diff --git a/src/nvim/terminal.c b/src/nvim/terminal.c
index a564738243..fbfe8c04a6 100644
--- a/src/nvim/terminal.c
+++ b/src/nvim/terminal.c
@@ -1506,13 +1506,14 @@ static bool send_mouse_event(Terminal *term, int c)
     return mouse_win == curwin;
   }
 
-  // ignore left release action if it was not processed above
-  // to prevent leaving Terminal mode after entering to it using a mouse
-  if (c == K_LEFTRELEASE && mouse_win->w_buffer->terminal == term) {
+end:
+  // Ignore left release action if it was not forwarded to prevent
+  // leaving Terminal mode after entering to it using a mouse.
+  if ((c == K_LEFTRELEASE && mouse_win != NULL && mouse_win->w_buffer->terminal == term)
+      || c == K_MOUSEMOVE) {
     return false;
   }
 
-end:
   ins_char_typebuf(vgetc_char, vgetc_mod_mask);
   return true;
 }
diff --git a/test/functional/terminal/mouse_spec.lua b/test/functional/terminal/mouse_spec.lua
index 6dccd14994..92d9b03b45 100644
--- a/test/functional/terminal/mouse_spec.lua
+++ b/test/functional/terminal/mouse_spec.lua
@@ -67,8 +67,23 @@ describe(':terminal mouse', function()
       eq('nt', eval('mode(1)'))
     end)
 
-    it('does not leave terminal mode on left-release', function()
-      feed('<LeftRelease>')
+    it('will not exit focus on left-release', function()
+      eq('t', eval('mode(1)'))
+      feed('<LeftRelease><0,0>')
+      eq('t', eval('mode(1)'))
+      command('setlocal number')
+      eq('t', eval('mode(1)'))
+      feed('<LeftRelease><0,0>')
+      eq('t', eval('mode(1)'))
+    end)
+
+    it('will not exit focus on mouse movement', function()
+      eq('t', eval('mode(1)'))
+      feed('<MouseMove><0,0>')
+      eq('t', eval('mode(1)'))
+      command('setlocal number')
+      eq('t', eval('mode(1)'))
+      feed('<MouseMove><0,0>')
       eq('t', eval('mode(1)'))
     end)