diff --git a/src/term.c b/src/term.c
index eb34c8b..b806a89 100644
--- a/src/term.c
+++ b/src/term.c
@@ -4637,6 +4637,7 @@
 	// "xterm-256color" but are not fully xterm compatible.
 	//
 	// Gnome terminal sends 1;3801;0, 1;4402;0 or 1;2501;0.
+	// Newer Gnome-terminal sends 65;6001;1.
 	// xfce4-terminal sends 1;2802;0.
 	// screen sends 83;40500;0
 	// Assuming any version number over 2500 is not an
@@ -4688,7 +4689,7 @@
 
 	// Unless the underline RGB color is expected to work, disable "t_8u".
 	// It does not work for the real Xterm, it resets the background color.
-	if (term_props[TPR_UNDERLINE_RGB].tpr_status == TPR_YES && *T_8U != NUL)
+	if (term_props[TPR_UNDERLINE_RGB].tpr_status != TPR_YES && *T_8U != NUL)
 	    T_8U = empty_option;
 
 	// Only set 'ttymouse' automatically if it was not set
diff --git a/src/testdir/test_termcodes.vim b/src/testdir/test_termcodes.vim
index 82f5f41..27c2a18 100644
--- a/src/testdir/test_termcodes.vim
+++ b/src/testdir/test_termcodes.vim
@@ -1013,6 +1013,8 @@
   call test_override('term_props', 1)
 
   set ttymouse=xterm
+  " t_8u is not reset
+  let &t_8u = "\<Esc>[58;2;%lu;%lu;%lum"
   call test_option_not_set('ttymouse')
   let seq = "\<Esc>[>1;95;0c"
   call feedkeys(seq, 'Lx!')
@@ -1025,6 +1027,7 @@
         \ underline_rgb: 'y',
         \ mouse: 's'
         \ }, terminalprops())
+  call assert_equal("\<Esc>[58;2;%lu;%lu;%lum", &t_8u)
 
   " Reset is_not_xterm and is_mac_terminal.
   set t_RV=
@@ -1158,9 +1161,10 @@
         \ mouse: 's'
         \ }, terminalprops())
 
-  " xterm >= 279: "sgr" and cursor_style not reset
+  " xterm >= 279: "sgr" and cursor_style not reset; also check t_8u reset
   set ttymouse=xterm
   call test_option_not_set('ttymouse')
+  let &t_8u = "\<Esc>[58;2;%lu;%lu;%lum"
   let seq = "\<Esc>[>0;279;0c"
   call feedkeys(seq, 'Lx!')
   call assert_equal(seq, v:termresponse)
@@ -1172,6 +1176,7 @@
         \ underline_rgb: 'u',
         \ mouse: 's'
         \ }, terminalprops())
+  call assert_equal('', &t_8u)
 
   set t_RV=
   call test_override('term_props', 0)
diff --git a/src/version.c b/src/version.c
index 9f71e50..f2170ef 100644
--- a/src/version.c
+++ b/src/version.c
@@ -755,6 +755,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    977,
+/**/
     976,
 /**/
     975,