diff --git a/terminatorlib/config.py b/terminatorlib/config.py
index ae156329..0d239024 100644
--- a/terminatorlib/config.py
+++ b/terminatorlib/config.py
@@ -103,6 +103,7 @@ DEFAULTS = {
             'custom_url_handler'    : '',
             'disable_real_transparency' : False,
             'inactive_color_offset': 0.8,
+            'inactive_bg_color_offset': 1.0,
             'enabled_plugins'       : ['LaunchpadBugURLHandler',
                                        'LaunchpadCodeURLHandler',
                                        'APTURLHandler'],
diff --git a/terminatorlib/preferences.glade b/terminatorlib/preferences.glade
index b8ca1749..8f9a33e2 100644
--- a/terminatorlib/preferences.glade
+++ b/terminatorlib/preferences.glade
@@ -394,6 +394,11 @@
     <property name="step-increment">0.10</property>
     <property name="page-increment">0.20</property>
   </object>
+  <object class="GtkAdjustment" id="adjustment8">
+    <property name="upper">1</property>
+    <property name="step-increment">0.10</property>
+    <property name="page-increment">0.20</property>
+  </object>
   <object class="GtkAdjustment" id="adjustment_cellheight">
     <property name="lower">1</property>
     <property name="upper">2</property>
@@ -941,7 +946,7 @@
                             <property name="spacing">36</property>
                             <property name="homogeneous">True</property>
                             <child>
-                              <!-- n-columns=3 n-rows=6 -->
+                              <!-- n-columns=3 n-rows=7 -->
                               <object class="GtkGrid" id="grid3">
                                 <property name="visible">True</property>
                                 <property name="can-focus">False</property>
@@ -960,7 +965,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">0</property>
-                                    <property name="top-attach">3</property>
+                                    <property name="top-attach">4</property>
                                     <property name="width">3</property>
                                   </packing>
                                 </child>
@@ -1014,7 +1019,7 @@
                                     <property name="can-focus">True</property>
                                     <property name="halign">baseline</property>
                                     <property name="hexpand">True</property>
-                                    <property name="adjustment">adjustment7</property>
+                                    <property name="adjustment">adjustment8</property>
                                     <property name="round-digits">2</property>
                                     <property name="digits">2</property>
                                     <property name="draw-value">False</property>
@@ -1084,7 +1089,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">0</property>
-                                    <property name="top-attach">5</property>
+                                    <property name="top-attach">6</property>
                                   </packing>
                                 </child>
                                 <child>
@@ -1100,7 +1105,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">1</property>
-                                    <property name="top-attach">5</property>
+                                    <property name="top-attach">6</property>
                                   </packing>
                                 </child>
                                 <child>
@@ -1118,7 +1123,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">2</property>
-                                    <property name="top-attach">5</property>
+                                    <property name="top-attach">6</property>
                                   </packing>
                                 </child>
                                 <child>
@@ -1135,7 +1140,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">2</property>
-                                    <property name="top-attach">4</property>
+                                    <property name="top-attach">5</property>
                                   </packing>
                                 </child>
                                 <child>
@@ -1151,7 +1156,7 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">1</property>
-                                    <property name="top-attach">4</property>
+                                    <property name="top-attach">5</property>
                                   </packing>
                                 </child>
                                 <child>
@@ -1163,7 +1168,52 @@
                                   </object>
                                   <packing>
                                     <property name="left-attach">0</property>
-                                    <property name="top-attach">4</property>
+                                    <property name="top-attach">5</property>
+                                  </packing>
+                                </child>
+                                <child>
+                                  <object class="GtkLabel" id="label35">
+                                    <property name="visible">True</property>
+                                    <property name="can-focus">False</property>
+                                    <property name="label" translatable="yes">Unfocused terminal background color:</property>
+                                    <property name="xalign">0</property>
+                                  </object>
+                                  <packing>
+                                    <property name="left-attach">0</property>
+                                    <property name="top-attach">3</property>
+                                  </packing>
+                                </child>
+                                <child>
+                                  <object class="GtkLabel" id="inactive_bg_color_offset_value_label">
+                                    <property name="visible">True</property>
+                                    <property name="can-focus">False</property>
+                                    <property name="label" translatable="yes">100%</property>
+                                    <property name="justify">right</property>
+                                    <property name="width-chars">5</property>
+                                    <property name="max-width-chars">5</property>
+                                    <property name="xalign">1</property>
+                                  </object>
+                                  <packing>
+                                    <property name="left-attach">1</property>
+                                    <property name="top-attach">3</property>
+                                  </packing>
+                                </child>
+                                <child>
+                                  <object class="GtkScale" id="inactive_bg_color_offset">
+                                    <property name="width-request">100</property>
+                                    <property name="visible">True</property>
+                                    <property name="can-focus">True</property>
+                                    <property name="hexpand">True</property>
+                                    <property name="adjustment">adjustment7</property>
+                                    <property name="round-digits">2</property>
+                                    <property name="digits">2</property>
+                                    <property name="draw-value">False</property>
+                                    <property name="value-pos">bottom</property>
+                                    <signal name="value-changed" handler="on_inactive_bg_color_offset_value_changed" swapped="no"/>
+                                  </object>
+                                  <packing>
+                                    <property name="left-attach">2</property>
+                                    <property name="top-attach">3</property>
                                   </packing>
                                 </child>
                               </object>
diff --git a/terminatorlib/prefseditor.py b/terminatorlib/prefseditor.py
index 2fc668d3..f805c8c6 100755
--- a/terminatorlib/prefseditor.py
+++ b/terminatorlib/prefseditor.py
@@ -674,6 +674,10 @@ class PrefsEditor:
         widget.set_value(float(self.config['inactive_color_offset']))
         widget = guiget('inactive_color_offset_value_label')
         widget.set_text('%d%%' % (int(float(self.config['inactive_color_offset'])*100)))
+        widget = guiget('inactive_bg_color_offset')
+        widget.set_value(float(self.config['inactive_bg_color_offset']))
+        widget = guiget('inactive_bg_color_offset_value_label')
+        widget.set_text('%d%%' % (int(float(self.config['inactive_bg_color_offset'])*100)))
         # Open links with a single click (instead of a Ctrl-left click)
         widget = guiget('link_single_click')
         widget.set_active(self.config['link_single_click'])
@@ -1360,6 +1364,17 @@ class PrefsEditor:
         label_widget = guiget('inactive_color_offset_value_label')
         label_widget.set_text('%d%%' % (int(value * 100)))
 
+    def on_inactive_bg_color_offset_value_changed(self, widget):
+        """Inactive background color offset setting changed"""
+        value = widget.get_value()  # This one is rounded according to the UI.
+        if value > 1.0:
+          value = 1.0
+        self.config['inactive_bg_color_offset'] = value
+        self.config.save()
+        guiget = self.builder.get_object
+        label_widget = guiget('inactive_bg_color_offset_value_label')
+        label_widget.set_text('%d%%' % (int(value * 100)))
+
     def on_handlesize_value_changed(self, widget):
         """Handle size changed"""
         value = widget.get_value()  # This one is rounded according to the UI.
diff --git a/terminatorlib/terminal.py b/terminatorlib/terminal.py
index 178d71a2..5add381b 100644
--- a/terminatorlib/terminal.py
+++ b/terminatorlib/terminal.py
@@ -112,6 +112,7 @@ class Terminal(Gtk.VBox):
     fgcolor_active = None
     fgcolor_inactive = None
     bgcolor = None
+    bgcolor_inactive = None
     palette_active = None
     palette_inactive = None
 
@@ -754,6 +755,22 @@ class Terminal(Gtk.VBox):
         dbg(("fgcolor_inactive set to: RGB(%s,%s,%s)", getattr(self.fgcolor_inactive, "red"),
                                                       getattr(self.fgcolor_inactive, "green"),
                                                       getattr(self.fgcolor_inactive, "blue")))
+
+        bg_factor = self.config['inactive_bg_color_offset']
+        if bg_factor > 1.0:
+            bg_factor = 1.0
+        self.bgcolor_inactive = self.bgcolor.copy()
+        dbg(("bgcolor_inactive set to: RGB(%s,%s,%s)", getattr(self.bgcolor_inactive, "red"),
+                                                      getattr(self.bgcolor_inactive, "green"),
+                                                      getattr(self.bgcolor_inactive, "blue")))
+
+        for bit in ['red', 'green', 'blue']:
+            setattr(self.bgcolor_inactive, bit,
+                    getattr(self.bgcolor_inactive, bit) * bg_factor)
+        dbg(("bgcolor_inactive set to: RGB(%s,%s,%s)", getattr(self.bgcolor_inactive, "red"),
+                                                      getattr(self.bgcolor_inactive, "green"),
+                                                      getattr(self.bgcolor_inactive, "blue")))
+
         colors = self.config['palette'].split(':')
         self.palette_active = []
         for color in colors:
@@ -789,7 +806,7 @@ class Terminal(Gtk.VBox):
             self.vte.set_colors(self.fgcolor_active, self.bgcolor,
                                 self.palette_active)
         else:
-            self.vte.set_colors(self.fgcolor_inactive, self.bgcolor,
+            self.vte.set_colors(self.fgcolor_inactive, self.bgcolor_inactive,
                                 self.palette_inactive)
         profiles = self.config.base.profiles
         terminal_box_style_context = self.terminalbox.get_style_context()
@@ -1355,7 +1372,7 @@ class Terminal(Gtk.VBox):
 
     def on_vte_focus_out(self, _widget, _event):
         """Inform other parts of the application when focus is lost"""
-        self.vte.set_colors(self.fgcolor_inactive, self.bgcolor,
+        self.vte.set_colors(self.fgcolor_inactive, self.bgcolor_inactive,
                             self.palette_inactive)
         self.set_cursor_color()
         self.emit('focus-out')