diff --git a/src/dispnew.c b/src/dispnew.c
index 0c31319917..f58e1d28e4 100644
--- a/src/dispnew.c
+++ b/src/dispnew.c
@@ -3848,6 +3848,10 @@ gui_update_window_end (struct window *w, bool cursor_on_p,
 				w->output_cursor.hpos, w->output_cursor.vpos,
 				w->output_cursor.x, w->output_cursor.y);
 
+      if (cursor_in_mouse_face_p (w)
+	  && cursor_on_p)
+	mouse_face_overwritten_p = 1;
+
       if (draw_window_fringes (w, true))
 	{
 	  if (WINDOW_RIGHT_DIVIDER_WIDTH (w))
diff --git a/src/xdisp.c b/src/xdisp.c
index 2e72f6b591..f542b3f526 100644
--- a/src/xdisp.c
+++ b/src/xdisp.c
@@ -1179,7 +1179,9 @@ #define face_after_it_pos(IT)  face_before_or_after_it_pos (IT, false)
 static Lisp_Object get_it_property (struct it *, Lisp_Object);
 static Lisp_Object calc_line_height_property (struct it *, Lisp_Object,
 					      struct font *, int, bool);
-
+static void get_cursor_offset_for_mouse_face (struct window *w,
+					      struct glyph_row *row,
+					      int *offset)
 #endif /* HAVE_WINDOW_SYSTEM */
 
 static void produce_special_glyphs (struct it *, enum display_element_type);
@@ -31741,6 +31743,10 @@ erase_phys_cursor (struct window *w)
   Mouse_HLInfo *hlinfo = MOUSE_HL_INFO (f);
   int hpos = w->phys_cursor.hpos;
   int vpos = w->phys_cursor.vpos;
+#ifdef HAVE_WINDOW_SYSTEM
+  int mouse_delta = 0;
+  int phys_x = w->phys_cursor.x;
+#endif
   bool mouse_face_here_p = false;
   struct glyph_matrix *active_glyphs = w->current_matrix;
   struct glyph_row *cursor_row;
@@ -31810,6 +31816,14 @@ erase_phys_cursor (struct window *w)
       && cursor_row->used[TEXT_AREA] > hpos && hpos >= 0)
     mouse_face_here_p = true;
 
+#ifdef HAVE_WINDOW_SYSTEM
+  if (mouse_face_here_p)
+    {
+      get_cursor_offset_for_mouse_face (w, cursor_row, &mouse_delta);
+      w->phys_cursor.x += mouse_delta;
+    }
+#endif
+
   /* Maybe clear the display under the cursor.  */
   if (w->phys_cursor_type == HOLLOW_BOX_CURSOR)
     {
@@ -31845,6 +31859,9 @@ erase_phys_cursor (struct window *w)
   draw_phys_cursor_glyph (w, cursor_row, hl);
 
  mark_cursor_off:
+#ifdef HAVE_WINDOW_SYSTEM
+  w->phys_cursor.x = phys_x;
+#endif
   w->phys_cursor_on_p = false;
   w->phys_cursor_type = NO_CURSOR;
 }
@@ -32081,6 +32098,9 @@ show_mouse_face (Mouse_HLInfo *hlinfo, enum draw_glyphs_face draw)
       && hlinfo->mouse_face_end_row < w->current_matrix->nrows)
     {
       bool phys_cursor_on_p = w->phys_cursor_on_p;
+#ifdef HAVE_WINDOW_SYSTEM
+      int mouse_off = 0;
+#endif
       struct glyph_row *row, *first, *last;
 
       first = MATRIX_ROW (w->current_matrix, hlinfo->mouse_face_beg_row);
@@ -32154,6 +32174,12 @@ show_mouse_face (Mouse_HLInfo *hlinfo, enum draw_glyphs_face draw)
 	      row->mouse_face_p
 		= draw == DRAW_MOUSE_FACE || draw == DRAW_IMAGE_RAISED;
 	    }
+#ifdef HAVE_WINDOW_SYSTEM
+	  if (MATRIX_ROW_VPOS (row, w->current_matrix)
+	      == w->phys_cursor.vpos && !w->pseudo_window_p
+	      && draw == DRAW_MOUSE_FACE)
+	    get_cursor_offset_for_mouse_face (w, row, &mouse_off);
+#endif
 	}
 
       /* When we've written over the cursor, arrange for it to
@@ -32163,6 +32189,7 @@ show_mouse_face (Mouse_HLInfo *hlinfo, enum draw_glyphs_face draw)
 	{
 #ifdef HAVE_WINDOW_SYSTEM
 	  int hpos = w->phys_cursor.hpos;
+	  int old_phys_cursor_x = w->phys_cursor.x;
 
 	  /* When the window is hscrolled, cursor hpos can legitimately be
 	     out of bounds, but we draw the cursor at the corresponding
@@ -32174,7 +32201,9 @@ show_mouse_face (Mouse_HLInfo *hlinfo, enum draw_glyphs_face draw)
 
 	  block_input ();
 	  display_and_set_cursor (w, true, hpos, w->phys_cursor.vpos,
-				  w->phys_cursor.x, w->phys_cursor.y);
+				  w->phys_cursor.x + mouse_off,
+				  w->phys_cursor.y);
+	  w->phys_cursor.x = old_phys_cursor_x;
 	  unblock_input ();
 #endif	/* HAVE_WINDOW_SYSTEM */
 	}
@@ -35926,4 +35955,89 @@ cancel_hourglass (void)
     }
 }
 
+#ifdef HAVE_WINDOW_SYSTEM
+/* Get the offset to apply before drawing phys_cursor, and return it
+   in OFFSET, if ROW has something currently under mouse face. */
+static void
+get_cursor_offset_for_mouse_face (struct window *w, struct glyph_row *row,
+				  int *offset)
+{
+  if (row->mode_line_p)
+    return;
+  block_input ();
+
+  struct frame *f = WINDOW_XFRAME (w);
+  Mouse_HLInfo *hlinfo = MOUSE_HL_INFO (f);
+  struct glyph *start, *end;
+  struct face *mouse_face = FACE_FROM_ID (f, hlinfo->mouse_face_face_id);
+  int hpos = w->phys_cursor.hpos;
+  end = &row->glyphs[TEXT_AREA][hpos];
+
+  if (!row->reversed_p)
+    {
+      if (MATRIX_ROW_VPOS (row, w->current_matrix) ==
+ 	  hlinfo->mouse_face_beg_row)
+	start = &row->glyphs[TEXT_AREA][hlinfo->mouse_face_beg_col];
+      else
+	start = row->glyphs[TEXT_AREA];
+    }
+  else
+    {
+      if (MATRIX_ROW_VPOS (row, w->current_matrix) ==
+	  hlinfo->mouse_face_end_row)
+	start = &row->glyphs[TEXT_AREA][hlinfo->mouse_face_end_col];
+      else
+	start = &row->glyphs[TEXT_AREA][row->used[TEXT_AREA] - 1];
+    }
+
+  /* Calculate an offset to correct phys_cursor x if we are
+     drawing the cursor in the mouse face. */
+
+  for (; start != end; row->reversed_p ?
+	 --start : ++start)
+    {
+      struct glyph *g = start;
+      struct face *mouse = mouse_face;
+      struct face *regular_face = FACE_FROM_ID (f, g->face_id);
+
+      bool do_left_box_p = g->left_box_line_p;
+      bool do_right_box_p = g->right_box_line_p;
+
+      if (row->reversed_p && g->type == IMAGE_GLYPH)
+	{
+	  struct image *img = IMAGE_FROM_ID (WINDOW_XFRAME (w),
+					     g->u.img_id);
+	  do_left_box_p = g->left_box_line_p &&
+	    g->slice.img.x + g->slice.img.width == img->width;
+	  do_right_box_p = g->right_box_line_p &&
+	    g->slice.img.x == 0;
+	}
+      else if (g->type == IMAGE_GLYPH)
+	{
+	  struct image *img = IMAGE_FROM_ID (WINDOW_XFRAME (w),
+					     g->u.img_id);
+	  do_left_box_p = g->left_box_line_p &&
+	    g->slice.img.x + g->slice.img.width == img->width;
+	  do_right_box_p = g->right_box_line_p &&
+	    g->slice.img.x == 0;
+	}
+
+      /* If the glyph has a left box line, subtract it the
+	 offset. */
+      if (do_left_box_p)
+        *offset -= max (0, regular_face->box_vertical_line_width);
+      /* Likewise with the right box line, as there may be a
+	 box there as well. */
+      if (do_right_box_p)
+        *offset -= max (0, regular_face->box_vertical_line_width);
+      /* Now we add the line widths from the new face. */
+      if (g->left_box_line_p)
+	*offset += max (0, mouse->box_vertical_line_width);
+      if (g->right_box_line_p)
+        *offset += max (0, mouse->box_vertical_line_width);
+    }
+
+  unblock_input ();
+}
+#endif
 #endif /* HAVE_WINDOW_SYSTEM */