diff --git a/lisp/x-dnd.el b/lisp/x-dnd.el
index 9c1c98a1bf5..92899e7a0c6 100644
--- a/lisp/x-dnd.el
+++ b/lisp/x-dnd.el
@@ -695,13 +695,13 @@ FORMAT is 32 (not used).  MESSAGE is the data part of an XClientMessageEvent."
 		(list-to-send
 		 (list (string-to-number
 			(frame-parameter frame 'outer-window-id))
-		       (+ 2 accept) ;; 1 = accept, 0 = reject.  2 =
-                                    ;; "want position updates".
-                       (if dnd-indicate-insertion-point 0
-		         (x-dnd-get-drop-x-y frame window))
-                       (if dnd-indicate-insertion-point 0
-		         (x-dnd-get-drop-width-height
-			  frame window (eq accept 1)))
+                       ;; 1 = accept, 0 = reject.  2 = "want position
+                       ;; updates even for movement inside the given
+                       ;; widget bounds".
+		       (+ (if dnd-indicate-insertion-point 2 0) accept)
+		       (x-dnd-get-drop-x-y frame window)
+		       (x-dnd-get-drop-width-height
+			frame window (eq accept 1))
                        ;; The no-toolkit Emacs build can actually
                        ;; receive drops from programs that speak
                        ;; versions of XDND earlier than 3 (such as
diff --git a/src/xterm.c b/src/xterm.c
index 4a47fdfd450..8373222cfc3 100644
--- a/src/xterm.c
+++ b/src/xterm.c
@@ -16468,10 +16468,15 @@ handle_one_xevent (struct x_display_info *dpyinfo,
 	    if (x_dnd_last_protocol_version != -1
 		&& x_dnd_in_progress
 		&& target == x_dnd_last_seen_window
-		&& event->xclient.data.l[1] & 2)
+		/* The XDND documentation is not very clearly worded.
+		   But this should be the correct behavior, since
+		   "kDNDStatusSendHereFlag" in the reference
+		   implementation is 2, and means the mouse rect
+		   should be ignored.  */
+		&& !(event->xclient.data.l[1] & 2))
 	      {
 		r1 = event->xclient.data.l[2];
-		r2 = event->xclient.data.l[2];
+		r2 = event->xclient.data.l[3];
 
 		x_dnd_mouse_rect_target = target;
 		x_dnd_mouse_rect.x = (r1 & 0xffff0000) >> 16;