diff --git a/callagent/session/Extensions.st b/callagent/session/Extensions.st
index 6f30259..9faa351 100644
--- a/callagent/session/Extensions.st
+++ b/callagent/session/Extensions.st
@@ -47,3 +47,11 @@ SIPACKRequest extend [
         aCall sessionAcked: self dialog: aDialog.
     ]
 ]
+
+SIPCancelRequest extend [
+    sipCallDispatch: aCall dialog: aDialog [
+        <category: '*OsmoSIP-call'>
+        self logDebug: ('SIPCall(<1s>) got ACK.' expandMacrosWith: aCall callId) area: #sip.
+        aCall sessionCanceled: self dialog: aDialog.
+    ]
+]
diff --git a/callagent/session/SIPIncomingCall.st b/callagent/session/SIPIncomingCall.st
index 91bf392..7585786 100644
--- a/callagent/session/SIPIncomingCall.st
+++ b/callagent/session/SIPIncomingCall.st
@@ -133,18 +133,22 @@ receiving an ACK?
         self sendResponse: 200 text: 'OK' data: localSDP.
     ]
 
-    sendResponse: aCode text: aText data: aFile [
+    respondTo: aDialog code: aCode text: aText data: aFile cseq: aCseq[
         | resp |
         resp := (SIPResponse code: aCode with: aText)
                     addParameter: 'Via' value: (ua generateVia: branch);
-                    addParameter: 'From' value: dialog generateFrom;
-                    addParameter: 'To' value: dialog generateTo;
-                    addParameter: 'Call-ID' value: dialog callId;
+                    addParameter: 'From' value: aDialog generateFrom;
+                    addParameter: 'To' value: aDialog generateTo;
+                    addParameter: 'Call-ID' value: aDialog callId;
                     addParameter: 'CSeq' value: ('<1p> <2s>'
-                                            expandMacrosWith: dialog cseq with: 'INVITE');
+                                            expandMacrosWith: aDialog cseq with: aCseq);
                     sdp: aFile;
                     yourself.
-        ua queueData: resp asDatagram dialog: dialog.
+        ua queueData: resp asDatagram dialog: aDialog.
+    ]
+
+    sendResponse: aCode text: aText data: aFile [
+        ^self respondTo: dialog code: aCode text: aText data: aFile cseq: 'INVITE'
     ]
 
     remoteReInvite: aRequest dialog: aDialog [
@@ -169,4 +173,20 @@ receiving an ACK?
         "We have a new session now"
         self sessionNew.
     ]
+
+    sessionCanceled: aCancel dialog: aDialog [
+        (self moveToState: self class stateFailed) ifFalse: [
+            self logError: ('SIPIncomingCall(<1s>) failed to handle cancel'
+                                expandMacrosWith: self callId) area: #sip.
+            self respondTo: aDialog code: '200' text: 'OK' data: nil.
+            ^false].
+
+        "Tell the user the session has failed. Use the existing
+        dialogue to say the request was terminated and to reply
+        to the CANCEL transaction itself."
+        self sessionFailed.
+        self sendResponse: 487 text: 'Request Terminated' data: nil.
+        self unregisterDialog.
+        self respondTo: aDialog code: '200' text: 'OK' data: nil cseq: 'CANCEL'.
+    ]
 ]
diff --git a/callagent/tests/SIPInviteTest.st b/callagent/tests/SIPInviteTest.st
index a46b50b..18118af 100644
--- a/callagent/tests/SIPInviteTest.st
+++ b/callagent/tests/SIPInviteTest.st
@@ -56,6 +56,19 @@ TestCase subclass: SIPInviteTest [
             contents
     ]
 
+    createCancel [
+        "Without the tag..."
+        ^String streamContents: [:stream |
+            stream
+                nextPutAll: 'CANCEL sip:+99915123456@10.23.43.2 SIP/2.0'; cr; nl;
+                nextPutAll: 'Via: SIP/2.0/UDP 10.23.43.1:5060;rport;branch=z9hG4bK1675813621'; cr; nl;
+                nextPutAll: 'CSeq: 5 CANCEL'; cr; nl;
+                nextPutAll: 'Call-ID: 726660594@10.23.43.1'; cr; nl;
+                nextPutAll: 'From: "00331234567" <sip:00331234567@10.23.43.1>;tag=807191241'; cr; nl;
+                nextPutAll: 'To: <sip:+99915123456@10.23.43.2>'; cr; nl;
+                cr;nl]
+    ]
+
     setUp [
         sent := OrderedCollection new.
         transport := SIPTransportMock new
@@ -219,4 +232,48 @@ TestCase subclass: SIPInviteTest [
         self assert: msg code equals: '200'.
         self assert: msg phrase equals: 'OK'.
     ]
+
+    testCanceledCall [
+        | msg call tag |
+
+        agent onNewCall: [:invite :dialog |
+            call := (SIPIncomingCall initWith: invite dialog: dialog on: agent)
+                trying;
+                yourself].
+
+        "Inject the invite"
+        transport inject: self createInvite.
+
+        "Check the messages"
+        self assert: sent size equals: 1.
+        msg := agent parser parse: sent first data.
+        self assert: msg code equals: '100'.
+        self assert: msg phrase equals: 'Trying'.
+        self assert: agent dialogs size equals: 1.
+        self deny: call unregisterDialogIsPending.
+        tag := (msg parameter: 'To' ifAbsent: []) tag.
+
+        "Now cancel and see what is happening!"
+        transport inject: self createCancel.
+
+        "We expect a 487 and a 200. The 487 needs to be for the old
+        and existign dialog."
+        self assert: sent size equals: 3.
+        self assert: agent dialogs size equals: 1.
+        self assert: agent dialogs first unregisterDialogIsPending.
+
+        msg := agent parser parse: sent second data.
+        self assert: msg code equals: '487'.
+        self assert: msg phrase equals: 'Request Terminated'.
+        self assert: (msg parameter: 'To' ifAbsent: []) tag equals: tag.
+        self assert: (msg parameter: 'CSeq' ifAbsent: []) number equals: 3.
+        self assert: (msg parameter: 'CSeq' ifAbsent: []) method equals: 'INVITE'.
+
+        msg := agent parser parse: sent third data.
+        self assert: msg code equals: '200'.
+        self assert: msg phrase equals: 'OK'.
+        self assert: (msg parameter: 'To' ifAbsent: []) tag isNil.
+        self assert: (msg parameter: 'CSeq' ifAbsent: []) number equals: 5.
+        self assert: (msg parameter: 'CSeq' ifAbsent: []) method equals: 'CANCEL'.
+    ]
 ]