diff --git a/lib/ace/css/editor.css b/lib/ace/css/editor.css
index 5a544076..58d1e7e6 100644
--- a/lib/ace/css/editor.css
+++ b/lib/ace/css/editor.css
@@ -94,8 +94,8 @@
 .ace_editor textarea {
     position: fixed;
     z-index: 0;
-    width: 10px;
-    height: 30px;
+    width: 0.5em;
+    height: 1em;
     opacity: 0;
     background: transparent;
     appearance: none;
diff --git a/lib/ace/editor.js b/lib/ace/editor.js
index 53295878..1feebf68 100644
--- a/lib/ace/editor.js
+++ b/lib/ace/editor.js
@@ -80,6 +80,7 @@ var Editor = function(renderer, session) {
 
     this.commands = new CommandManager(useragent.isMac ? "mac" : "win", defaultCommands);
     this.textInput  = new TextInput(renderer.getTextAreaContainer(), this);
+    this.renderer.textarea = this.textInput.getElement();
     this.keyBinding = new KeyBinding(this);
 
     // TODO detect touch event support
@@ -385,11 +386,7 @@ var Editor = function(renderer, session) {
 
     this.$cursorChange = function() {
         this.renderer.updateCursor();
-
-        // move text input over the cursor
-        // this is required for iOS and IME
-        this.renderer.moveTextAreaToCursor(this.textInput.getElement());
-    }
+    };
 
     /**
      * Editor@onDocumentChange(e) 
diff --git a/lib/ace/keyboard/textinput.js b/lib/ace/keyboard/textinput.js
index 10f12865..fa570e66 100644
--- a/lib/ace/keyboard/textinput.js
+++ b/lib/ace/keyboard/textinput.js
@@ -49,7 +49,9 @@ var TextInput = function(parentNode, host) {
     var text = dom.createElement("textarea");
     if (useragent.isTouchPad)
         text.setAttribute("x-palm-disable-auto-cap", true);
-        
+
+    text.setAttribute("wrap", "off");
+
     text.style.left = "-10000px";
     text.style.position = "fixed";
     parentNode.insertBefore(text, parentNode.firstChild);
diff --git a/lib/ace/layer/cursor.js b/lib/ace/layer/cursor.js
index 1c55d7a8..f43b36b7 100644
--- a/lib/ace/layer/cursor.js
+++ b/lib/ace/layer/cursor.js
@@ -175,6 +175,9 @@ var Cursor = function(parentEl) {
         if (overwrite != this.overwrite)
             this.$setOverite(overwrite);
 
+        // cache for textarea and gutter highlight
+        this.$pixelPos = pixelPos;
+
         this.restartTimer();
     };
 
diff --git a/lib/ace/virtual_renderer.js b/lib/ace/virtual_renderer.js
index 0c2c0880..fc477c58 100644
--- a/lib/ace/virtual_renderer.js
+++ b/lib/ace/virtual_renderer.js
@@ -82,6 +82,9 @@ var VirtualRenderer = function(container, theme) {
     // TODO: this breaks rendering in Cloud9 with multiple ace instances
 //    // Imports CSS once per DOM document ('ace_editor' serves as an identifier).
 //    dom.importCssString(editorCss, "ace_editor", container.ownerDocument);
+    
+    // in IE <= 9 the native cursor always shines through
+    this.$keepTextAreaAtCursor = !useragent.isIE;
 
     dom.addCssClass(container, "ace_editor");
 
@@ -496,30 +499,22 @@ var VirtualRenderer = function(container, theme) {
         return this.container;
     };
 
-    /**
-    * VirtualRenderer.moveTextAreaToCursor(textarea) -> Void
-    * - textarea (DOMElement): A text area to work with
-    *
-    * Changes the position of `textarea` to where the cursor is pointing.
-    **/
-    this.moveTextAreaToCursor = function(textarea) {
-        // in IE the native cursor always shines through
-        // this persists in IE9
-        if (useragent.isIE)
+    // move text input over the cursor
+    // this is required for iOS and IME
+    this.$moveTextAreaToCursor = function() {
+        if (!this.$keepTextAreaAtCursor)
             return;
 
-        if (this.layerConfig.lastRow === 0)
+        var pos = this.$cursorLayer.$pixelPos;
+        pos.top -= this.layerConfig.offset;
+
+        if (pos.top < 0 || pos.top > this.layerConfig.height)
             return;
 
-        var pos = this.$cursorLayer.getPixelPosition();
-        if (!pos)
-            return;
-
-        var bounds = this.content.getBoundingClientRect();
-        var offset = this.layerConfig.offset;
-
-        textarea.style.left = (bounds.left + pos.left) + "px";
-        textarea.style.top = (bounds.top + pos.top - this.scrollTop + offset) + "px";
+        pos.left += (this.showGutter ? this.$gutterLayer.gutterWidth : 0) - this.scrollLeft;
+        var bounds = this.container.getBoundingClientRect();
+        this.textarea.style.left = (bounds.left + pos.left) + "px";
+        this.textarea.style.top = (bounds.top + pos.top) + "px";
     };
 
     /**
@@ -640,6 +635,7 @@ var VirtualRenderer = function(container, theme) {
             this.$markerBack.update(this.layerConfig);
             this.$markerFront.update(this.layerConfig);
             this.$cursorLayer.update(this.layerConfig);
+            this.$moveTextAreaToCursor();
             return;
         }
 
@@ -656,6 +652,7 @@ var VirtualRenderer = function(container, theme) {
             this.$markerBack.update(this.layerConfig);
             this.$markerFront.update(this.layerConfig);
             this.$cursorLayer.update(this.layerConfig);
+            this.$moveTextAreaToCursor();
             return;
         }
 
@@ -675,8 +672,10 @@ var VirtualRenderer = function(container, theme) {
                 this.$gutterLayer.update(this.layerConfig);
         }
 
-        if (changes & this.CHANGE_CURSOR)
+        if (changes & this.CHANGE_CURSOR) {
             this.$cursorLayer.update(this.layerConfig);
+            this.$moveTextAreaToCursor();
+        }
 
         if (changes & (this.CHANGE_MARKER | this.CHANGE_MARKER_FRONT)) {
             this.$markerFront.update(this.layerConfig);