2 files changed, 20 insertions, 3 deletions

diff --git a/lisp/term.el b/lisp/term.el
index 93da33ea5b0..91eab771cf0 100644
--- a/lisp/term.el
+++ b/lisp/term.el
@@ -2891,9 +2891,11 @@ See `term-prompt-regexp'."
                 ;; If the last char was written in last column,
                 ;; back up one column, but remember we did so.
                 ;; Thus we emulate xterm/vt100-style line-wrapping.
-                (cond ((eq (term-current-column) term-width)
-                       (term-move-columns -1)
-                       (setq term-do-line-wrapping t)))
+                (when (eq (term-current-column) term-width)
+                  (term-move-columns -1)
+                  ;; We check after ctrl sequence handling if point
+                  ;; was moved (and leave line-wrapping state if so).
+                  (setq term-do-line-wrapping (point)))
                 (setq term-current-column nil)
                 (setq i funny))
               (pcase-exhaustive (and (<= ctl-end str-length) (aref str i))
@@ -2993,6 +2995,9 @@ See `term-prompt-regexp'."
                      (substring str i ctl-end)))))
                 ;; Ignore NUL, Shift Out, Shift In.
                 ((or ?\0 #xE #xF 'nil) nil))
+              ;; Leave line-wrapping state if point was moved.
+              (unless (eq term-do-line-wrapping (point))
+                (setq term-do-line-wrapping nil))
               (if (term-handling-pager)
                   (progn
                     ;; Finish stuff to get ready to handle PAGER.
diff --git a/test/lisp/term-tests.el b/test/lisp/term-tests.el
index 234dfa1f0d5..8aaa61a210b 100644
--- a/test/lisp/term-tests.el
+++ b/test/lisp/term-tests.el
@@ -124,6 +124,18 @@ line6\r
                     40 12 (list "\eAnSiTc /f" "oo/\n") 'default-directory)
                    "/foo/"))))
 
+(ert-deftest term-line-wrapping-then-motion ()
+  "Make sure we reset the line-wrapping state after moving cursor.
+A real-life example is the default zsh prompt which writes spaces
+to the end of line (triggering line-wrapping state), and then
+sends a carriage return followed by another space to overwrite
+the first character of the line."
+  (let* ((width 10)
+         (strs (list "x" (make-string (1- width) ?_)
+                     "\r_")))
+    (should (equal (term-test-screen-from-input width 12 strs)
+                   (make-string width ?_)))))
+
 (provide 'term-tests)
 
 ;;; term-tests.el ends here