diff --git a/src/tile.js b/src/tile.js
index 94f58cc2..56fe1824 100644
--- a/src/tile.js
+++ b/src/tile.js
@@ -193,6 +193,11 @@ $.Tile.prototype = {
         return this.level + "/" + this.x + "_" + this.y;
     },
 
+    // private
+    _hasTransparencyChannel: function() {
+        return this.context2D || this.url.match('.png');
+    },
+
     /**
      * Renders the tile in an html container.
      * @function
@@ -295,8 +300,7 @@ $.Tile.prototype = {
         //ie its done fading or fading is turned off, and if we are drawing
         //an image with an alpha channel, then the only way
         //to avoid seeing the tile underneath is to clear the rectangle
-        if (context.globalAlpha === 1 &&
-                (this.context2D || this.url.match('.png'))) {
+        if (context.globalAlpha === 1 && this._hasTransparencyChannel()) {
             //clearing only the inside of the rectangle occupied
             //by the png prevents edge flikering
             context.clearRect(
@@ -305,7 +309,6 @@ $.Tile.prototype = {
                 size.x - 2,
                 size.y - 2
             );
-
         }
 
         // This gives the application a chance to make image manipulation
diff --git a/src/tiledimage.js b/src/tiledimage.js
index 7ad9d7f2..9f3acf46 100644
--- a/src/tiledimage.js
+++ b/src/tiledimage.js
@@ -650,6 +650,11 @@ $.extend($.TiledImage.prototype, $.EventSource.prototype, /** @lends OpenSeadrag
          * @property {?Object} userData - Arbitrary subscriber-defined object.
          */
         this.raiseEvent('bounds-change');
+    },
+
+    // private
+    _isBottomItem: function() {
+        return this.viewer.world.getItemAt(0) === this;
     }
 });
 
@@ -1324,22 +1329,22 @@ function compareTiles( previousBest, tile ) {
 }
 
 function drawTiles( tiledImage, lastDrawn ) {
-    var i,
-        tile = lastDrawn[0];
-
-    if ( tiledImage.opacity <= 0 ) {
-        drawDebugInfo( tiledImage, lastDrawn );
+    if (lastDrawn.length === 0) {
         return;
     }
+    var tile = lastDrawn[0];
+
     var useSketch = tiledImage.opacity < 1 ||
-          (tiledImage.compositeOperation && tiledImage.compositeOperation !== 'source-over');
+        (tiledImage.compositeOperation &&
+            tiledImage.compositeOperation !== 'source-over') ||
+        (!tiledImage._isBottomItem() && tile._hasTransparencyChannel());
 
     var sketchScale;
     var sketchTranslate;
 
     var zoom = tiledImage.viewport.getZoom(true);
     var imageZoom = tiledImage.viewportToImageZoom(zoom);
-    if (imageZoom > tiledImage.smoothTileEdgesMinZoom && tile) {
+    if (imageZoom > tiledImage.smoothTileEdgesMinZoom) {
         // When zoomed in a lot (>100%) the tile edges are visible.
         // So we have to composite them at ~100% and scale them up together.
         useSketch = true;
@@ -1396,7 +1401,7 @@ function drawTiles( tiledImage, lastDrawn ) {
         tiledImage._drawer.drawRectangle(placeholderRect, fillStyle, useSketch);
     }
 
-    for ( i = lastDrawn.length - 1; i >= 0; i-- ) {
+    for (var i = lastDrawn.length - 1; i >= 0; i--) {
         tile = lastDrawn[ i ];
         tiledImage._drawer.drawTile( tile, tiledImage._drawingHandler, useSketch, sketchScale, sketchTranslate );
         tile.beingDrawn = true;
diff --git a/test/modules/multi-image.js b/test/modules/multi-image.js
index f3710429..1cfd0515 100644
--- a/test/modules/multi-image.js
+++ b/test/modules/multi-image.js
@@ -5,12 +5,12 @@
 
     module( 'Multi-Image', {
         setup: function() {
-            $( '<div id="itemsexample"></div>' ).appendTo( "#qunit-fixture" );
+            $( '<div id="example"></div>' ).appendTo( "#qunit-fixture" );
 
             testLog.reset();
 
             viewer = OpenSeadragon( {
-                id: 'itemsexample',
+                id: 'example',
                 prefixUrl: '/build/openseadragon/images/',
                 springStiffness: 100 // Faster animation = faster tests
             });
@@ -21,7 +21,7 @@
             }
 
             viewer = null;
-            $( "#itemsexample" ).remove();
+            $("#example").remove();
         }
     } );
 
@@ -208,4 +208,57 @@
         viewer.open('/test/data/testpattern.dzi');
     });
 
+    asyncTest('Transparent image on top of others', function() {
+        viewer.open('/test/data/testpattern.dzi');
+
+        // TODO: replace with fully-loaded event listener when available.
+        setTimeout(function() {
+            var imageData = viewer.drawer.context.getImageData(0, 0, 500, 500);
+            // Pixel 250,250 will be in the hole of the A
+            var expectedVal = getPixelValue(imageData, 250, 250);
+
+            notEqual(expectedVal.r, 0, 'Red channel should not be 0');
+            notEqual(expectedVal.g, 0, 'Green channel should not be 0');
+            notEqual(expectedVal.b, 0, 'Blue channel should not be 0');
+            notEqual(expectedVal.a, 0, 'Alpha channel should not be 0');
+
+            viewer.addSimpleImage({
+                url: '/test/data/A.png'
+            });
+
+            // TODO: replace with fully-loaded event listener when available.
+            setTimeout(function() {
+                var imageData = viewer.drawer.context.getImageData(0, 0, 500, 500);
+                var actualVal = getPixelValue(imageData, 250, 250);
+
+                equal(actualVal.r, expectedVal.r,
+                    'Red channel should not change in transparent part of the A');
+                equal(actualVal.g, expectedVal.g,
+                    'Green channel should not change in transparent part of the A');
+                equal(actualVal.b, expectedVal.b,
+                    'Blue channel should not change in transparent part of the A');
+                equal(actualVal.a, expectedVal.a,
+                    'Alpha channel should not change in transparent part of the A');
+
+                var onAVal = getPixelValue(imageData, 333, 250);
+                equal(onAVal.r, 0, 'Red channel should be null on the A');
+                equal(onAVal.g, 0, 'Green channel should be null on the A');
+                equal(onAVal.b, 0, 'Blue channel should be null on the A');
+                equal(onAVal.a, 255, 'Alpha channel should be 255 on the A');
+
+                start();
+            }, 500);
+        }, 500);
+
+        function getPixelValue(imageData, x, y) {
+            var offset = 4 * (y * imageData.width + x);
+            return {
+                r: imageData.data[offset],
+                g: imageData.data[offset + 1],
+                b: imageData.data[offset + 2],
+                a: imageData.data[offset + 3]
+            };
+        }
+    });
+
 })();