Evolutionary Testing (ET) has been shown to be very successful in testing real world applications [16]. However, it has been pointed out [11], that further research is necessary if flag variables appear in program expressions. The problems increase when ET is used to test state-based applications where the encoding of states hinders successful evolutionary tests. This is because the ET performance is reduced to a random test in case of the use of flag variables or variables that encode an enumeration type. The authors have developed an ET System to provide easy access to automatic testing. An extensive set of programs has been tested using this system [4], [16]. This system is extended for new areas of software testing and research has been carried out to improve its performance. This paper introduces a new approach for solving ET problems with flag conditions. The problematic constructs are explained with the help of code examples originally found in large real world applications.