diff --git a/AppKit/CPWebView.j b/AppKit/CPWebView.j
index 6d33d9f8f..633a1bfc5 100644
--- a/AppKit/CPWebView.j
+++ b/AppKit/CPWebView.j
@@ -123,6 +123,8 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
     CGSize              _scrollSize;
 
     int                 _loadHTMLStringTimer;
+
+    BOOL                _drawsBackground;
 }
 
 - (id)initWithFrame:(CPRect)frameRect frameName:(CPString)frameName groupName:(CPString)groupName
@@ -146,6 +148,10 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
         _contentIsAccessible    = YES;
         _isLoading              = NO;
 
+        _drawsBackground        = YES;
+
+        [self setBackgroundColor:[CPColor whiteColor]];
+
         [self _initDOMWithFrame:aFrame];
     }
 
@@ -164,7 +170,7 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
     _iframe.style.borderWidth = "0px";
     _iframe.frameBorder = "0";
 
-    [self setDrawsBackground:YES];
+    [self _applyBackgroundColor];
 
     _loadCallback = function()
     {
@@ -383,6 +389,7 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
     }
 
     parent.appendChild(_iframe);
+    [self _applyBackgroundColor];
 
     [self _resizeWebFrame];
 }
@@ -714,19 +721,44 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
 */
 - (BOOL)drawsBackground
 {
-    return _iframe.style.backgroundColor != "";
+    return _drawsBackground;
 }
 
 /*!
-    Sets whether the webview draws its own background.
+    Sets whether the webview draws its own background when the displayed contents do not.
+
+    If you are trying to create a transparent iframe:
+
+    A) call this method with NO
+    A) call setBackground:[CPColor transparent]
+    B) ensure the content does not draw a background, e.g. it has <body style="background-color: transparent;">
 
     @param BOOL - YES if the webview should draw its background, otherwise NO.
 */
-- (void)setDrawsBackground:(BOOL)drawsBackround
+- (void)setDrawsBackground:(BOOL)drawsBackground
 {
-    _iframe.style.backgroundColor = drawsBackround ? "white" : "";
+    if (drawsBackground == _drawsBackground)
+        return;
+    _drawsBackground = drawsBackground;
+
+    [self _applyBackgroundColor];
 }
 
+- (void)setBackgroundColor:(CPColor)aColor
+{
+    [super setBackgroundColor:aColor];
+    [self _applyBackgroundColor];
+}
+
+- (void)_applyBackgroundColor
+{
+    if (_iframe)
+    {
+        var bgColor = [self backgroundColor] || [CPColor whiteColor];
+        _iframe.allowtransparency = !_drawsBackground;
+        _iframe.style.backgroundColor = _drawsBackground ? [bgColor cssString] : "transparent";
+    }
+}
 
 // IBActions
 
@@ -943,7 +975,9 @@ CPWebViewAppKitScrollMaxPollCount                  = 3;
         [self _initDOMWithFrame:[self frame]];
 #endif
 
-        [self setBackgroundColor:[CPColor whiteColor]];
+        if (![self backgroundColor])
+            [self setBackgroundColor:[CPColor whiteColor]];
+
         [self _updateEffectiveScrollMode];
     }
 
diff --git a/Tests/Manual/CPWebViewTest/AppController.j b/Tests/Manual/CPWebViewTest/AppController.j
index b2370448f..39ee8a92d 100644
--- a/Tests/Manual/CPWebViewTest/AppController.j
+++ b/Tests/Manual/CPWebViewTest/AppController.j
@@ -23,11 +23,16 @@
 
 - (void)applicationDidFinishLaunching:(CPNotification)aNotification
 {
+    [[theWindow contentView] setBackgroundColor:[CPColor grayColor]];
+
     [webView1 setScrollMode:CPWebViewScrollAuto];
-    [webView1 loadHTMLString:"<html><body><img src='http://cappuccino.org/images/cappuccino-icon.png'><img src='http://cappuccino.org/images/cappuccino-icon.png'></body></html>"];
+    [webView1 loadHTMLString:"<html><body style='background-color:transparent'><p>This web view should have a coloured background.</p><img src='http://cappuccino.org/images/cappuccino-icon.png'><img src='http://cappuccino.org/images/cappuccino-icon.png'></body></html>"];
+    [webView1 setBackgroundColor:[CPColor orangeColor]];
 
     [webView2 setScrollMode:CPWebViewScrollNative];
-    [webView2 loadHTMLString:"<html><body><img src='http://cappuccino.org/images/cappuccino-icon.png'><img src='http://cappuccino.org/images/cappuccino-icon.png'></body></html>"];
+    [webView2 loadHTMLString:"<html><body style='background-color:transparent'><p>This web view should be transparent.</p><img src='http://cappuccino.org/images/cappuccino-icon.png'><img src='http://cappuccino.org/images/cappuccino-icon.png'></body></html>"];
+    [webView2 setDrawsBackground:NO];
+    [webView2 setBackgroundColor:[CPColor clearColor]];
 
     [webView3 setScrollMode:CPWebViewScrollAuto];
     [webView3 setMainFrameURL:[[CPBundle mainBundle] pathForResource:"hello_world.html"]];