diff --git a/PDP11/pdp11_xu.c b/PDP11/pdp11_xu.c
index d1a0c245..8954df37 100644
--- a/PDP11/pdp11_xu.c
+++ b/PDP11/pdp11_xu.c
@@ -62,6 +62,7 @@
 
   Modification history:
 
+  25-Jan-13  RJ   SELFTEST needs to report the READY state otherwise VMS 3.7 gets fatal controller error
   12-Jan-11  DTH  Added SHOW XU FILTERS modifier
   11-Jan-11  DTH  Corrected SELFTEST command, enabling use by VMS 3.7, VMS 4.7, and Ultrix 1.1
   09-Dec-10  MP   Added address conflict check during attach.
@@ -1456,6 +1457,9 @@ void xu_port_command (CTLR* xu)
 		controller's progress through the diagnostic testing.
 	  */
       xu->var->pcsr0 |= PCSR0_DNI;
+      xu->var->pcsr0 &= ~PCSR0_USCI;
+      xu->var->pcsr0 &= ~PCSR0_FATL;
+      xu->var->pcsr1 = STATE_READY;
       break;
 
     case CMD_START:			/* START */
diff --git a/PDP11/pdp11_xu.h b/PDP11/pdp11_xu.h
index 6c5d52ba..b1a1ebc5 100644
--- a/PDP11/pdp11_xu.h
+++ b/PDP11/pdp11_xu.h
@@ -28,6 +28,7 @@
 
   Modification history:
 
+  25-Jan-13  RJ   SELFTEST needs to report the READY state otherwise VMS 3.7 gets fatal controller error
   23-Jan-08  MP   Added debugging support to display packet headers and packet data
   08-Dec-05  DTH  Added load_server, increased UDBSIZE for system ID parameters
   07-Jul-05  RMS  Removed extraneous externs
@@ -173,6 +174,7 @@ typedef struct xu_controller CTLR;
 #define PCSR0_TXI   0010000                             /* <12> Transmit Interrupt */
 #define PCSR0_DNI   0004000                             /* <11> Done Interrupt */
 #define PCSR0_RCBI  0002000                             /* <10> Recv Buffer Unavail Intr */
+#define PCSR0_FATL  0001000                             /* <09> Fatal Internal Error */
 #define PCSR0_USCI  0000400                             /* <08> Unsolicited State Chg Inter */
 #define PCSR0_INTR  0000200                             /* <07> Interrupt Summary */
 #define PCSR0_INTE  0000100                             /* <06> Interrupt Enable */