diff --git a/dialogs/proxydialog.cpp b/dialogs/proxydialog.cpp
index 1592ad904..5d7b47469 100644
--- a/dialogs/proxydialog.cpp
+++ b/dialogs/proxydialog.cpp
@@ -108,6 +108,9 @@ void ProxyDialog::accept() {
 
 	// all proxy info checks out, queue it with the proxy generator
 	for (int i=0;i<info_list.size();i++) {
+		info_list.at(i).footage->proxy = true;
+		info_list.at(i).footage->proxy_path.clear();
+
 		proxy_generator.queue(info_list.at(i));
 	}
 
diff --git a/io/config.h b/io/config.h
index 5e8c61f27..c01ee0ee3 100644
--- a/io/config.h
+++ b/io/config.h
@@ -3,7 +3,7 @@
 
 #include <QString>
 
-#define SAVE_VERSION 190120 // YYMMDD
+#define SAVE_VERSION 190201 // YYMMDD
 #define MIN_SAVE_VERSION 190104 // lowest compatible project version
 
 #define TIMECODE_DROP 0
diff --git a/io/loadthread.cpp b/io/loadthread.cpp
index adfc3a510..068ed901a 100644
--- a/io/loadthread.cpp
+++ b/io/loadthread.cpp
@@ -250,6 +250,10 @@ bool LoadThread::load_worker(QFile& f, QXmlStreamReader& stream, int type) {
 									m->speed = attr.value().toDouble();
 								} else if (attr.name() == "alphapremul") {
 									m->alpha_is_premultiplied = (attr.value() == "1");
+								} else if (attr.name() == "proxy") {
+									m->proxy = (attr.value() == "1");
+								} else if (attr.name() == "proxypath") {
+									m->proxy_path = attr.value().toString();
 								}
 							}
 
diff --git a/io/proxygenerator.cpp b/io/proxygenerator.cpp
index ca42efdd9..9f54b56a5 100644
--- a/io/proxygenerator.cpp
+++ b/io/proxygenerator.cpp
@@ -2,10 +2,12 @@
 
 #include "project/footage.h"
 #include "io/path.h"
+#include "mainwindow.h"
 
 #include <QDir>
 #include <QFileInfo>
 #include <QtMath>
+#include <QStatusBar>
 
 #include <QDebug>
 
@@ -19,7 +21,10 @@ enum AVCodecID temp_enc_codec = AV_CODEC_ID_PRORES;
 
 ProxyGenerator::ProxyGenerator() : cancelled(false) {}
 
-void transcode(const ProxyInfo& info) {
+void ProxyGenerator::transcode(const ProxyInfo& info) {
+	// set progress to 0
+	current_progress = 0.0;
+
 	// open input file
 	AVFormatContext* input_fmt_ctx = nullptr;
 	avformat_open_input(&input_fmt_ctx, info.footage->url.toUtf8(), nullptr, nullptr);
@@ -145,7 +150,7 @@ void transcode(const ProxyInfo& info) {
 	AVFrame* dec_frame = av_frame_alloc();
 
 	// main transcoding loop
-	while (true) {
+	while (!skip) {
 
 		// cache stream index
 		int stream_index = packet.stream_index;
@@ -186,28 +191,30 @@ void transcode(const ProxyInfo& info) {
 				// send packet to decoder
 				avcodec_send_packet(input_streams.at(stream_index), &packet);
 
+				// use timestamp and stream duration to create a rough estimation of the progress through this file
+				current_progress = qCeil((double(packet.pts)/double(input_fmt_ctx->streams[packet.stream_index]->duration))*100);
+
 			}
 
 			// free packet allocated by av_read_frame
 			av_packet_unref(&packet);
-		} while ((recfr_ret = avcodec_receive_frame(input_streams.at(packet.stream_index), dec_frame)) == AVERROR(EAGAIN));
+		} while ((recfr_ret = avcodec_receive_frame(input_streams.at(packet.stream_index), dec_frame)) == AVERROR(EAGAIN) && !skip);
 
 		// error/eof handling - cancel while loop
-		if (read_ret < 0) {
+		if (read_ret < 0 || skip) {
 			break;
 		}
 
-		//
-		// SWSCALE IF NECESSARY
-		//
-
 		// free packet as we're about to use it for encoding
 		av_packet_unref(&packet);
 
+		// rescale input frame timestamp to output timestamp
 		av_rescale_q(dec_frame->pts, input_fmt_ctx->streams[stream_index]->time_base, output_fmt_ctx->streams[stream_index]->time_base);
 
+		// determine if the pix_fmt is different, so if we need to convert
 		bool convert_pix_fmt = (output_streams.at(stream_index)->pix_fmt != input_streams.at(stream_index)->pix_fmt);
 
+		// create reference to the frame to be sent to the encoder
 		AVFrame* enc_frame = dec_frame;
 
 		if (convert_pix_fmt) {
@@ -233,14 +240,21 @@ void transcode(const ProxyInfo& info) {
 			av_frame_free(&enc_frame);
 		}
 
+		// return value for packet receiving
 		int recret;
-		while ((recret = avcodec_receive_packet(output_streams.at(stream_index), &packet)) >= 0) {
 
+		// loop through receiving packets
+		while ((recret = avcodec_receive_packet(output_streams.at(stream_index), &packet)) >= 0 && !skip) {
+
+			// set packet stream index to current stream index
 			packet.stream_index = stream_index;
 
+			// write frame to file
 			av_interleaved_write_frame(output_fmt_ctx, &packet);
 
+			// unref old packet
 			av_packet_unref(&packet);
+
 		}
 
 	}
@@ -276,7 +290,13 @@ void transcode(const ProxyInfo& info) {
 	// close input file
 	avformat_close_input(&input_fmt_ctx);
 
+	// set footage to use newly generated proxy
+	info.footage->proxy = true;
+	info.footage->proxy_path = info.path;
+
 	qInfo() << "Finished creating proxy for" << info.footage->url;
+	mainWindow->statusBar()->showMessage(tr("Finished generating proxy for \"%1\"").arg(info.footage->url));
+
 }
 
 // main proxy generating loop
@@ -300,6 +320,9 @@ void ProxyGenerator::run() {
 			// create directory for info
 			QFileInfo(info.path).dir().mkpath(".");
 
+			// set skip to false
+			skip = false;
+
 			// transcode proxy
 			transcode(info);
 
@@ -317,6 +340,22 @@ void ProxyGenerator::run() {
 
 // called to add footage to generate proxies for
 void ProxyGenerator::queue(const ProxyInfo &info) {
+	// remove any queued proxies with the same footage
+	if (!proxy_queue.isEmpty()
+			&& proxy_queue.first().footage == info.footage) {
+		// if the thread is currently processing a proxy with the same footage, abort it
+		skip = true;
+	}
+
+	// scan through the rest of the queue for another proxy with the same footage (start with 1 since we already processed first())
+	for (int i=1;i<proxy_queue.size();i++) {
+		if (proxy_queue.at(i).footage == info.footage) {
+			// found a duplicate, assume the one we're queuing now overrides and delete it
+			proxy_queue.removeAt(i);
+			i--;
+		}
+	}
+
 	// add proxy info to queue
 	proxy_queue.append(info);
 
@@ -328,6 +367,7 @@ void ProxyGenerator::queue(const ProxyInfo &info) {
 void ProxyGenerator::cancel() {
 	// signal to thread to cancel
 	cancelled = true;
+	skip = true;
 
 	// if signal is sleeping, wake it to cancel correctly
 	waitCond.wakeAll();
@@ -336,5 +376,12 @@ void ProxyGenerator::cancel() {
 	wait();
 }
 
+double ProxyGenerator::get_proxy_progress(Footage *f) {
+	if (proxy_queue.first().footage == f) {
+		return current_progress;
+	}
+	return 0.0;
+}
+
 // proxy generator is a global omnipotent entity
 ProxyGenerator proxy_generator;
diff --git a/io/proxygenerator.h b/io/proxygenerator.h
index 667887a20..b6bcaf294 100644
--- a/io/proxygenerator.h
+++ b/io/proxygenerator.h
@@ -22,11 +22,26 @@ public:
 	void run();
 	void queue(const ProxyInfo& info);
 	void cancel();
+	double get_proxy_progress(Footage* f);
 private:
+	// queue of footage to process proxies for
 	QVector<ProxyInfo> proxy_queue;
+
+	// threading objects
 	QWaitCondition waitCond;
 	QMutex mutex;
+
+	// set to true if you want to permanently close ProxyGenerator
 	bool cancelled;
+
+	// set to true if you want to abort the footage currently being processed
+	bool skip;
+
+	// stores progress in percent of proxy currently being processed
+	double current_progress;
+
+	// function that performs the actual transcode
+	void transcode(const ProxyInfo& info);
 };
 
 // proxy generator is a global omnipotent entity
diff --git a/panels/project.cpp b/panels/project.cpp
index 4ec6ae81a..0c543e1da 100644
--- a/panels/project.cpp
+++ b/panels/project.cpp
@@ -954,6 +954,10 @@ void Project::save_folder(QXmlStreamWriter& stream, int type, bool set_ids_only,
 					stream.writeAttribute("out", QString::number(f->out));
 					stream.writeAttribute("speed", QString::number(f->speed));
 					stream.writeAttribute("alphapremul", QString::number(f->alpha_is_premultiplied));
+
+					stream.writeAttribute("proxy", QString::number(f->proxy));
+					stream.writeAttribute("proxypath", f->proxy_path);
+
 					for (int j=0;j<f->video_tracks.size();j++) {
 						const FootageStream& ms = f->video_tracks.at(j);
 						stream.writeStartElement("video");
diff --git a/playback/cacher.cpp b/playback/cacher.cpp
index ae08fbb69..0f29b290b 100644
--- a/playback/cacher.cpp
+++ b/playback/cacher.cpp
@@ -673,7 +673,19 @@ void open_clip_worker(Clip* clip) {
 	} else if (clip->media->get_type() == MEDIA_TYPE_FOOTAGE) {
 		// opens file resource for FFmpeg and prepares Clip struct for playback
 		Footage* m = clip->media->to_footage();
-		QByteArray ba = m->url.toUtf8();
+
+		// byte array for retriving raw bytes from QString URL
+		QByteArray ba;
+
+		// do we have a proxy?
+		if (m->proxy
+				&& !m->proxy_path.isEmpty()
+				&& QFileInfo::exists(m->proxy_path)) {
+			ba = m->proxy_path.toUtf8();
+		} else {
+			ba = m->url.toUtf8();
+		}
+
 		const char* filename = ba.constData();
 		const FootageStream* ms = m->get_stream_from_file_index(clip->track < 0, clip->media_stream);
 
diff --git a/playback/playback.cpp b/playback/playback.cpp
index 744723c4e..ce0f1d2d6 100644
--- a/playback/playback.cpp
+++ b/playback/playback.cpp
@@ -13,6 +13,7 @@
 #include "project/media.h"
 #include "io/config.h"
 #include "io/avtogl.h"
+#include "io/proxygenerator.h"
 #include "debug.h"
 
 extern "C" {
@@ -28,6 +29,8 @@ extern "C" {
 #include <QOpenGLTexture>
 #include <QOpenGLPixelTransferOptions>
 #include <QOpenGLFramebufferObject>
+#include <QPainter>
+#include <QCoreApplication>
 
 #ifdef QT_DEBUG
 //#define GCF_DEBUG
@@ -272,14 +275,55 @@ void get_clip_frame(Clip* c, long playhead, bool& texture_failed) {
 			uint8_t* data_buffer_1 = target_frame->data[0];
 			uint8_t* data_buffer_2 = nullptr;
 
-			size_t frame_size;
+			size_t frame_size = size_t(target_frame->linesize[0])*size_t(target_frame->height);
+
+			// if proxy is currently being generated, show an on-screen message of its progress
+			if (c->media->to_footage()->proxy
+					&& c->media->to_footage()->proxy_path.isEmpty()) {
+				// create buffers to draw on
+				data_buffer_1 = new uint8_t[frame_size];
+				data_buffer_2 = new uint8_t[frame_size];
+
+				memcpy(data_buffer_1, target_frame->data[0], frame_size);
+
+				// wrap data in a QImage for painting
+				QImage img(data_buffer_1, target_frame->width, target_frame->height, QImage::Format_RGBA8888);
+
+				// create QPainter process
+				QPainter p(&img);
+
+				// set font color to white
+				p.setPen(Qt::white);
+
+				// set font size relative to frame size (divided by 12)
+				QFont overlay_font = p.font();
+				overlay_font.setPixelSize(target_frame->height/12);
+				p.setFont(overlay_font);
+
+				// generate overlay text
+				QString proxy_overlay_text = QCoreApplication::translate("Playback", "Generating Proxy: %1%").arg(proxy_generator.get_proxy_progress(c->media->to_footage()));
+
+				int text_height = p.fontMetrics().descent() + p.fontMetrics().height();
+
+				// draw semi-transparent black background
+				p.fillRect(QRect(0,
+								 target_frame->height-text_height,
+								 p.fontMetrics().width(proxy_overlay_text),
+								 text_height),
+						   QColor(0, 0, 0, 128)
+					);
+
+
+				// draw text
+				p.drawText(0,
+						   target_frame->height-p.fontMetrics().descent(),
+						   proxy_overlay_text);
+			}
 
 			for (int i=0;i<c->effects.size();i++) {
 				Effect* e = c->effects.at(i);
 				if (e->enable_image && e->is_enabled()) {
 					if (data_buffer_1 == target_frame->data[0]) {
-						frame_size = size_t(target_frame->linesize[0])*size_t(target_frame->height);
-
 						data_buffer_1 = new uint8_t[frame_size];
 						data_buffer_2 = new uint8_t[frame_size];
 
diff --git a/project/footage.cpp b/project/footage.cpp
index c5cdc94e9..82ecc5915 100644
--- a/project/footage.cpp
+++ b/project/footage.cpp
@@ -18,7 +18,8 @@ Footage::Footage() :
 	in(0),
 	out(0),
 	speed(1.0),
-	alpha_is_premultiplied(false)
+	alpha_is_premultiplied(false),
+	proxy(false)
 {
 	ready_lock.lock();
 }
diff --git a/project/footage.h b/project/footage.h
index 56ae6cace..6e5219078 100644
--- a/project/footage.h
+++ b/project/footage.h
@@ -56,6 +56,10 @@ struct Footage {
 	double speed;
 	bool alpha_is_premultiplied;
 
+	// proxy config
+	bool proxy;
+	QString proxy_path;
+
 	PreviewGenerator* preview_gen;
 	QMutex ready_lock;
 
diff --git a/project/sourcescommon.cpp b/project/sourcescommon.cpp
index 957eb5b7a..b856fbcd1 100644
--- a/project/sourcescommon.cpp
+++ b/project/sourcescommon.cpp
@@ -3,13 +3,17 @@
 #include "panels/panels.h"
 #include "project/media.h"
 #include "project/undo.h"
+#include "playback/playback.h"
 #include "panels/timeline.h"
 #include "panels/project.h"
 #include "project/footage.h"
 #include "panels/viewer.h"
 #include "project/projectfilter.h"
+#include "project/sequence.h"
 #include "io/config.h"
 #include "dialogs/proxydialog.h"
+#include "ui/viewerwidget.h"
+#include "io/proxygenerator.h"
 #include "mainwindow.h"
 
 #include <QProcess>
@@ -19,6 +23,8 @@
 #include <QMessageBox>
 #include <QDesktopServices>
 
+#include <QDebug>
+
 SourcesCommon::SourcesCommon(Project* parent) :
 	editing_item(nullptr),
 	project_parent(parent)
@@ -76,11 +82,11 @@ void SourcesCommon::show_context_menu(QWidget* parent, const QModelIndexList& it
 	connect(show_sequences, SIGNAL(triggered(bool)), panel_project->sorter, SLOT(set_show_sequences(bool)));
 
 	if (items.size() > 0) {
-		Media* m = project_parent->item_to_media(items.at(0));
-
 		if (items.size() == 1) {
+			Media* first_media = project_parent->item_to_media(items.at(0));
+
 			// replace footage
-			int type = m->get_type();
+			int type = first_media->get_type();
 			if (type == MEDIA_TYPE_FOOTAGE) {
 				QAction* replace_action = menu.addAction(tr("Replace/Relink Media"));
 				QObject::connect(replace_action, SIGNAL(triggered(bool)), project_parent, SLOT(replace_selected_file()));
@@ -100,11 +106,13 @@ void SourcesCommon::show_context_menu(QWidget* parent, const QModelIndexList& it
 			}
 		}
 
-		// duplicate item
+		// analyze selected footage types
 		bool all_sequences = true;
 		bool all_footage = true;
+
 		cached_selected_footage.clear();
 		for (int i=0;i<items.size();i++) {
+			Media* m = project_parent->item_to_media(items.at(i));
 			if (m->get_type() != MEDIA_TYPE_SEQUENCE) {
 				all_sequences = false;
 			}
@@ -132,9 +140,52 @@ void SourcesCommon::show_context_menu(QWidget* parent, const QModelIndexList& it
 			QObject::connect(delete_footage_from_sequences, SIGNAL(triggered(bool)), project_parent, SLOT(delete_clips_using_selected_media()));
 
 			QMenu* proxies = menu.addMenu(tr("Proxy"));
-			proxies->addAction(tr("Create Proxy"), this, SLOT(open_create_proxy_dialog()));
-//			proxies->addAction(tr("Modify Proxy"));
-//			proxies->addAction(tr("Restore Original"));
+
+			// special case if one footage item is selected and its proxy is currently being generated
+			if (cached_selected_footage.size() == 1
+					&& cached_selected_footage.at(0)->proxy
+					&& cached_selected_footage.at(0)->proxy_path.isEmpty()) {
+				QAction* action = proxies->addAction(tr("Generating proxy: %1% complete").arg(proxy_generator.get_proxy_progress(cached_selected_footage.at(0))));
+				action->setEnabled(false);
+			} else {
+				// determine whether any selected footage has or doesn't have proxies
+				bool footage_without_proxies_exists = false;
+				bool footage_with_proxies_exists = false;
+
+				for (int i=0;i<cached_selected_footage.size();i++) {
+					if (cached_selected_footage.at(i)->proxy) {
+						footage_with_proxies_exists = true;
+					} else {
+						footage_without_proxies_exists = true;
+					}
+				}
+
+				// if footage was selected WITHOUT proxies
+				if (footage_without_proxies_exists) {
+					QString create_proxy_text;
+
+					if (footage_with_proxies_exists) {
+						// some of the footage already has proxies, so we use a different string
+						create_proxy_text = tr("Create/Modify Proxy");
+					} else {
+						// none of the footage has proxies
+						create_proxy_text = tr("Create Proxy");
+					}
+
+					proxies->addAction(create_proxy_text, this, SLOT(open_create_proxy_dialog()));
+				}
+
+				// if footage was selected WITH proxies
+				if (footage_with_proxies_exists) {
+
+					if (!footage_without_proxies_exists) {
+						// if all the footage has proxies, we didn't make a "Create/Modify" above, so we create one here (but only "modify")
+						proxies->addAction(tr("Modify Proxy"), this, SLOT(open_create_proxy_dialog()));
+					}
+
+					proxies->addAction(tr("Restore Original"), this, SLOT(clear_proxies_from_selected()));
+				}
+			}
 		}
 
 		// delete media
@@ -308,3 +359,38 @@ void SourcesCommon::open_create_proxy_dialog() {
 	ProxyDialog pd(mainWindow, cached_selected_footage);
 	pd.exec();
 }
+
+void SourcesCommon::clear_proxies_from_selected() {
+	QList<QString> delete_list;
+
+	for (int i=0;i<cached_selected_footage.size();i++) {
+		Footage* f = cached_selected_footage.at(i);
+
+		if (f->proxy && !f->proxy_path.isEmpty()) {
+			if (QFileInfo::exists(f->proxy_path)) {
+				if (QMessageBox::question(mainWindow,
+									  tr("Delete proxy"),
+									  tr("Would you like to delete the proxy file \"%1\" as well?").arg(f->proxy_path),
+										  QMessageBox::Yes | QMessageBox::No) == QMessageBox::Yes) {
+					delete_list.append(f->proxy_path);
+				}
+			}
+		}
+
+		f->proxy = false;
+		f->proxy_path.clear();
+	}
+
+	if (sequence != nullptr) {
+		// close all clips so we can delete any proxies requested to be deleted
+		closeActiveClips(sequence);
+
+		// delete proxies requested to be deleted
+		for (int i=0;i<delete_list.size();i++) {
+			QFile::remove(delete_list.at(i));
+		}
+
+		// update viewer (will re-open active clips with original media)
+		panel_sequence_viewer->viewer_widget->frame_update();
+	}
+}
diff --git a/project/sourcescommon.h b/project/sourcescommon.h
index 3c15e5ae2..1eb816129 100644
--- a/project/sourcescommon.h
+++ b/project/sourcescommon.h
@@ -30,7 +30,10 @@ private slots:
 	void reveal_in_browser();
 	void rename_interval();
 	void item_renamed(Media *item);
+
+	// proxy functions
 	void open_create_proxy_dialog();
+	void clear_proxies_from_selected();
 private:
 	Media* editing_item;
 	QModelIndex editing_index;
diff --git a/ui/renderthread.cpp b/ui/renderthread.cpp
index a8ef4fee5..b85a3d349 100644
--- a/ui/renderthread.cpp
+++ b/ui/renderthread.cpp
@@ -58,7 +58,6 @@ void RenderThread::run() {
 					ctx->functions()->glGenFramebuffers(1, &back_buffer_2);
 				}
 
-
 				// gen texture
 				if (front_texture == 0 || tex_width != seq->width || tex_height != seq->height) {
 					// cache texture size