diff --git a/src/terminal.c b/src/terminal.c
index 7a80636..43a2a31 100644
--- a/src/terminal.c
+++ b/src/terminal.c
@@ -38,8 +38,6 @@
  * in tl_scrollback are no longer used.
  *
  * TODO:
- * - if the job in the terminal does not support the mouse, we can use the
- *   mouse in the Terminal window for copy/paste and scrolling.
  * - When using 'termguicolors' still use the 16 ANSI colors as-is.  Helps for
  * - In the GUI use a terminal emulator for :!cmd.  Make the height the same as
  *   the window and position it higher up when it gets filled, so it looks like
@@ -900,6 +898,105 @@
     return TRUE;
 }
 
+static int enter_mouse_col = -1;
+static int enter_mouse_row = -1;
+
+/*
+ * Handle a mouse click, drag or release.
+ * Return TRUE when a mouse event is sent to the terminal.
+ */
+    static int
+term_mouse_click(VTerm *vterm, int key)
+{
+#if defined(FEAT_CLIPBOARD)
+    /* For modeless selection mouse drag and release events are ignored, unless
+     * they are preceded with a mouse down event */
+    static int	    ignore_drag_release = TRUE;
+    VTermMouseState mouse_state;
+
+    vterm_state_get_mousestate(vterm_obtain_state(vterm), &mouse_state);
+    if (mouse_state.flags == 0)
+    {
+	/* Terminal is not using the mouse, use modeless selection. */
+	switch (key)
+	{
+	case K_LEFTDRAG:
+	case K_LEFTRELEASE:
+	case K_RIGHTDRAG:
+	case K_RIGHTRELEASE:
+		/* Ignore drag and release events when the button-down wasn't
+		 * seen before. */
+		if (ignore_drag_release)
+		{
+		    int save_mouse_col, save_mouse_row;
+
+		    if (enter_mouse_col < 0)
+			break;
+
+		    /* mouse click in the window gave us focus, handle that
+		     * click now */
+		    save_mouse_col = mouse_col;
+		    save_mouse_row = mouse_row;
+		    mouse_col = enter_mouse_col;
+		    mouse_row = enter_mouse_row;
+		    clip_modeless(MOUSE_LEFT, TRUE, FALSE);
+		    mouse_col = save_mouse_col;
+		    mouse_row = save_mouse_row;
+		}
+		/* FALLTHROUGH */
+	case K_LEFTMOUSE:
+	case K_RIGHTMOUSE:
+		if (key == K_LEFTRELEASE || key == K_RIGHTRELEASE)
+		    ignore_drag_release = TRUE;
+		else
+		    ignore_drag_release = FALSE;
+		/* Should we call mouse_has() here? */
+		if (clip_star.available)
+		{
+		    int	    button, is_click, is_drag;
+
+		    button = get_mouse_button(KEY2TERMCAP1(key),
+							 &is_click, &is_drag);
+		    if (mouse_model_popup() && button == MOUSE_LEFT
+					       && (mod_mask & MOD_MASK_SHIFT))
+		    {
+			/* Translate shift-left to right button. */
+			button = MOUSE_RIGHT;
+			mod_mask &= ~MOD_MASK_SHIFT;
+		    }
+		    clip_modeless(button, is_click, is_drag);
+		}
+		break;
+
+	case K_MIDDLEMOUSE:
+		if (clip_star.available)
+		    insert_reg('*', TRUE);
+		break;
+	}
+	enter_mouse_col = -1;
+	return FALSE;
+    }
+#endif
+    enter_mouse_col = -1;
+
+    switch (key)
+    {
+	case K_LEFTMOUSE:
+	case K_LEFTMOUSE_NM:	term_send_mouse(vterm, 1, 1); break;
+	case K_LEFTDRAG:	term_send_mouse(vterm, 1, 1); break;
+	case K_LEFTRELEASE:
+	case K_LEFTRELEASE_NM:	term_send_mouse(vterm, 1, 0); break;
+	case K_MOUSEMOVE:	term_send_mouse(vterm, 0, 0); break;
+	case K_MIDDLEMOUSE:	term_send_mouse(vterm, 2, 1); break;
+	case K_MIDDLEDRAG:	term_send_mouse(vterm, 2, 1); break;
+	case K_MIDDLERELEASE:	term_send_mouse(vterm, 2, 0); break;
+	case K_RIGHTMOUSE:	term_send_mouse(vterm, 3, 1); break;
+	case K_RIGHTDRAG:	term_send_mouse(vterm, 3, 1); break;
+	case K_RIGHTRELEASE:	term_send_mouse(vterm, 3, 0); break;
+    }
+    return TRUE;
+}
+
 /*
  * Convert typed key "c" into bytes to send to the job.
  * Return the number of bytes in "buf".
@@ -995,17 +1092,21 @@
 	case K_MOUSERIGHT:	/* TODO */ return 0;
 
 	case K_LEFTMOUSE:
-	case K_LEFTMOUSE_NM:	other = term_send_mouse(vterm, 1, 1); break;
-	case K_LEFTDRAG:	other = term_send_mouse(vterm, 1, 1); break;
+	case K_LEFTMOUSE_NM:
+	case K_LEFTDRAG:
 	case K_LEFTRELEASE:
-	case K_LEFTRELEASE_NM:	other = term_send_mouse(vterm, 1, 0); break;
-	case K_MOUSEMOVE:	other = term_send_mouse(vterm, 0, 0); break;
-	case K_MIDDLEMOUSE:	other = term_send_mouse(vterm, 2, 1); break;
-	case K_MIDDLEDRAG:	other = term_send_mouse(vterm, 2, 1); break;
-	case K_MIDDLERELEASE:	other = term_send_mouse(vterm, 2, 0); break;
-	case K_RIGHTMOUSE:	other = term_send_mouse(vterm, 3, 1); break;
-	case K_RIGHTDRAG:	other = term_send_mouse(vterm, 3, 1); break;
-	case K_RIGHTRELEASE:	other = term_send_mouse(vterm, 3, 0); break;
+	case K_LEFTRELEASE_NM:
+	case K_MOUSEMOVE:
+	case K_MIDDLEMOUSE:
+	case K_MIDDLEDRAG:
+	case K_MIDDLERELEASE:
+	case K_RIGHTMOUSE:
+	case K_RIGHTDRAG:
+	case K_RIGHTRELEASE:	if (!term_mouse_click(vterm, c))
+				    return 0;
+				other = TRUE;
+				break;
+
 	case K_X1MOUSE:		/* TODO */ return 0;
 	case K_X1DRAG:		/* TODO */ return 0;
 	case K_X1RELEASE:	/* TODO */ return 0;
@@ -1473,6 +1574,8 @@
     return c;
 }
 
+static int	mouse_was_outside = FALSE;
+
 /*
  * Send keys to terminal.
  * Return FAIL when the key needs to be handled in Normal mode.
@@ -1483,7 +1586,6 @@
 {
     char	msg[KEY_BUF_LEN];
     size_t	len;
-    static int	mouse_was_outside = FALSE;
     int		dragging_outside = FALSE;
 
     /* Catch keys that need to be handled as in Normal mode. */
@@ -1732,6 +1834,29 @@
 }
 
 /*
+ * Called when entering a window with the mouse.  If this is a terminal window
+ * we may want to change state.
+ */
+    void
+term_win_entered()
+{
+    term_T *term = curbuf->b_term;
+
+    if (term != NULL)
+    {
+	if (term_use_loop())
+	{
+	    reset_VIsual_and_resel();
+	    if (State & INSERT)
+		stop_insert_mode = TRUE;
+	}
+	mouse_was_outside = FALSE;
+	enter_mouse_col = mouse_col;
+	enter_mouse_row = mouse_row;
+    }
+}
+
+/*
  * Returns TRUE if the current window contains a terminal and we are sending
  * keys to the job.
  */