diff --git a/src/testdir/dumps/Test_popupwin_term_01.dump b/src/testdir/dumps/Test_popupwin_term_01.dump
new file mode 100644
index 0000000..edc0b00
--- /dev/null
+++ b/src/testdir/dumps/Test_popupwin_term_01.dump
@@ -0,0 +1,10 @@
+|$+0&#ffffff0| @73
+@75
+@34|╔+0#0000001#ffd7ff255|═@3|╗| +0#0000000#ffffff0@34
+@34|║+0#0000001#ffd7ff255|1@3|║| +0#0000000#ffffff0@34
+|!+0#ffffff16#00e0003|/|b|i|n|/|s|h| |[|r|u|n@1|i|n|g|]| @15|║+0#0000001#ffd7ff255|2@3|║| +0#ffffff16#00e0003@34
+> +0#0000000#ffffff0@33|╚+0#0000001#ffd7ff255|═@3|⇲| +0#0000000#ffffff0@34
+|~+0#4040ff13&| @73
+|~| @73
+|[+3#0000000&|N|o| |N|a|m|e|]| @65
+| +0&&@74
diff --git a/src/testdir/dumps/Test_popupwin_term_02.dump b/src/testdir/dumps/Test_popupwin_term_02.dump
new file mode 100644
index 0000000..d5636c9
--- /dev/null
+++ b/src/testdir/dumps/Test_popupwin_term_02.dump
@@ -0,0 +1,10 @@
+|$+0&#ffffff0| @73
+@75
+@14|╔+0#0000001#ffd7ff255|═@3|╗| +0#0000000#ffffff0@54
+@14|║+0#0000001#ffd7ff255|1@3|║| +0#0000000#ffffff0@54
+|!+0#ffffff16#00e0003|/|b|i|n|/|s|h| |[|r|u|n@1|║+0#0000001#ffd7ff255|2@3|║| +0#ffffff16#00e0003@54
+> +0#0000000#ffffff0@13|╚+0#0000001#ffd7ff255|═@3|⇲| +0#0000000#ffffff0@54
+|~+0#4040ff13&| @73
+|~| @73
+|[+3#0000000&|N|o| |N|a|m|e|]| @65
+|:+0&&|c|a|l@1| |D|r|a|g|i|t|(|)| @60
diff --git a/src/testdir/test_popupwin.vim b/src/testdir/test_popupwin.vim
index 8631c71..140f682 100644
--- a/src/testdir/test_popupwin.vim
+++ b/src/testdir/test_popupwin.vim
@@ -577,6 +577,40 @@
   call delete('XtestPopupDrag')
 endfunc
 
+func Test_popup_drag_termwin()
+  CheckUnix
+  CheckScreendump
+  CheckFeature terminal
+
+  " create a popup that covers the terminal window
+  let lines =<< trim END
+	set shell=/bin/sh noruler
+        terminal
+	$wincmd w
+	let winid = popup_create(['1111', '2222'], #{
+	      \ drag: 1,
+	      \ resize: 1,
+	      \ border: [],
+	      \ line: 3,
+	      \ })
+	func Dragit()
+	  call feedkeys("\<F3>\<LeftMouse>\<F4>\<LeftDrag>\<LeftRelease>", "xt")
+	endfunc
+	map <silent> <F3> :call test_setmouse(3, &columns / 2)<CR>
+	map <silent> <F4> :call test_setmouse(3, &columns / 2 - 20)<CR>
+  END
+  call writefile(lines, 'XtestPopupTerm')
+  let buf = RunVimInTerminal('-S XtestPopupTerm', #{rows: 10})
+  call VerifyScreenDump(buf, 'Test_popupwin_term_01', {})
+
+  call term_sendkeys(buf, ":call Dragit()\<CR>")
+  call VerifyScreenDump(buf, 'Test_popupwin_term_02', {})
+
+  " clean up
+  call StopVimInTerminal(buf)
+  call delete('XtestPopupTerm')
+endfunc
+
 func Test_popup_close_with_mouse()
   CheckScreendump