diff --git a/kernel/inithma.c b/kernel/inithma.c
index 0a1019e..71478ab 100644
--- a/kernel/inithma.c
+++ b/kernel/inithma.c
@@ -330,22 +330,8 @@ void MoveKernel(unsigned NewKernelSegment)
 
   if (NewKernelSegment < CurrentKernelSegment ||
       NewKernelSegment == 0xffff)
-  {
-    unsigned i;
-    UBYTE FAR *s, FAR * d;
-
-    for (i = 0, s = HMASource, d = HMADest; i < len; i++)
-      d[i] = s[i];
-  }
-  else
-  {
-    /* might overlap */
-    unsigned i;
-    UBYTE FAR *s, FAR * d;
-
-    for (i = len, s = HMASource, d = HMADest; i != 0; i--)
-      d[i] = s[i];
-  }
+    fmemcpy(HMADest, HMASource, len);
+  /* else it's the very first relocation: handled by kernel.asm */
 
   HMAFree = (FP_OFF(HMADest) + len + 0xf) & 0xfff0;
   /* first free byte after HMA_TEXT on 16 byte boundary */
diff --git a/kernel/kernel.asm b/kernel/kernel.asm
index 59de502..8d803d8 100644
--- a/kernel/kernel.asm
+++ b/kernel/kernel.asm
@@ -109,7 +109,6 @@ segment INIT_TEXT
                 ;
 kernel_start:
 
-                push ax
                 push bx
                 pushf              
                 mov ax, 0e32h           ; '2' Tracecode - kernel entered
@@ -117,13 +116,12 @@ kernel_start:
                 int 010h
                 popf
                 pop bx
-                pop ax
 
 		mov	ax,seg init_tos
 		cli
 		mov	ss,ax
 		mov	sp,init_tos
-		int	12h		; move the init code to higher memory
+		int	12h		; move init text+data to higher memory
 		mov	cl,6
 		shl	ax,cl
 		mov	dx,15 + init_end wrt INIT_TEXT
@@ -137,13 +135,43 @@ kernel_start:
 		mov	ss,ax		; set SS to init data segment
 		sti                     ; now enable them
 		mov	ax,cs
+		mov	dx,__InitTextStart wrt HMA_TEXT
+%ifdef WATCOM
+		mov	cx,dx
+		shr	cx,4
+		add	ax,cx
+%endif
 		mov	ds,ax
-		xor	si,si
-		xor	di,di
-		mov	cx,1 + init_end wrt INIT_TEXT
+		mov	cx,-2 + init_end wrt INIT_TEXT
+		mov	si,cx
+		mov	di,cx
 		shr	cx,1
-		cld
+		inc	cx
+		std			; if there's overlap only std is safe
 		rep	movsw
+
+					; move HMA_TEXT to higher memory
+		mov	cx,dx		; cx = __InitTextStart wrt HMA_TEXT
+		shr	dx,4
+
+		sub	ax,dx
+		mov	ds,ax		; ds = HMA_TEXT
+		mov	ax,es
+		sub	ax,dx
+		mov	es,ax		; es = new HMA_TEXT
+
+		mov	si,cx
+		dec	si
+		dec	si
+		mov	di,si
+		shr	cx,1
+		rep	movsw
+		
+		cld
+%ifndef WATCOM				; for WATCOM: CS equal for HMA and INIT
+		add	ax,dx
+		mov	es,ax		; otherwise CS -> init_text
+%endif
 		push	es
 		mov	ax,cont
 		push	ax
diff --git a/kernel/main.c b/kernel/main.c
index a1cd784..8b3ebd3 100644
--- a/kernel/main.c
+++ b/kernel/main.c
@@ -227,7 +227,11 @@ STATIC void init_kernel(void)
   ram_top = init_oem();
 
   /* move kernel to high conventional RAM, just below the init code */
+#ifdef __WATCOMC__
+  lpTop = MK_FP(_CS, 0);
+#else
   lpTop = MK_FP(_CS - (FP_OFF(_HMATextEnd) + 15) / 16, 0);
+#endif
 
   MoveKernel(FP_SEG(lpTop));
   lpTop = MK_FP(FP_SEG(lpTop) - 0xfff, 0xfff0);
diff --git a/kernel/segs.inc b/kernel/segs.inc
index 649ea8f..592760f 100644
--- a/kernel/segs.inc
+++ b/kernel/segs.inc
@@ -30,8 +30,12 @@
 group   PGROUP          PSP
 group   LGROUP          _LOWTEXT _IO_TEXT _IO_FIXED_DATA _TEXT
 group   DGROUP          _FIXED_DATA _BSS _DATA _DATAEND CONST CONST2 DCONST DYN_DATA
+%ifdef WATCOM
+group   TGROUP          HMA_TEXT_START HMA_TEXT HMA_TEXT_END INIT_TEXT_START INIT_TEXT INIT_TEXT_END
+%else
 group   TGROUP          HMA_TEXT_START HMA_TEXT HMA_TEXT_END
 group   IGROUP          INIT_TEXT_START INIT_TEXT INIT_TEXT_END
+%endif
 group   I_GROUP         ID_B ID ID_E IC IDATA ICONST ICONST2 I_DATA IB_B I_BSS IB IB_E
 
 segment PSP             class=PSP
@@ -54,7 +58,7 @@ segment	HMA_TEXT	class=CODE
 segment HMA_TEXT_END	class=CODE
 segment INIT_TEXT_START class=CODE align=16
 segment	INIT_TEXT	class=CODE
-segment	INIT_TEXT_END   class=CODE	
+segment	INIT_TEXT_END   class=CODE
 segment ID_B            class=ID   align=16
 segment ID              class=ID   align=2
 segment ID_E            class=ID   align=2
diff --git a/mkfiles/watcom.mak b/mkfiles/watcom.mak
index 32b3d49..68283e8 100644
--- a/mkfiles/watcom.mak
+++ b/mkfiles/watcom.mak
@@ -62,7 +62,7 @@ MATH_INSERT=+i4m
 #
 
 ALLCFLAGS=-I..\hdr $(TARGETOPT) $(ALLCFLAGS)-zq-os-s-e5-j-zl-zp1-wx-we-zgf-zff-r
-INITCFLAGS=$(ALLCFLAGS)-ntINIT_TEXT-ndI
+INITCFLAGS=$(ALLCFLAGS)-ntINIT_TEXT-gTGROUP-ndI
 CFLAGS=$(ALLCFLAGS)-ntHMA_TEXT
 INITPATCH=..\utils\patchobj __U4D=_IU4D __U4M=_IU4M