diff --git a/src/term.c b/src/term.c
index 3efa7a7..2c0d35a 100644
--- a/src/term.c
+++ b/src/term.c
@@ -1864,7 +1864,12 @@
 	}
 #  endif
 	if (p != NULL)
+	{
 	    set_option_value((char_u *)"ttym", 0L, p, 0);
+	    /* Reset the WAS_SET flag, 'ttymouse' can be set to "sgr" or
+	     * "xterm2" in check_termcode(). */
+	    reset_option_was_set((char_u *)"ttym");
+	}
 	if (p == NULL
 #   ifdef FEAT_GUI
 		|| gui.in_use