diff --git a/src/screen.c b/src/screen.c
index 5ab2e85fc8..77a3c1895f 100644
--- a/src/screen.c
+++ b/src/screen.c
@@ -8127,7 +8127,7 @@ screen_start_highlight(int attr)
 			term_bg_color(aep->ae_u.cterm.bg_color - 1);
 		}
 
-		if (t_colors <= 1)
+		if (!IS_CTERM)
 		{
 		    if (aep->ae_u.term.start != NULL)
 			out_str(aep->ae_u.term.start);
diff --git a/src/testdir/test_highlight.vim b/src/testdir/test_highlight.vim
index f3d7d0f2a0..0c4be7bf39 100644
--- a/src/testdir/test_highlight.vim
+++ b/src/testdir/test_highlight.vim
@@ -514,3 +514,17 @@ func Test_highlight_eol_on_diff()
   bwipe!
   diffoff
 endfunc
+
+func Test_termguicolors()
+  if !exists('+termguicolors')
+    return
+  endif
+
+  " Basic test that setting 'termguicolors' works with one color.
+  set termguicolors
+  redraw
+  set t_Co=1
+  redraw
+  set t_Co=0
+  redraw
+endfunc
diff --git a/src/version.c b/src/version.c
index eabf6fb310..23b0168101 100644
--- a/src/version.c
+++ b/src/version.c
@@ -766,6 +766,8 @@ static char *(features[]) =
 
 static int included_patches[] =
 {   /* Add new patch number below this line */
+/**/
+    1600,
 /**/
     1599,
 /**/