diff --git a/components/terrain/terraingrid.cpp b/components/terrain/terraingrid.cpp
index 322c15196..c8f8caef8 100644
--- a/components/terrain/terraingrid.cpp
+++ b/components/terrain/terraingrid.cpp
@@ -32,6 +32,7 @@
 #include <osg/PositionAttitudeTransform>
 #include <osg/Geometry>
 #include <osg/Geode>
+#include <osg/KdTree>
 
 #include <osgFX/Effect>
 
@@ -66,6 +67,7 @@ namespace Terrain
 TerrainGrid::TerrainGrid(osg::Group* parent, Resource::ResourceSystem* resourceSystem, osgUtil::IncrementalCompileOperation* ico,
                          Storage* storage, int nodeMask)
     : Terrain::World(parent, resourceSystem, ico, storage, nodeMask)
+    , mKdTreeBuilder(new osg::KdTreeBuilder)
 {
 }
 
@@ -133,6 +135,9 @@ void TerrainGrid::loadCell(int x, int y)
     osg::ref_ptr<osg::Geode> geode (new osg::Geode);
     geode->addDrawable(geometry);
 
+    // build a kdtree to speed up intersection tests with the terrain
+    geode->accept(*mKdTreeBuilder);
+
     std::vector<LayerInfo> layerList;
     std::vector<osg::ref_ptr<osg::Image> > blendmaps;
     mStorage->getBlendmaps(1.f, center, false, blendmaps, layerList);
diff --git a/components/terrain/terraingrid.hpp b/components/terrain/terraingrid.hpp
index 3a6d71793..a697297b5 100644
--- a/components/terrain/terraingrid.hpp
+++ b/components/terrain/terraingrid.hpp
@@ -25,6 +25,11 @@
 #include "world.hpp"
 #include "material.hpp"
 
+namespace osg
+{
+    class KdTreeBuilder;
+}
+
 namespace Terrain
 {
 
@@ -44,6 +49,8 @@ namespace Terrain
     private:
         typedef std::map<std::pair<int, int>, GridElement*> Grid;
         Grid mGrid;
+
+        osg::ref_ptr<osg::KdTreeBuilder> mKdTreeBuilder;
     };
 
 }