diff --git a/includes/form.inc b/includes/form.inc
index 8f2ee26..feaf629 100644
--- a/includes/form.inc
+++ b/includes/form.inc
@@ -3839,38 +3839,72 @@ function theme_form_element($variables) {
   if (!empty($element['#attributes']['disabled'])) {
     $attributes['class'][] = 'form-disabled';
   }
+
+  $has_element_children = false;
+  foreach (array_keys($element) as $key) {
+    if (substr($key, 0, 1) !== '#') {
+      $has_element_children = true;
+      break;
+    }
+  }
+
   $output = '<div' . drupal_attributes($attributes) . '>' . "\n";
 
+  if ($has_element_children) {
+    $output .= '<fieldset' . drupal_attributes(array('class' => 'fieldset-invisible')) . '>';
+  }
+
   // If #title is not set, we don't display any label or required marker.
   if (!isset($element['#title'])) {
     $element['#title_display'] = 'none';
   }
   $prefix = isset($element['#field_prefix']) ? '<span class="field-prefix">' . $element['#field_prefix'] . '</span> ' : '';
   $suffix = isset($element['#field_suffix']) ? ' <span class="field-suffix">' . $element['#field_suffix'] . '</span>' : '';
+  $children = ' ' . $prefix . $element['#children'] . $suffix;
+
+  // Generate the title, either a legend or a label, only if the title will be used
+  if (!in_array($element['#title_display'], array('none', 'attribute'))) {
+    if ($has_element_children) {
+      $attributes = array();
+      if ($element['#title_display'] == 'invisible') {
+        $attributes['class'] = 'element-invisible';
+      }
+      $title = '<legend' . drupal_attributes($attributes) . '>' . $element['#title'];
+      if (!empty($element['#required'])) {
+        $title .= theme('form_required_marker', array('element' => $element));
+      }
+      $title .= '</legend>';
+    } else {
+      $title = ' ' . theme('form_element_label', $variables);
+    }
+  }
 
   switch ($element['#title_display']) {
     case 'before':
     case 'invisible':
-      $output .= ' ' . theme('form_element_label', $variables);
-      $output .= ' ' . $prefix . $element['#children'] . $suffix . "\n";
+      $output .= $title . $children;
       break;
 
     case 'after':
-      $output .= ' ' . $prefix . $element['#children'] . $suffix;
-      $output .= ' ' . theme('form_element_label', $variables) . "\n";
+      $output .= $children . $title;
       break;
 
     case 'none':
     case 'attribute':
       // Output no label and no required marker, only the children.
-      $output .= ' ' . $prefix . $element['#children'] . $suffix . "\n";
+      $output .= $children;
       break;
   }
+  $output .= "\n";
 
   if (!empty($element['#description'])) {
     $output .= '<div class="description">' . $element['#description'] . "</div>\n";
   }
 
+  if ($has_element_children) {
+    $output .= '</fieldset>';
+  }
+
   $output .= "</div>\n";
 
   return $output;
diff --git a/modules/simpletest/tests/form.test b/modules/simpletest/tests/form.test
index e7ae9de..10f669b 100644
--- a/modules/simpletest/tests/form.test
+++ b/modules/simpletest/tests/form.test
@@ -65,7 +65,7 @@ class FormsTestCase extends DrupalWebTestCase {
     $elements['file']['empty_values'] = $empty_strings;
 
     // Regular expression to find the expected marker on required elements.
-    $required_marker_preg = '@<label.*<span class="form-required" title="This field is required\.">\*</span></label>@';
+    $required_marker_preg = '@<(label|legend).*<span class="form-required" title="This field is required\.">\*</span></\1>@';
 
     // Go through all the elements and all the empty values for them.
     foreach ($elements as $type => $data) {
diff --git a/modules/system/system.theme.css b/modules/system/system.theme.css
index d8dbc51..09a60f3 100644
--- a/modules/system/system.theme.css
+++ b/modules/system/system.theme.css
@@ -185,6 +185,48 @@ html.js fieldset.collapsed .fieldset-legend {
 }
 
 /**
+ * Invisible fieldsets.
+ *
+ * @see theme_form_element()
+ */
+fieldset.fieldset-invisible {
+  margin: 0;
+  padding: 0;
+  border: none;
+  display: inherit;
+}
+fieldset.fieldset-invisible > legend {
+  margin: 0;
+  padding: 0;
+  border: none;
+  outline: 0;
+  font-style: inherit;
+  font-size: 100%;
+  font-family: inherit;
+  vertical-align: baseline;
+
+  border-radius: 0;
+  color: inherit;
+  background-color: transparent;
+  background-image: none;
+
+  display: block;
+  font-weight: bold;
+
+  position: static;
+  left: 0;
+  right: 0;
+  top: 0;
+  bottom: 0;
+  
+  text-indent: 0;
+  text-shadow: none;
+  line-height: normal;
+  width: auto;
+  height: auto;
+}
+
+/**
  * TableDrag behavior.
  *
  * @see tabledrag.js