diff --git a/toolkit/content/tests/widgets/test_arrowpanel.xul b/toolkit/content/tests/widgets/test_arrowpanel.xul
index ac9e0e4de15d..d7b5c83d0868 100644
--- a/toolkit/content/tests/widgets/test_arrowpanel.xul
+++ b/toolkit/content/tests/widgets/test_arrowpanel.xul
@@ -17,6 +17,7 @@
   <!-- Our SimpleTest/TestRunner.js runs tests inside an iframe which sizes are W=500 H=300.
        'left' and 'top' values need to be set so that the panel (popup) has enough room to display on its 4 sides. -->
   <label id="middle" value="+/- Centered" left="225" top="135"/>
+  <iframe id="frame" src="data:text/html,&lt;input id='input'&gt;" width="100" height="100" left="225" top="180"/>
 </stack>
 
 <panel id="panel" type="arrow" onpopupshown="checkPanelPosition(this)" onpopuphidden="runNextTest.next()">
@@ -44,7 +45,7 @@ function nextTest()
 
   function openPopup(position, anchor, expected, anchorEdge)
   {
-    expectedAnchor = $(anchor);
+    expectedAnchor = anchor instanceof Node ? anchor : $(anchor);
     expectedSide = expected;
     expectedAnchorEdge = anchorEdge;
 
@@ -114,6 +115,9 @@ function nextTest()
   openPopup("rightcenter bottomleft", "middle", "left", "center bottom");
   yield;
 
+  openPopup("after_start", frames[0].document.getElementById("input"), "top", "left");
+  yield;
+
   SimpleTest.finish();
   yield;
 }
@@ -145,28 +149,34 @@ function checkPanelPosition(panel)
     iscentered = true;
   }
 
-  let adj;
+  let adj = 0, hwinpos = 0, vwinpos = 0;
+  if (anchor.ownerDocument != document) {
+    var framerect = anchor.ownerDocument.defaultView.frameElement.getBoundingClientRect();
+    hwinpos = framerect.left;
+    vwinpos = framerect.top;
+  }
+
   switch (expectedAnchorEdge) {
     case "top":
-      adj = parseInt(getComputedStyle(panel, "").marginTop);
+      adj = vwinpos + parseInt(getComputedStyle(panel, "").marginTop);
       if (iscentered)
         adj += anchorRect.height / 2;
       is(Math.round(panelRect.top), Math.round(anchorRect.top + adj), "anchored on top");
       break;
     case "bottom":
-      adj = parseInt(getComputedStyle(panel, "").marginBottom);
+      adj = vwinpos + parseInt(getComputedStyle(panel, "").marginBottom);
       if (iscentered)
         adj += anchorRect.height / 2;
       is(Math.round(panelRect.bottom), Math.round(anchorRect.bottom - adj), "anchored on bottom");
       break;
     case "left":
-      adj = parseInt(getComputedStyle(panel, "").marginLeft);
+      adj = hwinpos + parseInt(getComputedStyle(panel, "").marginLeft);
       if (iscentered)
         adj += anchorRect.width / 2;
       is(Math.round(panelRect.left), Math.round(anchorRect.left + adj), "anchored on left ");
       break;
     case "right":
-      adj = parseInt(getComputedStyle(panel, "").marginRight);
+      adj = hwinpos + parseInt(getComputedStyle(panel, "").marginRight);
       if (iscentered)
         adj += anchorRect.width / 2;
       is(Math.round(panelRect.right), Math.round(anchorRect.right - adj), "anchored on right");
diff --git a/toolkit/content/widgets/popup.xml b/toolkit/content/widgets/popup.xml
index 8f33fbd501c4..006317b35c33 100644
--- a/toolkit/content/widgets/popup.xml
+++ b/toolkit/content/widgets/popup.xml
@@ -307,13 +307,20 @@
           return;
         }
 
-        var anchorRect = anchor.getBoundingClientRect();
-        var popupRect = this.getBoundingClientRect();
+        let anchorRect = anchor.getBoundingClientRect();
+        let anchorLeft = Math.round(anchor.ownerDocument.defaultView.mozInnerScreenX + anchorRect.left);
+        let anchorTop = Math.round(anchor.ownerDocument.defaultView.mozInnerScreenY + anchorRect.top);
+        let anchorRight = anchorLeft + Math.floor(anchorRect.width);
+        let anchorBottom = anchorTop + Math.floor(anchorRect.height);
 
-        var horizPos = (Math.round(popupRect.right) <= Math.round(anchorRect.left)) ? -1 :
-                       (Math.round(popupRect.left) >= Math.round(anchorRect.right)) ? 1 : 0;
-        var vertPos = (Math.round(popupRect.bottom) <= Math.round(anchorRect.top)) ? -1 :
-                      (Math.round(popupRect.top) >= Math.round(anchorRect.bottom)) ? 1 : 0;
+        let popupRect = this.getBoundingClientRect();
+        let popupLeft = Math.round(window.mozInnerScreenX + popupRect.left);
+        let popupTop = Math.round(window.mozInnerScreenY + popupRect.top);
+        let popupRight = popupLeft + Math.floor(popupRect.width);
+        let popupBottom = popupTop + Math.floor(popupRect.height);
+
+        var horizPos = popupRight <= anchorLeft ? -1 : popupLeft >= anchorRight ? 1 : 0;
+        var vertPos = popupBottom <= anchorTop ? -1 : popupTop >= anchorBottom ? 1 : 0;
 
         var anchorClass = "";
         var hideAnchor = false;
@@ -325,7 +332,7 @@
           }
           else {
             let rtl = (window.getComputedStyle(this).direction == "rtl");
-            arrowbox.pack = (popupRect.left + popupRect.width / 2 < anchorRect.left) != rtl ?
+            arrowbox.pack = (popupLeft + popupRect.width / 2 < anchorLeft) != rtl ?
                               "end" : "start";
             if (vertPos == 1) {
               container.dir = "";
@@ -344,7 +351,7 @@
             hideAnchor = true;
           }
           else {
-            arrowbox.pack = popupRect.top + popupRect.height / 2 < anchorRect.top ? "end" : "start";
+            arrowbox.pack = popupTop + popupRect.height / 2 < anchorTop ? "end" : "start";
             if (horizPos == 1) {
               container.dir = "";
               anchorClass = "left";