diff --git a/main.c b/main.c
index d974ab0..3f1d059 100644
--- a/main.c
+++ b/main.c
@@ -4,13 +4,89 @@
  * License: GPL
  */
 
+#include <avr/interrupt.h>
 #include <avr/io.h>
+#include <avr/sleep.h>
+
+
+/* IR modulation frequency (in Hz) */
+#define IR_MODULATION 38000
+
+/* IR receive pin (demodulated, negative logic) */
+#define IR_RX PINB0
+/* IR transmit pin */
+#define IR_TX PINB1
+
+/* enable modulated IR transmit (via Timer1) */
+#define IR_TX_ON()  do { TCCR1 |= _BV(COM1A1); } while (0)
+/* disable modulated IR transmit (via Timer1) */
+#define IR_TX_OFF() do { TCCR1 &= ~_BV(COM1A1); } while (0)
+
+
+/* IR receiver pin change interrupt */
+ISR(PCINT0_vect)
+{
+    /* test IR_RX pin (negative logic) */
+    if (PINB & _BV(IR_RX))
+    {
+        IR_TX_OFF();
+    }
+    else
+    {
+        IR_TX_ON();
+    }
+}
+
+
+void setup(void)
+{
+    /*
+     * IR receiver setup
+     */
+
+    /* set IR_RX as input */
+    DDRB &= _BV(IR_RX);
+    /* enable interrupt on change of IR_RX */
+    PCMSK |= _BV(PCINT0);
+    GIMSK |= _BV(PCIE);
+
+    /*
+     * IR transmitter setup
+     */
+
+    /* enable IR modulation (50% duty cycle) via Timer1 */
+    TCCR1 = _BV(PWM1A) | _BV(CS12);
+    OCR1C = (((F_CPU / 8 / IR_MODULATION)) - 1);
+    OCR1A = OCR1C / 2;
+    /* set IR_TX as output */
+    DDRB |= _BV(IR_TX);
+    /* turn IR_TX off when not enabled */
+    PORTB &= ~_BV(IR_TX);
+
+    /*
+     * Power saving
+     */
+
+    /* disable unnecessary hardware */
+    PRR |= _BV(PRADC) | _BV(PRUSI);
+    /* enable idle sleep mode */
+    set_sleep_mode(SLEEP_MODE_IDLE);
+}
+
 
 int main(void)
 {
-    /* insert your hardware initialization here */
-    for(;;){
-        /* insert your main loop code here */
+    /* initialize hardware */
+    setup();
+
+    /* enable interrupts */
+    sei();
+
+    for (;;)
+    {
+        /* go to sleep (all work done in PCINT0 ISR) */
+        sleep_mode();
     }
+
     return 0;   /* never reached */
 }