diff --git a/terminal/terminal.c b/terminal/terminal.c
index 90150044..08df6e59 100644
--- a/terminal/terminal.c
+++ b/terminal/terminal.c
@@ -1796,8 +1796,13 @@ void term_reconfig(Terminal *term, Conf *conf)
     conf_free(term->conf);
     term->conf = conf_copy(conf);
 
-    if (reset_wrap)
+    if (reset_wrap) {
         term->alt_wrap = term->wrap = conf_get_bool(term->conf, CONF_wrap_mode);
+        if (!term->wrap)
+            term->wrapnext = false;
+        if (!term->alt_wrap)
+            term->alt_wnext = false;
+    }
     if (reset_decom)
         term->alt_om = term->dec_om = conf_get_bool(term->conf, CONF_dec_om);
     if (reset_bce) {
@@ -3093,6 +3098,8 @@ static void toggle_mode(Terminal *term, int mode, int query, bool state)
             break;
           case 7:                      /* DECAWM: auto wrap */
             term->wrap = state;
+            if (!term->wrap)
+                term->wrapnext = false;
             break;
           case 8:                      /* DECARM: auto key repeat */
             term->repeat_off = !state;
@@ -3425,15 +3432,23 @@ static void term_display_graphic_char(Terminal *term, unsigned long c)
     term->curs.x++;
     if (term->curs.x >= linecols) {
         term->curs.x = linecols - 1;
-        term->wrapnext = true;
-        if (term->wrap && term->vt52_mode) {
-            cline->lattr |= LATTR_WRAPPED;
-            if (term->curs.y == term->marg_b)
-                scroll(term, term->marg_t, term->marg_b, 1, true);
-            else if (term->curs.y < term->rows - 1)
-                term->curs.y++;
-            term->curs.x = 0;
-            term->wrapnext = false;
+
+        if (term->wrap) {
+            if (!term->vt52_mode) {
+                /* Set the wrapnext flag, so that the next character
+                 * wraps, but this one doesn't. */
+                term->wrapnext = true;
+            } else {
+                /* VT52 mode expects simpler handling, and we just
+                 * wrap straight away. */
+                cline->lattr |= LATTR_WRAPPED;
+                if (term->curs.y == term->marg_b)
+                    scroll(term, term->marg_t, term->marg_b, 1, true);
+                else if (term->curs.y < term->rows - 1)
+                    term->curs.y++;
+                term->curs.x = 0;
+                term->wrapnext = false;
+            }
         }
     }
     seen_disp_event(term);
@@ -5655,6 +5670,7 @@ static void term_out(Terminal *term, bool called_from_term_data)
                   case 'w':            /* Autowrap off */
                     /* compatibility(ATARI) */
                     term->wrap = false;
+                    term->wrapnext = false;
                     break;
 
                   case 'R':
diff --git a/test/test_terminal.c b/test/test_terminal.c
index 9fdca6cc..5ebc1204 100644
--- a/test/test_terminal.c
+++ b/test/test_terminal.c
@@ -384,7 +384,8 @@ static void test_wrap(Mock *mk)
 
 static void test_nonwrap(Mock *mk)
 {
-    /* Test behaviour when printing characters hit end of line without wrap */
+    /* Test behaviour when printing characters hit end of line without wrap.
+     * The wrapnext flag is never set in this mode. */
     mk->ucsdata->line_codepage = CP_UTF8;
 
     /* Print 'abc' without enough space for the c */
@@ -398,27 +399,22 @@ static void test_nonwrap(Mock *mk)
     IEQUAL(mk->term->curs.y, 0);
     IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, CSET_ASCII | 'a');
-    /* The 'b' prints, leaving the cursor where it is with wrapnext set */
+    /* The 'b' prints, leaving the cursor where it is */
     term_datapl(mk->term, PTRLEN_LITERAL("b"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_lineattr(mk->term, 0), 0);
     IEQUAL(get_termchar(mk->term, 79, 0).chr, CSET_ASCII | 'b');
-    /* The 'c' overwrites the b, leaving wrapnext still set */
+    /* The 'c' overwrites the b */
     term_datapl(mk->term, PTRLEN_LITERAL("c"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_lineattr(mk->term, 0), 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, CSET_ASCII | 'a');
     IEQUAL(get_termchar(mk->term, 79, 0).chr, CSET_ASCII | 'c');
-    /* So backspacing clears wrapnext, leaving us on the c */
-    term_datapl(mk->term, PTRLEN_LITERAL("\b"));
-    IEQUAL(mk->term->curs.x, 79);
-    IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 0);
-    /* And backspacing again returns the cursor to the a */
+    /* Since wrapnext was never set, backspacing returns us to the a */
     term_datapl(mk->term, PTRLEN_LITERAL("\b"));
     IEQUAL(mk->term->curs.x, 78);
     IEQUAL(mk->term->curs.y, 0);
@@ -428,18 +424,18 @@ static void test_nonwrap(Mock *mk)
     mk->term->curs.x = 78;
     mk->term->curs.y = 0;
     mk->term->wrap = false;
-    /* The DW character goes directly to the wrapnext state */
+    /* The DW character occupies the rightmost two columns */
     term_datapl(mk->term, PTRLEN_LITERAL("\xEA\xB0\x80"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, 0xAC00);
     IEQUAL(get_termchar(mk->term, 79, 0).chr, UCSWIDE);
     /* The 'c' must overprint the RHS of the DW char, clearing the LHS */
     term_datapl(mk->term, PTRLEN_LITERAL("c"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_lineattr(mk->term, 0), 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, CSET_ASCII | ' ');
     IEQUAL(get_termchar(mk->term, 79, 0).chr, CSET_ASCII | 'c');
@@ -459,7 +455,7 @@ static void test_nonwrap(Mock *mk)
     term_datapl(mk->term, PTRLEN_LITERAL("\xEA\xB0\x80"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_lineattr(mk->term, 0), 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, CSET_ASCII | 'a');
     IEQUAL(get_termchar(mk->term, 79, 0).chr, 0xFFFD);
@@ -469,18 +465,18 @@ static void test_nonwrap(Mock *mk)
     mk->term->curs.x = 78;
     mk->term->curs.y = 0;
     mk->term->wrap = false;
-    /* First DW character goes directly to the wrapnext state */
+    /* First DW character occupies the rightmost columns */
     term_datapl(mk->term, PTRLEN_LITERAL("\xEA\xB0\x80"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, 0xAC00);
     IEQUAL(get_termchar(mk->term, 79, 0).chr, UCSWIDE);
     /* Second DW char becomes U+FFFD, overwriting RHS of the first one */
     term_datapl(mk->term, PTRLEN_LITERAL("\xEA\xB0\x81"));
     IEQUAL(mk->term->curs.x, 79);
     IEQUAL(mk->term->curs.y, 0);
-    IEQUAL(mk->term->wrapnext, 1);
+    IEQUAL(mk->term->wrapnext, 0);
     IEQUAL(get_lineattr(mk->term, 0), 0);
     IEQUAL(get_termchar(mk->term, 78, 0).chr, CSET_ASCII | ' ');
     IEQUAL(get_termchar(mk->term, 79, 0).chr, 0xFFFD);