diff --git a/app/controllers/my_profile/manage_products_controller.rb b/app/controllers/my_profile/manage_products_controller.rb
index 8f4a137..99cdaa6 100644
--- a/app/controllers/my_profile/manage_products_controller.rb
+++ b/app/controllers/my_profile/manage_products_controller.rb
@@ -12,6 +12,8 @@ class ManageProductsController < ApplicationController
   end
 
   def new
+    @current_category = ProductCategory.top_level_for(environment).first
+    @categories = @current_category.nil? ? [] : @current_category.children
     @product = @profile.products.build(params[:product])
     @product.build_image unless @product.image
     if request.post?
@@ -26,6 +28,8 @@ class ManageProductsController < ApplicationController
 
   def edit
     @product = @profile.products.find(params[:id])
+    @current_category = @product.product_category
+    @categories = @current_category.nil? ? [] : @current_category.children
     if request.post?
       if @product.update_attributes(params[:product])
         flash[:notice] = _('Product succesfully updated')
@@ -46,5 +50,11 @@ class ManageProductsController < ApplicationController
       redirect_back_or_default :action => 'show', :id => @product
     end
   end
+
+  def update_subcategories
+    @current_category = ProductCategory.find(params[:id])
+    @categories = @current_category.children
+    render :partial => 'subcategories'
+  end
  
 end
diff --git a/app/views/manage_products/_form.rhtml b/app/views/manage_products/_form.rhtml
index 8957bff..e938fff 100644
--- a/app/views/manage_products/_form.rhtml
+++ b/app/views/manage_products/_form.rhtml
@@ -5,7 +5,11 @@
   <%= display_form_field( _('Price:'), f.text_field(:price) )  %>
   <%= display_form_field( _('Description:'), f.text_area(:description) )  %>
   <%= display_form_field( _('Image:'), file_field_tag( "product[image_builder][uploaded_data]" ) )  %>
-  <%= display_form_field( _('category:'), f.select( :product_category_id,ProductCategory.find(:all).map{|pc|[pc.name,pc.id]}, {:include_blank => true} ))  %>
+
+  <div id='subcategories'>
+    <%= render :partial => 'subcategories' %>
+  </div>
+
   <% button_bar do %>
     <%= submit_button('save', (mode == 'new' ? _('Create product') : _('Save changes')), :cancel => {:action => 'index'} ) %>
   <% end %>
diff --git a/app/views/manage_products/_subcategories.rhtml b/app/views/manage_products/_subcategories.rhtml
new file mode 100644
index 0000000..3938987
--- /dev/null
+++ b/app/views/manage_products/_subcategories.rhtml
@@ -0,0 +1,18 @@
+<p><%= _('Current category:') %></p>
+<%
+  categories = [@current_category]
+  categories.push(@current_category) while @current_category and @current_category = @current_category.parent
+%>
+<%= categories.compact.reverse.map{|i| link_to(i.name, {}, :class => 'select-current-category-link')}.join(' &rarr; ') %>
+
+<% unless @categories.empty? %>
+  <p><%= _('Select a subcategory:') %></p>
+<% end %>
+<% for category in @categories do %>
+  <%= link_to_remote category.name, {
+    :update => "subcategories",
+    :url => { :action => "update_subcategories", :id => category.id },
+    :loaded => visual_effect(:highlight, "subcategories") },
+    :class => 'select-subcategory-link'
+  %>
+<% end %>
diff --git a/public/stylesheets/controller_manage_products.css b/public/stylesheets/controller_manage_products.css
new file mode 100644
index 0000000..cdabb1a
--- /dev/null
+++ b/public/stylesheets/controller_manage_products.css
@@ -0,0 +1,11 @@
+a.select-subcategory-link:hover {
+  background-color: gray;
+}
+a.select-subcategory-link {
+  border: 1px solid gray;
+  padding: 2px 4px 2px 4px;
+  text-decoration: none;
+}
+a.select-current-category-link {
+  /* ... */
+}
diff --git a/test/functional/manage_products_controller_test.rb b/test/functional/manage_products_controller_test.rb
index cb8cce4..4ed08c8 100644
--- a/test/functional/manage_products_controller_test.rb
+++ b/test/functional/manage_products_controller_test.rb
@@ -103,5 +103,39 @@ class ManageProductsControllerTest < Test::Unit::TestCase
       assert Product.find_by_name('test product')      
     end    
   end
+
+  should 'show current category' do
+    environment = Environment.default
+    category1 = ProductCategory.create!(:name => 'Category 1', :environment => environment)
+    category2 = ProductCategory.create!(:name => 'Category 2', :environment => environment, :parent => category1)
+    category3 = ProductCategory.create!(:name => 'Category 3', :environment => environment, :parent => category2)
+    category4 = ProductCategory.create!(:name => 'Category 4', :environment => environment, :parent => category3)
+    get :new, :profile => @enterprise.identifier
+    assert_tag :tag => 'p', :content => /Current category:/, :sibling => { :tag => 'a', :content => /#{category1.name}/ }
+  end
+
+  should 'show subcategories list' do
+    environment = Environment.default
+    category1 = ProductCategory.create!(:name => 'Category 1', :environment => environment)
+    category2 = ProductCategory.create!(:name => 'Category 2', :environment => environment, :parent => category1)
+    get 'new', :profile => @enterprise.identifier
+    assert !assigns(:categories).empty?
+    assert_tag :tag => 'p', :content => /Select a subcategory:/, :sibling => { :tag => 'a', :attributes => { :href => '#' }, :content => /#{category2.name}/ }
+  end
+
+  should 'update subcategories' do
+    environment = Environment.default
+    category1 = ProductCategory.create!(:name => 'Category 1', :environment => environment)
+    category2 = ProductCategory.create!(:name => 'Category 2', :environment => environment, :parent => category1)
+    get 'update_subcategories', :profile => @enterprise.identifier, :id => category1.id
+    assert_tag :tag => 'a', :attributes => { :href => '#' }, :content => /#{category2.name}/
+  end
+
+  should 'not show subcategories list when no subcategories' do
+    environment = Environment.default
+    category1 = ProductCategory.create!(:name => 'Category 1', :environment => environment)
+    get 'update_subcategories', :profile => @enterprise.identifier, :id => category1.id
+    assert_no_tag :tag => 'p', :content => 'Select a subcategory:'
+  end
   
 end
--
libgit2 0.21.2