diff --git a/src/nvim/decoration.c b/src/nvim/decoration.c
index ec11c20b3e..ce1af290c1 100644
--- a/src/nvim/decoration.c
+++ b/src/nvim/decoration.c
@@ -83,6 +83,9 @@ void decor_redraw(buf_T *buf, int row1, int row2, Decoration *decor)
 
   if (decor && decor_virt_pos(*decor)) {
     redraw_buf_line_later(buf, row1 + 1, false);
+    if (decor->virt_text_pos == kVTInline) {
+      changed_line_display_buf(buf);
+    }
   }
 
   if (decor && kv_size(decor->virt_lines)) {
diff --git a/test/functional/ui/decorations_spec.lua b/test/functional/ui/decorations_spec.lua
index d029a66301..94267e35c4 100644
--- a/test/functional/ui/decorations_spec.lua
+++ b/test/functional/ui/decorations_spec.lua
@@ -1272,6 +1272,32 @@ end]]
                                                         |
       ]]}
   end)
+
+  it('adjusts cursor location correctly when inserting around inline virtual text', function()
+        insert('12345678')
+        feed '$'
+        meths.buf_set_extmark(0, ns, 0, 4,
+            { virt_text = { { ' virtual text ', 'Special' } }, virt_text_pos = 'inline' })
+
+        screen:expect { grid = [[
+      1234{28: virtual text }567^8                            |
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+      {1:~                                                 }|
+                                                        |
+      ]]
+        }
+  end)
 end)
 
 describe('decorations: virtual lines', function()