diff --git a/src/popupwin.c b/src/popupwin.c
index 8e981b0..947dd91 100644
--- a/src/popupwin.c
+++ b/src/popupwin.c
@@ -1127,7 +1127,7 @@
     int		org_height = wp->w_height;
     int		org_leftcol = wp->w_leftcol;
     int		org_leftoff = wp->w_popup_leftoff;
-    int		minwidth;
+    int		minwidth, minheight;
     int		wantline = wp->w_wantline;  // adjusted for textprop
     int		wantcol = wp->w_wantcol;    // adjusted for textprop
     int		use_wantcol = wantcol != 0;
@@ -1249,6 +1249,18 @@
 	maxwidth = wp->w_maxwidth;
     }
     minwidth = wp->w_minwidth;
+    minheight = wp->w_minheight;
+#ifdef FEAT_TERMINAL
+    // A terminal popup initially does not have content, use a default minimal
+    // width of 20 characters and height of 5 lines.
+    if (wp->w_buffer->b_term != NULL)
+    {
+	if (minwidth == 0)
+	    minwidth = 20;
+	if (minheight == 0)
+	    minheight = 5;
+    }
+#endif
 
     // start at the desired first line
     if (wp->w_firstline > 0)
@@ -1419,8 +1431,8 @@
 
     wp->w_height = wp->w_buffer->b_ml.ml_line_count - wp->w_topline
 								 + 1 + wrapped;
-    if (wp->w_minheight > 0 && wp->w_height < wp->w_minheight)
-	wp->w_height = wp->w_minheight;
+    if (minheight > 0 && wp->w_height < minheight)
+	wp->w_height = minheight;
     if (wp->w_maxheight > 0 && wp->w_height > wp->w_maxheight)
 	wp->w_height = wp->w_maxheight;
     w_height_before_limit = wp->w_height;
diff --git a/src/testdir/dumps/Test_terminal_popup_m1.dump b/src/testdir/dumps/Test_terminal_popup_m1.dump
new file mode 100644
index 0000000..05a78f2
--- /dev/null
+++ b/src/testdir/dumps/Test_terminal_popup_m1.dump
@@ -0,0 +1,15 @@
+|0+0&#ffffff0| @73
+|1| @73
+|2| @73
+|3| @73
+|4| @24|╔+0#0000001#ffd7ff255|═@19|╗| +0#0000000#ffffff0@26
+|5| @24|║+0#0000001#ffd7ff255|a|n|o|t|h|e|r| |t|e|x|t| @7|║| +0#0000000#ffffff0@26
+|6| @24|║+0#0000001#ffd7ff255|t|o| |s|h|o|w| @12|║| +0#0000000#ffffff0@26
+|7| @24|║+0#0000001#ffd7ff255|i|n| |a| |p|o|p|u|p| |w|i|n|d|o|w| @2|║| +0#0000000#ffffff0@26
+|8| @24|║+0#0000001#ffd7ff255| +0#4040ff13&> @18|║+0#0000001&| +0#0000000#ffffff0@26
+|9| @24|║+0#0000001#ffd7ff255| +0#4040ff13&@19|║+0#0000001&| +0#0000000#ffffff0@26
+|1|0| @23|╚+0#0000001#ffd7ff255|═@19|╝| +0#0000000#ffffff0@26
+|1@1| @72
+|1|2| @72
+|1|3| @72
+|:| @55|1|,|1| @10|T|o|p| 
diff --git a/src/testdir/test_terminal.vim b/src/testdir/test_terminal.vim
index e452e45..88e433d 100644
--- a/src/testdir/test_terminal.vim
+++ b/src/testdir/test_terminal.vim
@@ -2400,6 +2400,43 @@
   call term_wait(buf, 100)  " wait for terminal to vanish
 
   call StopVimInTerminal(buf)
+  call delete('Xtext')
+  call delete('XtermPopup')
+endfunc
+
+" Check a terminal in popup window uses the default mininum size.
+func Test_terminal_in_popup_min_size()
+  CheckRunVimInTerminal
+
+  let text =<< trim END
+    another text
+    to show
+    in a popup window
+  END
+  call writefile(text, 'Xtext')
+  let lines = [
+	\ 'set t_u7=',
+	\ 'call setline(1, range(20))',
+	\ 'hi PopTerm ctermbg=grey',
+	\ 'func OpenTerm()',
+	\ "  let s:buf = term_start('cat Xtext', #{hidden: 1})",
+	\ '  let g:winid = popup_create(s:buf, #{ border: []})',
+	\ 'endfunc',
+	\ ]
+  call writefile(lines, 'XtermPopup')
+  let buf = RunVimInTerminal('-S XtermPopup', #{rows: 15})
+  call term_wait(buf, 100)
+  call term_sendkeys(buf, "\<C-L>")
+  call term_sendkeys(buf, ":call OpenTerm()\<CR>")
+  call term_wait(buf, 100)
+  call term_sendkeys(buf, ":\<CR>")
+  call VerifyScreenDump(buf, 'Test_terminal_popup_m1', {})
+
+  call term_wait(buf, 100)
+  call term_sendkeys(buf, ":q\<CR>")
+  call term_wait(buf, 100)  " wait for terminal to vanish
+  call StopVimInTerminal(buf)
+  call delete('Xtext')
   call delete('XtermPopup')
 endfunc
 
diff --git a/src/version.c b/src/version.c
index 75baad1..2d5c134 100644
--- a/src/version.c
+++ b/src/version.c
@@ -739,6 +739,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    380,
+/**/
     379,
 /**/
     378,