diff --git a/src/nvim/terminal.c b/src/nvim/terminal.c
index 147ba65459..61329fc443 100644
--- a/src/nvim/terminal.c
+++ b/src/nvim/terminal.c
@@ -795,6 +795,11 @@ static void terminal_check_cursor(void)
   curwin->w_wcol = term->cursor.col + win_col_off(curwin);
   curwin->w_cursor.lnum = MIN(curbuf->b_ml.ml_line_count,
                               row_to_linenr(term, term->cursor.row));
+  const linenr_T topline = MAX(curbuf->b_ml.ml_line_count - curwin->w_view_height + 1, 1);
+  // Don't update topline if unchanged to avoid unnecessary redraws.
+  if (topline != curwin->w_topline) {
+    set_topline(curwin, topline);
+  }
   // Nudge cursor when returning to normal-mode.
   int off = is_focused(term) ? 0 : (curwin->w_p_rl ? 1 : -1);
   coladvance(curwin, MAX(0, term->cursor.col + off));
@@ -2247,11 +2252,16 @@ static void adjust_topline(Terminal *term, buf_T *buf, int added)
 {
   FOR_ALL_TAB_WINDOWS(tp, wp) {
     if (wp->w_buffer == buf) {
+      if (wp == curwin && is_focused(term)) {
+        // Move window cursor to terminal cursor's position and "follow" output.
+        terminal_check_cursor();
+        continue;
+      }
+
       linenr_T ml_end = buf->b_ml.ml_line_count;
       bool following = ml_end == wp->w_cursor.lnum + added;  // cursor at end?
-      bool focused = wp == curwin && is_focused(term);
 
-      if (following || focused) {
+      if (following) {
         // "Follow" the terminal output
         wp->w_cursor.lnum = ml_end;
         set_topline(wp, MAX(wp->w_cursor.lnum - wp->w_view_height + 1, 1));
@@ -2259,11 +2269,7 @@ static void adjust_topline(Terminal *term, buf_T *buf, int added)
         // Ensure valid cursor for each window displaying this terminal.
         wp->w_cursor.lnum = MIN(wp->w_cursor.lnum, ml_end);
       }
-      if (focused) {
-        terminal_check_cursor();
-      } else {
-        mb_check_adjust_col(wp);
-      }
+      mb_check_adjust_col(wp);
     }
   }
 }
diff --git a/test/functional/terminal/window_spec.lua b/test/functional/terminal/window_spec.lua
index b64686896d..dfe7cbd9d8 100644
--- a/test/functional/terminal/window_spec.lua
+++ b/test/functional/terminal/window_spec.lua
@@ -3,8 +3,10 @@ local n = require('test.functional.testnvim')()
 
 local tt = require('test.functional.testterm')
 local feed_data = tt.feed_data
+local feed_csi = tt.feed_csi
 local feed, clear = n.feed, n.clear
 local poke_eventloop = n.poke_eventloop
+local exec_lua = n.exec_lua
 local command = n.command
 local retry = t.retry
 local eq = t.eq
@@ -332,6 +334,86 @@ describe(':terminal window', function()
     command('echo ""')
     screen:expect_unchanged()
   end)
+
+  it('has correct topline if scrolled by events', function()
+    skip(is_os('win'), '#31587')
+    local lines = {}
+    for i = 1, 10 do
+      table.insert(lines, 'cool line ' .. i)
+    end
+    feed_data(lines)
+    feed_csi('1;1H') -- Cursor to 1,1 (after any scrollback)
+
+    -- :sleep (with leeway) until the refresh_terminal uv timer event triggers before we move the
+    -- cursor. Check that the next terminal_check tails topline correctly.
+    command('set ruler | sleep 20m | call nvim_win_set_cursor(0, [1, 0])')
+    screen:expect([[
+      ^cool line 5                                       |
+      cool line 6                                       |
+      cool line 7                                       |
+      cool line 8                                       |
+      cool line 9                                       |
+      cool line 10                                      |
+      {5:-- TERMINAL --}                  6,1           Bot |
+    ]])
+    command('call nvim_win_set_cursor(0, [1, 0])')
+    screen:expect_unchanged()
+
+    feed_csi('2;5H') -- Cursor to 2,5 (after any scrollback)
+    screen:expect([[
+      cool line 5                                       |
+      cool^ line 6                                       |
+      cool line 7                                       |
+      cool line 8                                       |
+      cool line 9                                       |
+      cool line 10                                      |
+      {5:-- TERMINAL --}                  7,5           Bot |
+    ]])
+    -- Check topline correct after leaving terminal mode.
+    -- The new cursor position is one column left of the terminal's actual cursor position.
+    command('stopinsert | call nvim_win_set_cursor(0, [1, 0])')
+    screen:expect([[
+      cool line 5                                       |
+      coo^l line 6                                       |
+      cool line 7                                       |
+      cool line 8                                       |
+      cool line 9                                       |
+      cool line 10                                      |
+                                      7,4           Bot |
+    ]])
+  end)
+
+  it('not unnecessarily redrawn by events', function()
+    eq('t', eval('mode()'))
+    exec_lua(function()
+      _G.redraws = {}
+      local ns = vim.api.nvim_create_namespace('test')
+      vim.api.nvim_set_decoration_provider(ns, {
+        on_start = function()
+          table.insert(_G.redraws, 'start')
+        end,
+        on_win = function(_, win)
+          table.insert(_G.redraws, 'win ' .. win)
+        end,
+        on_end = function()
+          table.insert(_G.redraws, 'end')
+        end,
+      })
+      -- Setting a decoration provider typically causes an initial redraw.
+      vim.cmd.redraw()
+      _G.redraws = {}
+    end)
+
+    -- The event we sent above to set up the test shouldn't have caused a redraw.
+    -- For good measure, also poke the event loop.
+    poke_eventloop()
+    eq({}, exec_lua('return _G.redraws'))
+
+    -- Redraws if we do something useful, of course.
+    feed_data('foo')
+    screen:expect { any = 'foo' }
+    eq({ 'start', 'win 1000', 'end' }, exec_lua('return _G.redraws'))
+  end)
 end)
 
 describe(':terminal with multigrid', function()