diff --git a/client.c b/client.c
index 66495ce..c96bf43 100644
--- a/client.c
+++ b/client.c
@@ -86,32 +86,31 @@ int client_write(struct client_t *client, char *databuf, int datalen) {
 /* Waits for client input in "line mode". Blocks until input arrives. */
 int client_wait_line(struct client_t *client) {
 	
-	int ret;
 	fd_set read_fds;
+	struct timeval tv;
 	
 	client->data[0] = '\0';
 	/* loop waiting for client input */
 	while (client->data[0] == '\0') {
 		/* setup select() parameters */
+		tv.tv_sec = 15; /* 15 second timeout */
+		tv.tv_usec = 0;
 		FD_ZERO(&read_fds);
 		FD_SET(client->socket, &read_fds);
 		/* send prompt character to client */
 		client_write(client, "> ", 2);
 		/* block until input arrives */
-		if (select((client->socket)+1, &read_fds, NULL, NULL, NULL) == -1) return -1;
+		if (select((client->socket)+1, &read_fds, NULL, NULL, &tv) <= 0) return -1;
 		if (FD_ISSET(client->socket, &read_fds)) {
 			/* read client input */
-			ret = client_read(client);
-			if (ret == -1) return -1;
+			if (client_read(client) == -1) return -1;
 			/* we don't want empty data so stop on \r or \n */
 			if ( (client->data[0] == '\r') || (client->data[0] == '\n') ) {
-				fprintf(stderr, "client data is empty\n");
 				client->data[0] = '\0';
 			}
 		}
 	}
 	
-	fprintf(stderr, "client data: %s\n", client->data);
 	return 0;
 }
 
diff --git a/moxerver.c b/moxerver.c
index fd66249..13dcdee 100644
--- a/moxerver.c
+++ b/moxerver.c
@@ -11,7 +11,7 @@
 
 #define NAME "moxerver"
 
-#define SERVER_WAIT_TIMEOUT 5 /* seconds for select() timeout in server loop */
+#define SERVER_WAIT_TIMEOUT 2 /* seconds for select() timeout in server loop */
 
 /* Prints help message. */
 static void usage() {
@@ -82,15 +82,14 @@ int main(int argc, char *argv[]) {
 	int fdmax;
 	struct timeval tv;
 
-	pthread_t tty_thread; 
+	pthread_t tty_thread, new_client_thread;
 
 	/* zero init tty_dev */
 	if (cfsetispeed(&(tty_dev.ttyset), B0) < 0 || 
 		cfsetospeed(&(tty_dev.ttyset), B0) < 0) {
 		fprintf(stderr, "[%s] error configuring tty device speed\n", NAME);
 		return -1;
-   	}
-
+	}
 	
 	/* enable catching and handling some quit signals, SIGKILL can't be caught */
 	signal(SIGTERM, quit_handler);
@@ -141,6 +140,7 @@ int main(int argc, char *argv[]) {
 	/* initialize */
 	if (server_setup(&server, tcp_port) < 0) return -1;
 	client.socket = -1;
+	new_client.socket = -1;
 	tty_dev.fd = -1;
 	
 	/* parse config file if any */
@@ -150,7 +150,7 @@ int main(int argc, char *argv[]) {
 		return -1;
 	}
 	else if (!def_conf && ret) {
-		fprintf(stderr, "[%s] error parsing congig file %s on line %d\n", NAME, CONFILE, ret);
+		fprintf(stderr, "[%s] error parsing config file %s on line %d\n", NAME, CONFILE, ret);
 		return -1;
 	}
 	
@@ -177,9 +177,25 @@ int main(int argc, char *argv[]) {
 		return -1;
 	}
 	
-	/* loop with timeouts waiting for client connection and data */
+	/* loop with timeouts waiting for client connection requests and data */
 	while (1) {
 		
+		/* check if new client is availabe for connection */
+		if ( (client.socket == -1) && (new_client.socket != -1) ) {
+			/* copy new client information */
+			memcpy(&client, &new_client, sizeof(struct client_t));
+			new_client.socket = -1;
+			fprintf(stderr, "[%s] client %s connected\n", NAME, client.ip_string);
+			/* ask client to provide a username before going to "character" mode */
+			if (client_ask_username(&client) != 0) {
+				/* close client if not able to provide a username */
+				client_close(&client);
+				continue;
+			}
+			/* put client in "character" mode */
+			telnet_set_character_mode(&client);
+		}
+		
 		/* setup parameters for select() */
 		tv.tv_sec = SERVER_WAIT_TIMEOUT;
 		tv.tv_usec = 0;
@@ -188,7 +204,7 @@ int main(int argc, char *argv[]) {
 		if (client.socket != -1) {
 			FD_SET(client.socket, &read_fds); /* wait for client if connected */
 		}
-		fdmax = (server.socket > client.socket) ? server.socket : client.socket;		
+		fdmax = (server.socket > client.socket) ? server.socket : client.socket;
 		
 		/* wait with select() */
 		ret = select(fdmax+1, &read_fds, NULL, NULL, &tv);
@@ -201,36 +217,11 @@ int main(int argc, char *argv[]) {
 			/* check server status */
 			if (FD_ISSET(server.socket, &read_fds)) {
 				fprintf(stderr, "[%s] received client connection request\n", NAME);
-				/* accept connection request if no client is connected */
-				if (client.socket == -1) {
-					ret = server_accept(&server, &client);
-					if ( ret != 0) {
-						/* print error but continue waiting for connection request */
-						//TODO maybe we should break here to avoid endless loop, what are possible causes of this failure?
-						fprintf(stderr, "[%s] problem accepting client\n", NAME);
-						continue;
-					}
-					/* ask client to provide a username before going to "character" mode */
-					client_ask_username(&client);
-					/* put client in "character" mode */
-					telnet_set_character_mode(&client);
-				}
-				/* if a client is already connected then new clients need to be handled */
-				else {
-					/* decide if current client needs to be dropped or new client needs to be rejected */
-					ret = server_drop(&server, &client);
-					if (ret < 0) {
-						/* error in handling new clients, print but continue waiting for new clients */
-						fprintf(stderr, "[%s] problem handling new client request\n", NAME);
-						continue;
-					}
-					/* if current client was dropped we need to set up new client */
-					if (ret > 0) {
-						/* ask client to provide a username before going to "character" mode */
-						client_ask_username(&client);
-						/* put client in "character" mode */
-						telnet_set_character_mode(&client);
-					}
+				/* handle new client connection request in a separate thread */
+				if (pthread_create(&new_client_thread, NULL, server_new_client_thread, NULL) != 0) {
+					/* print error but continue waiting for connection request */
+					fprintf(stderr, "[%s] problem with handling client connection request\n", NAME);
+					continue;
 				}
 			}
 			/* check client status if connected */
diff --git a/moxerver.h b/moxerver.h
index 797d123..427f9bd 100644
--- a/moxerver.h
+++ b/moxerver.h
@@ -21,34 +21,35 @@
 
 /* Structures used for communication parameters. */
 struct server_t {
-	int socket; 					/* server socket */
-	struct sockaddr_in address; 	/* server address information */
+	int socket;						/* server socket */
+	struct sockaddr_in address;		/* server address information */
 	unsigned int port;				/* server port in host byte order, practical reference */
 };
 
 struct client_t {
-	int socket; 						/* client socket */
-	struct sockaddr_in address; 		/* client address information */
-	char ip_string[INET_ADDRSTRLEN]; 	/* client IP address as a string */
-	time_t last_active; 				/* time of client's last activity in seconds from Epoch */
-	char username[USERNAME_LEN]; 		/* username for human identification */
-	char data[DATABUF_LEN]; 			/* buffer for data received from client */
+	int socket;							/* client socket */
+	struct sockaddr_in address;			/* client address information */
+	char ip_string[INET_ADDRSTRLEN];	/* client IP address as a string */
+	time_t last_active;					/* time of client's last activity in seconds from Epoch */
+	char username[USERNAME_LEN];		/* username for human identification */
+	char data[DATABUF_LEN];				/* buffer for data received from client */
 };
 
 struct tty_t {
-	int fd; 					/* tty file descriptor */
+	int fd;						/* tty file descriptor */
 	struct termios ttysetdef;	/* default tty termios settings */
 	struct termios ttyset;		/* tty termios settings */
-	char path[DEV_PATH]; 		/* tty device path */
-	char data[DATABUF_LEN]; 	/* buffer for data received from tty */
+	char path[DEV_PATH];		/* tty device path */
+	char data[DATABUF_LEN];		/* buffer for data received from tty */
 };
 
 
 /* Global variables used throughout the application. */
-int debug_messages; 		/* if > 0 debug messages will be printed */
-struct server_t server; 	/* main server structure */
-struct client_t client; 	/* connected client structure */ //TODO working with only 1 client, this can be expanded into a list
-struct tty_t tty_dev;		/* connected tty device */
+int debug_messages;				/* if > 0 debug messages will be printed */
+struct server_t server;			/* main server structure */
+struct client_t client;			/* connected client structure */ //TODO working with only 1 client, this can be expanded into a list
+struct client_t new_client;		/* client structure for new client request */
+struct tty_t tty_dev;			/* connected tty device */
 
 
 /* Global functions used throughout the application. */
@@ -91,15 +92,17 @@ int server_close(struct server_t *server);
 int server_accept(struct server_t *server, struct client_t *accepted_client);
 
 /**
- * Asks new incoming client connection if current client needs to be dropped.
- * If current client doesn't need to be dropped then new client is rejected.
+ * Thread function handling new client connections.
+ * If there is no connected client then first client request is accepted.
+ * If there is a connected client then new client is asked if connected client should be dropped.
  * 
  * Returns:
- * - positive value if current client was dropped 
- * - 0 if new client was rejected
- * - negative value if error occurred
+ * Return value from this thread function is not used.
+ * Function handles global client variables:
+ * - client structure is reset if new client is available to connect to
+ * - new_client structure stores information about the client to connect to
  */
-int server_drop(struct server_t *server, struct client_t *client);
+void* server_new_client_thread(void *args);
 
 
 /* Functions handling communication with clients. */
diff --git a/server.c b/server.c
index a068d61..b426b8d 100644
--- a/server.c
+++ b/server.c
@@ -47,8 +47,8 @@ int server_setup(struct server_t *server, unsigned int port) {
 	server->port = port;
 	fprintf(stderr,"[%s] assigned port %u\n", __func__, server->port); //ntohs(server->address.sin_port)
 	
-	/* listen for a client connection, allow 2 connections in queue */
-	if (listen(server->socket, 2) == -1) {
+	/* listen for a client connection, allow some connections in queue */
+	if (listen(server->socket, 1) == -1) {
 		fprintf(stderr, "[%s:%d] error %d: %s\n", __func__, __LINE__, errno, strerror(errno));
 		return -errno;
 	}
@@ -98,58 +98,69 @@ int server_accept(struct server_t *server, struct client_t *accepted_client) {
 	
 	/* print client information */
 	time2string(accepted_client->last_active, timestamp);
-	fprintf(stderr, "[%s] accepted client %s on port %u @ %s\n", __func__,
-			accepted_client->ip_string, server->port, timestamp);
+	fprintf(stderr, "[%s] accepted client %s @ %s\n",
+			__func__, accepted_client->ip_string, timestamp);
 	return 0;
 }
 
-/* Drops current client or rejects new client. */
-int server_drop(struct server_t *server, struct client_t *current_client) {
+/* Thread function handling new client connections. Handles global client variables. */
+void* server_new_client_thread(void *args) {
 	
-	struct client_t new_client;
 	char msg[DATABUF_LEN];
 	char timestamp[TIMESTAMP_LEN];
+	struct client_t temp_client;
 	
 	/* accept new connection request */
-	if (server_accept(server, &new_client) != 0) return -1;
+	if (server_accept(&server, &temp_client) != 0) return (void *) -1;
+	
+	/* if no client is connected then make new client available for connection */
+	if (client.socket == -1) {
+		memcpy(&new_client, &temp_client, sizeof(struct client_t));
+		return (void *) 0;
+	}
+	
+	/* if there is already a new client being handled then reject this client request */
+	if (new_client.socket != -1) {
+		sprintf(msg, "\nToo many connection requests, please try later.\n");
+		send(temp_client.socket, msg, strlen(msg), 0);
+		client_close(&temp_client);
+		time2string(time(NULL), timestamp);
+		fprintf(stderr, "[%s] rejected new client request %s @ %s\n",
+				__func__, temp_client.ip_string, timestamp);
+		return (void *) 0;
+	}
+	
+	/* make new client available for connection */
+	memcpy(&new_client, &temp_client, sizeof(struct client_t));
 	
 	/* inform new client that port is already in use */
-	time2string(current_client->last_active, timestamp);
+	time2string(client.last_active, timestamp);
 	sprintf(msg, "\nPort %u is already being used!\nCurrent user and last activity:\n%s @ %s\n",
-			server->port, current_client->username, timestamp);
+			server.port, client.username, timestamp);
 	send(new_client.socket, msg, strlen(msg), 0);
 	
 	/* ask new client if current client should be dropped */
-	sprintf(msg, "\nDo you want to drop the current user?\nIf yes then please type YES DROP (in uppercase):");
+	sprintf(msg, "\nDo you want to drop the current user?\nIf yes then please type YES DROP (in uppercase):\n");
 	send(new_client.socket, msg, strlen(msg), 0);
 	
 	/* wait for client input */
-	if (client_wait_line(&new_client) != 0) return -1;
+	client_wait_line(&new_client);
 	
 	/* check client confirmation */
 	if (strncmp(new_client.data, "YES DROP", 8) == 0) {
-		/* current client should be dropped, drop it */
-		client_close(current_client);
-		time2string(time(NULL), timestamp);
-		fprintf(stderr, "[%s] dropped current client %s on port %u @ %s\n", __func__,
-				current_client->ip_string, server->port, timestamp);
-		/* make new client the current client */
-		memcpy(current_client, &new_client, sizeof(struct client_t));
-		time2string(time(NULL), timestamp);
-		fprintf(stderr, "[%s] accepted new client request %s on port %u @ %s\n", __func__,
-				current_client->ip_string, server->port, timestamp);
-		/* return 1 because current client was dropped */
-		return 1;
+		/* drop connected client */
+		client_close(&client);
+		fprintf(stderr, "[%s] dropped client %s @ %s\n",
+			   __func__, client.ip_string, timestamp);
 	}
 	else {
-		/* new connection should be rejected, close connection */
-		close(new_client.socket);
+		/* reject this client request */
+		client_close(&new_client);
 		time2string(time(NULL), timestamp);
-		fprintf(stderr, "[%s] rejected new client request %s on port %u @ %s\n", __func__,
-				new_client.ip_string, server->port, timestamp);
-		/* return 0 because new client was rejected */
-		return 0;
+		fprintf(stderr, "[%s] rejected new client request %s @ %s\n",
+				__func__, temp_client.ip_string, timestamp);
+		return (void *) 1;
 	}
 	
-	
+	return (void *) 0;
 }