         <ul id="sidebar-tabs"></ul>
         <div id="sidebar-content"></div>
         <div id="sidebar-footer"></div>
+        <div id="sidebar-shade" class="hide"></div>
     </div>
 
     <div id="sidebar-separator"></div>
diff --git a/red/runtime/nodes/registry/loader.js b/red/runtime/nodes/registry/loader.js
index 9e5897593..d51b427e9 100644
--- a/red/runtime/nodes/registry/loader.js
+++ b/red/runtime/nodes/registry/loader.js
@@ -188,7 +188,8 @@ function loadNodeConfig(fileInfo) {
             template: file.replace(/\.js$/,".html"),
             enabled: isEnabled,
             loaded:false,
-            version: version
+            version: version,
+            local: fileInfo.local
         };
         if (fileInfo.hasOwnProperty("types")) {
             node.types = fileInfo.types;
diff --git a/red/runtime/nodes/registry/localfilesystem.js b/red/runtime/nodes/registry/localfilesystem.js
index 112ed72ee..9ca1307e3 100644
--- a/red/runtime/nodes/registry/localfilesystem.js
+++ b/red/runtime/nodes/registry/localfilesystem.js
@@ -141,7 +141,8 @@ function scanTreeForNodesModules(moduleName) {
 
     if (settings.userDir) {
         userDir = path.join(settings.userDir,"node_modules");
-        results = results.concat(scanDirForNodesModules(userDir,moduleName));
+        results = scanDirForNodesModules(userDir,moduleName);
+        results.forEach(function(r) { r.local = true; });
     }
 
     if (dir) {
@@ -240,12 +241,14 @@ function getNodeFiles(disableNodePathScan) {
             nodeList[moduleFile.package.name] = {
                 name: moduleFile.package.name,
                 version: moduleFile.package.version,
+                local: moduleFile.local||false,
                 nodes: {}
             };
             if (moduleFile.package['node-red'].version) {
                 nodeList[moduleFile.package.name].redVersion = moduleFile.package['node-red'].version;
             }
             nodeModuleFiles.forEach(function(node) {
+                node.local = moduleFile.local||false;
                 nodeList[moduleFile.package.name].nodes[node.name] = node;
             });
             nodeFiles = nodeFiles.concat(nodeModuleFiles);
diff --git a/red/runtime/nodes/registry/registry.js b/red/runtime/nodes/registry/registry.js
index 74606853e..02a3b304d 100644
--- a/red/runtime/nodes/registry/registry.js
+++ b/red/runtime/nodes/registry/registry.js
@@ -56,7 +56,8 @@ function filterNodeInfo(n) {
         id: n.id||n.module+"/"+n.name,
         name: n.name,
         types: n.types,
-        enabled: n.enabled
+        enabled: n.enabled,
+        local: n.local||false
     };
     if (n.hasOwnProperty("module")) {
         r.module = n.module;
@@ -90,6 +91,7 @@ function saveNodeList() {
                     moduleList[module] = {
                         name: module,
                         version: moduleConfigs[module].version,
+                        local: moduleConfigs[module].local||false,
                         nodes: {}
                     };
                 }
@@ -179,6 +181,7 @@ function addNodeSet(id,set,version) {
     if (version) {
         moduleConfigs[set.module].version = version;
     }
+    moduleConfigs[set.module].local = set.local;
 
     moduleConfigs[set.module].nodes[set.name] = set;
     nodeList.push(id);
@@ -306,6 +309,7 @@ function getModuleInfo(module) {
         var m = {
             name: module,
             version: moduleConfigs[module].version,
+            local: moduleConfigs[module].local,
             nodes: []
         };
         for (var i = 0; i < nodes.length; ++i) {