diff --git a/src/main.rs b/src/main.rs
index eb67985..f1a5c4f 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -32,6 +32,7 @@ use tokio::sync::mpsc;
 
 use config::{AppTheme, Config, CONFIG_VERSION};
 mod config;
+mod mouse_reporter;
 
 use icon_cache::IconCache;
 mod icon_cache;
diff --git a/src/mouse_reporter.rs b/src/mouse_reporter.rs
new file mode 100644
index 0000000..77c2a6d
--- /dev/null
+++ b/src/mouse_reporter.rs
@@ -0,0 +1,197 @@
+use cosmic::{
+    iced::mouse::{Event as MouseEvent, ScrollDelta},
+    iced::{keyboard::Modifiers, mouse::Button, Event},
+};
+
+use crate::terminal::Terminal;
+
+const SCROLL_SPEED: u32 = 3;
+
+#[derive(Default)]
+pub struct MouseReporter {
+    last_movment_x: Option<u32>,
+    last_movment_y: Option<u32>,
+    button: Option<Button>,
+}
+
+impl MouseReporter {
+    fn button_number(&self, button: Button) -> Option<u8> {
+        match button {
+            Button::Left => Some(0),
+            Button::Middle => Some(1),
+            Button::Right => Some(2),
+            _ => None,
+        }
+    }
+
+    //Implemented according to
+    //https://invisible-island.net/xterm/ctlseqs/ctlseqs.html#h2-Mouse-Tracking
+    pub fn normal_mouse_code(
+        &mut self,
+        event: Event,
+        modifiers: &Modifiers,
+        is_utf8: bool,
+        x: u32,
+        y: u32,
+    ) -> Option<Vec<u8>> {
+        //Buttons are handle slightly different between normal and sgr
+        //for normal/utf8 the button release is always reported as button 3
+        let Some(mut button) = (match event {
+            Event::Mouse(MouseEvent::ButtonPressed(b)) => {
+                self.button = Some(b);
+                self.button_number(b)
+            }
+            Event::Mouse(MouseEvent::ButtonReleased(_b)) => {
+                self.button = None;
+                Some(3)
+            }
+            Event::Mouse(MouseEvent::CursorMoved { .. }) => {
+                //Button pressed is reported as button 32 + 0,1,2 and event code M
+                //And only reported if a button is previously pressed
+                if (self.last_movment_x, self.last_movment_y) == (Some(x), Some(y)) {
+                    return None;
+                } else {
+                    self.last_movment_x = Some(x);
+                    self.last_movment_y = Some(y);
+                }
+                //It seems that we should add 32 to signal movement even for normal mode
+                //On button-motion events, xterm adds 32 to the event code (the third
+                //character, Cb).
+                //For example, motion into cell x,y with button 1 down is reported as
+                //CSI M @ CxCy ( @  = 32 + 0 (button 1) + 32 (motion indicator) ).
+                self.button
+                    .and_then(|button| self.button_number(button))
+                    .map(|b| b + 32)
+            }
+            _ => None,
+        }) else {
+            return None;
+        };
+
+        if modifiers.shift() {
+            button += 4;
+        }
+        if modifiers.alt() {
+            button += 8;
+        }
+        if modifiers.control() {
+            button += 16;
+        }
+
+        //Normal mode have a max of 223 (255 - 32), while utf8 extend this to 2015
+        let max_point: usize = if is_utf8 { 2015 } else { 223 };
+        if x as usize >= max_point || y as usize >= max_point {
+            return None;
+        }
+
+        let utf8_encode_and_append = |mut pos: u32, dest: &mut Vec<u8>| {
+            pos += 1 + 32;
+            let mut utf8 = [0; 2]; //This is large enough since we have a max of 2015
+            dest.extend_from_slice(
+                (char::from_u32(pos).unwrap()) //This unwrap and encode_utf8 is safe due to our
+                    //specific range, pos will max be 2047
+                    .encode_utf8(&mut utf8)
+                    .as_bytes(),
+            );
+        };
+
+        //SPEC: Likewise, Cb will be UTF-8 encoded, to reduce confusion with wheel mouse events.
+        //Always, or only when the the cooardinates is used? No other terminal seems to do this a
+        //all? Doing what they are doing for now.
+        let mut buf: Vec<u8> = vec![b'\x1b', b'[', b'M', 32 + button];
+        //Should we remove 32+button from previous line, and use this instead? Or only on >= 95
+        //utf8_encode_and_append(32 + button, &mut buf);
+
+        //For utf8 spec say: For positions less than 95, the resulting output is identical under both modes.
+        //But also: Under normal mouse mode, positions outside (160,94) result in byte pairs which can be interpreted as a single UTF-8
+        if is_utf8 && x >= 95 {
+            utf8_encode_and_append(x, &mut buf);
+        } else {
+            //SPEC: For positions less than 95, the resulting output is identical under both modes.
+            buf.push(32 + 1 + x as u8);
+        }
+
+        if is_utf8 && y >= 95 {
+            utf8_encode_and_append(y, &mut buf);
+        } else {
+            //SPEC For positions less than 95, the resulting output is identical under both modes.
+            buf.push(32 + 1 + y as u8);
+        }
+        Some(buf)
+    }
+
+    pub fn sgr_mouse_code(
+        &mut self,
+        event: Event,
+        modifiers: &Modifiers,
+        x: u32,
+        y: u32,
+    ) -> Option<Vec<u8>> {
+        let Some((button_no, event_code)) = (match event {
+            Event::Mouse(MouseEvent::ButtonPressed(button)) => {
+                //Button pressed is reported as button 0,1,2 and event code M
+                self.button = Some(button);
+                Some((self.button_number(button), "M"))
+            }
+            Event::Mouse(MouseEvent::ButtonReleased(button)) => {
+                //Button pressed is reported as button 0,1,2 and event code m
+                self.button = None;
+                Some((self.button_number(button), "m"))
+            }
+            Event::Mouse(MouseEvent::CursorMoved { .. }) => {
+                //Button pressed is reported as button 32 + 0,1,2 and event code M
+                //And only reported if a button is previously pressed
+                if (self.last_movment_x, self.last_movment_y) == (Some(x), Some(y)) {
+                    return None;
+                } else {
+                    self.last_movment_x = Some(x);
+                    self.last_movment_y = Some(y);
+                }
+                self.button
+                    .map(|button| (self.button_number(button).map(|b| b + 32), "M"))
+            }
+            _ => None,
+        }) else {
+            return None;
+        };
+
+        if let Some(mut button_no) = button_no {
+            if modifiers.shift() {
+                button_no += 4;
+            }
+            if modifiers.alt() {
+                button_no += 8;
+            }
+            if modifiers.control() {
+                button_no += 16;
+            }
+            let term_code = format!("\x1b[<{};{};{}{}", button_no, x + 1, y + 1, event_code);
+            Some(term_code.as_bytes().to_vec())
+        } else {
+            None
+        }
+    }
+
+    //Emulate mouse wheel scroll with up/down arrows. Using mouse spec uses
+    //scroll-back and scroll-forw actions, which moves whole windows like page up/page down.
+    pub fn report_mouse_wheel_scroll(
+        &self,
+        terminal: &Terminal,
+        term_cell_width: f32,
+        term_cell_height: f32,
+        delta: ScrollDelta,
+    ) {
+        let (_delta_x, delta_y) = match delta {
+            ScrollDelta::Lines { x, y } => (x, y),
+            ScrollDelta::Pixels { x, y } => (x / term_cell_width, y / term_cell_height),
+        };
+        //Send delta_y * SCROLL_SPEED number of Up/Down arrows
+        for _ in 0..(delta_y.abs() as u32 * SCROLL_SPEED) {
+            if delta_y > 0.0 {
+                terminal.input_no_scroll(b"\x1B[1;3A".as_slice())
+            } else if delta_y < 0.0 {
+                terminal.input_no_scroll(b"\x1B[1;3B".as_slice())
+            }
+        }
+    }
+}
diff --git a/src/terminal.rs b/src/terminal.rs
index 419979e..322abfa 100644
--- a/src/terminal.rs
+++ b/src/terminal.rs
@@ -17,6 +17,7 @@ use alacritty_terminal::{
 };
 use cosmic::{
     iced::advanced::graphics::text::font_system,
+    iced::mouse::ScrollDelta,
     widget::{pane_grid, segmented_button},
 };
 use cosmic_text::{
@@ -34,7 +35,7 @@ use tokio::sync::mpsc;
 
 pub use alacritty_terminal::grid::Scroll as TerminalScroll;
 
-use crate::config::Config as AppConfig;
+use crate::{config::Config as AppConfig, mouse_reporter::MouseReporter};
 
 #[derive(Clone, Copy, Debug)]
 pub struct Size {
@@ -189,6 +190,7 @@ pub struct Terminal {
     search_regex_opt: Option<RegexSearch>,
     search_value: String,
     pub metadata_set: IndexSet<Metadata>,
+    mouse_reporter: MouseReporter,
 }
 
 impl Terminal {
@@ -275,6 +277,7 @@ impl Terminal {
             search_regex_opt: None,
             search_value: String::new(),
             metadata_set,
+            mouse_reporter: Default::default(),
         }
     }
 
@@ -776,6 +779,40 @@ impl Terminal {
         let term = self.term.lock();
         viewport_to_point(term.grid().display_offset(), point)
     }
+
+    pub fn report_mouse(
+        &mut self,
+        event: cosmic::iced::Event,
+        modifiers: &cosmic::iced::keyboard::Modifiers,
+        x: u32,
+        y: u32,
+    ) {
+        let term_lock = self.term.lock();
+        let mode = term_lock.mode();
+        if mode.contains(TermMode::SGR_MOUSE) {
+            if let Some(code) = self.mouse_reporter.sgr_mouse_code(event, modifiers, x, y) {
+                self.input_no_scroll(code)
+            }
+        } else {
+            if let Some(code) = self.mouse_reporter.normal_mouse_code(
+                event,
+                modifiers,
+                mode.contains(TermMode::UTF8_MOUSE),
+                x,
+                y,
+            ) {
+                self.input_no_scroll(code)
+            }
+        }
+    }
+    pub fn scroll_mouse(&mut self, delta: ScrollDelta) {
+        self.mouse_reporter.report_mouse_wheel_scroll(
+            self,
+            self.size().cell_width,
+            self.size().cell_height,
+            delta,
+        );
+    }
 }
 
 impl Drop for Terminal {
diff --git a/src/terminal_box.rs b/src/terminal_box.rs
index 5a038f0..d55874d 100644
--- a/src/terminal_box.rs
+++ b/src/terminal_box.rs
@@ -594,6 +594,7 @@ where
         let buffer_size = terminal.with_buffer(|buffer| buffer.size());
 
         let is_app_cursor = terminal.term.lock().mode().contains(TermMode::APP_CURSOR);
+        let is_mouse_mode = terminal.term.lock().mode().intersects(TermMode::MOUSE_MODE);
 
         let mut status = Status::Ignored;
         match event {
@@ -1009,98 +1010,128 @@ where
             }
             Event::Mouse(MouseEvent::ButtonPressed(button)) => {
                 if let Some(p) = cursor_position.position_in(layout.bounds()) {
-                    state.is_focused = true;
+                    let x = p.x - self.padding.left;
+                    let y = p.y - self.padding.top;
+                    //TODO: better calculation of position
+                    let col = x / terminal.size().cell_width;
+                    let row = y / terminal.size().cell_height;
 
-                    // Handle left click drag
-                    if let Button::Left = button {
-                        let x = p.x - self.padding.left;
-                        let y = p.y - self.padding.top;
-                        if x >= 0.0 && x < buffer_size.0 && y >= 0.0 && y < buffer_size.1 {
-                            let click_kind =
-                                if let Some((click_kind, click_time)) = state.click.take() {
-                                    if click_time.elapsed() < self.click_timing {
-                                        match click_kind {
-                                            ClickKind::Single => ClickKind::Double,
-                                            ClickKind::Double => ClickKind::Triple,
-                                            ClickKind::Triple => ClickKind::Single,
+                    if is_mouse_mode {
+                        terminal.report_mouse(event, &state.modifiers, col as u32, row as u32);
+                    } else {
+                        state.is_focused = true;
+
+                        // Handle left click drag
+                        if let Button::Left = button {
+                            let x = p.x - self.padding.left;
+                            let y = p.y - self.padding.top;
+                            if x >= 0.0 && x < buffer_size.0 && y >= 0.0 && y < buffer_size.1 {
+                                let click_kind =
+                                    if let Some((click_kind, click_time)) = state.click.take() {
+                                        if click_time.elapsed() < self.click_timing {
+                                            match click_kind {
+                                                ClickKind::Single => ClickKind::Double,
+                                                ClickKind::Double => ClickKind::Triple,
+                                                ClickKind::Triple => ClickKind::Single,
+                                            }
+                                        } else {
+                                            ClickKind::Single
                                         }
                                     } else {
                                         ClickKind::Single
-                                    }
+                                    };
+                                let location = terminal.viewport_to_point(TermPoint::new(
+                                    row as usize,
+                                    TermColumn(col as usize),
+                                ));
+                                let side = if col.fract() < 0.5 {
+                                    TermSide::Left
                                 } else {
-                                    ClickKind::Single
+                                    TermSide::Right
                                 };
-                            //TODO: better calculation of position
-                            let col = x / terminal.size().cell_width;
-                            let row = y / terminal.size().cell_height;
-                            let location = terminal.viewport_to_point(TermPoint::new(
-                                row as usize,
-                                TermColumn(col as usize),
-                            ));
-                            let side = if col.fract() < 0.5 {
-                                TermSide::Left
-                            } else {
-                                TermSide::Right
-                            };
-                            let selection = match click_kind {
-                                ClickKind::Single => {
-                                    Selection::new(SelectionType::Simple, location, side)
+                                let selection = match click_kind {
+                                    ClickKind::Single => {
+                                        Selection::new(SelectionType::Simple, location, side)
+                                    }
+                                    ClickKind::Double => {
+                                        Selection::new(SelectionType::Semantic, location, side)
+                                    }
+                                    ClickKind::Triple => {
+                                        Selection::new(SelectionType::Lines, location, side)
+                                    }
+                                };
+                                {
+                                    let mut term = terminal.term.lock();
+                                    term.selection = Some(selection);
                                 }
-                                ClickKind::Double => {
-                                    Selection::new(SelectionType::Semantic, location, side)
-                                }
-                                ClickKind::Triple => {
-                                    Selection::new(SelectionType::Lines, location, side)
-                                }
-                            };
-                            {
-                                let mut term = terminal.term.lock();
-                                term.selection = Some(selection);
-                            }
-                            terminal.needs_update = true;
-                            state.click = Some((click_kind, Instant::now()));
-                            state.dragging = Some(Dragging::Buffer);
-                        } else if scrollbar_rect.contains(Point::new(x, y)) {
-                            if let Some(start_scroll) = terminal.scrollbar() {
-                                state.dragging = Some(Dragging::Scrollbar {
-                                    start_y: y,
-                                    start_scroll,
-                                });
-                            }
-                        } else if x >= scrollbar_rect.x
-                            && x < (scrollbar_rect.x + scrollbar_rect.width)
-                        {
-                            if terminal.scrollbar().is_some() {
-                                let scroll_ratio =
-                                    terminal.with_buffer(|buffer| y / buffer.size().1);
-                                terminal.scroll_to(scroll_ratio);
+                                terminal.needs_update = true;
+                                state.click = Some((click_kind, Instant::now()));
+                                state.dragging = Some(Dragging::Buffer);
+                            } else if scrollbar_rect.contains(Point::new(x, y)) {
                                 if let Some(start_scroll) = terminal.scrollbar() {
                                     state.dragging = Some(Dragging::Scrollbar {
                                         start_y: y,
                                         start_scroll,
                                     });
                                 }
+                            } else if x >= scrollbar_rect.x
+                                && x < (scrollbar_rect.x + scrollbar_rect.width)
+                            {
+                                if terminal.scrollbar().is_some() {
+                                    let scroll_ratio =
+                                        terminal.with_buffer(|buffer| y / buffer.size().1);
+                                    terminal.scroll_to(scroll_ratio);
+                                    if let Some(start_scroll) = terminal.scrollbar() {
+                                        state.dragging = Some(Dragging::Scrollbar {
+                                            start_y: y,
+                                            start_scroll,
+                                        });
+                                    }
+                                }
                             }
                         }
+                        // Update context menu state
+                        if let Some(on_context_menu) = &self.on_context_menu {
+                            shell.publish((on_context_menu)(match self.context_menu {
+                                Some(_) => None,
+                                None => match button {
+                                    Button::Right => Some(p),
+                                    _ => None,
+                                },
+                            }));
+                        }
+                        status = Status::Captured;
                     }
-
-                    // Update context menu state
-                    if let Some(on_context_menu) = &self.on_context_menu {
-                        shell.publish((on_context_menu)(match self.context_menu {
-                            Some(_) => None,
-                            None => match button {
-                                Button::Right => Some(p),
-                                _ => None,
-                            },
-                        }));
-                    }
-
-                    status = Status::Captured;
                 }
             }
             Event::Mouse(MouseEvent::ButtonReleased(Button::Left)) => {
                 state.dragging = None;
-                status = Status::Captured;
+                if let Some(p) = cursor_position.position_in(layout.bounds()) {
+                    let x = p.x - self.padding.left;
+                    let y = p.y - self.padding.top;
+                    //TODO: better calculation of position
+                    let col = x / terminal.size().cell_width;
+                    let row = y / terminal.size().cell_height;
+                    if is_mouse_mode {
+                        terminal.report_mouse(event, &state.modifiers, col as u32, row as u32);
+                    } else {
+                        status = Status::Captured;
+                    }
+                } else {
+                    status = Status::Captured;
+                }
+            }
+            Event::Mouse(MouseEvent::ButtonReleased(_button)) => {
+                if let Some(p) = cursor_position.position_in(layout.bounds()) {
+                    let x = p.x - self.padding.left;
+                    let y = p.y - self.padding.top;
+                    //TODO: better calculation of position
+                    let col = x / terminal.size().cell_width;
+                    let row = y / terminal.size().cell_height;
+                    if is_mouse_mode {
+                        terminal.report_mouse(event, &state.modifiers, col as u32, row as u32);
+                    }
+                }
             }
             Event::Mouse(MouseEvent::CursorMoved { .. }) => {
                 if let Some(on_mouse_enter) = &self.on_mouse_enter {
@@ -1116,74 +1147,82 @@ where
                         self.mouse_inside_boundary = Some(mouse_is_inside);
                     }
                 }
-                if let Some(dragging) = &state.dragging {
-                    if let Some(p) = cursor_position.position() {
-                        let x = (p.x - layout.bounds().x) - self.padding.left;
-                        let y = (p.y - layout.bounds().y) - self.padding.top;
-                        match dragging {
-                            Dragging::Buffer => {
-                                //TODO: better calculation of position
-                                let col = x / terminal.size().cell_width;
-                                let row = y / terminal.size().cell_height;
-                                let location = terminal.viewport_to_point(TermPoint::new(
-                                    row as usize,
-                                    TermColumn(col as usize),
-                                ));
-                                let side = if col.fract() < 0.5 {
-                                    TermSide::Left
-                                } else {
-                                    TermSide::Right
-                                };
-                                {
-                                    let mut term = terminal.term.lock();
-                                    if let Some(selection) = &mut term.selection {
-                                        selection.update(location, side);
+                if let Some(p) = cursor_position.position() {
+                    let x = (p.x - layout.bounds().x) - self.padding.left;
+                    let y = (p.y - layout.bounds().y) - self.padding.top;
+                    //TODO: better calculation of position
+                    let col = x / terminal.size().cell_width;
+                    let row = y / terminal.size().cell_height;
+                    if is_mouse_mode {
+                        terminal.report_mouse(event, &state.modifiers, col as u32, row as u32);
+                    } else {
+                        if let Some(dragging) = &state.dragging {
+                            match dragging {
+                                Dragging::Buffer => {
+                                    let location = terminal.viewport_to_point(TermPoint::new(
+                                        row as usize,
+                                        TermColumn(col as usize),
+                                    ));
+                                    let side = if col.fract() < 0.5 {
+                                        TermSide::Left
+                                    } else {
+                                        TermSide::Right
+                                    };
+                                    {
+                                        let mut term = terminal.term.lock();
+                                        if let Some(selection) = &mut term.selection {
+                                            selection.update(location, side);
+                                        }
                                     }
+                                    terminal.needs_update = true;
+                                }
+                                Dragging::Scrollbar {
+                                    start_y,
+                                    start_scroll,
+                                } => {
+                                    let scroll_offset = terminal
+                                        .with_buffer(|buffer| ((y - start_y) / buffer.size().1));
+                                    terminal.scroll_to(start_scroll.0 + scroll_offset);
                                 }
-                                terminal.needs_update = true;
-                            }
-                            Dragging::Scrollbar {
-                                start_y,
-                                start_scroll,
-                            } => {
-                                let scroll_offset = terminal
-                                    .with_buffer(|buffer| ((y - start_y) / buffer.size().1));
-                                terminal.scroll_to(start_scroll.0 + scroll_offset);
                             }
                         }
+                        status = Status::Captured;
                     }
-                    status = Status::Captured;
                 }
             }
             Event::Mouse(MouseEvent::WheelScrolled { delta }) => {
                 if let Some(_p) = cursor_position.position_in(layout.bounds()) {
-                    match delta {
-                        ScrollDelta::Lines { x: _, y } => {
-                            //TODO: this adjustment is just a guess!
-                            state.scroll_pixels = 0.0;
-                            let lines = (-y * 6.0) as i32;
-                            if lines != 0 {
-                                terminal.scroll(TerminalScroll::Delta(-lines));
+                    if is_mouse_mode {
+                        terminal.scroll_mouse(delta);
+                    } else {
+                        match delta {
+                            ScrollDelta::Lines { x: _, y } => {
+                                //TODO: this adjustment is just a guess!
+                                state.scroll_pixels = 0.0;
+                                let lines = (-y * 6.0) as i32;
+                                if lines != 0 {
+                                    terminal.scroll(TerminalScroll::Delta(-lines));
+                                }
+                                status = Status::Captured;
                             }
-                            status = Status::Captured;
-                        }
-                        ScrollDelta::Pixels { x: _, y } => {
-                            //TODO: this adjustment is just a guess!
-                            state.scroll_pixels -= y * 6.0;
-                            let mut lines = 0;
-                            let metrics = terminal.with_buffer(|buffer| buffer.metrics());
-                            while state.scroll_pixels <= -metrics.line_height {
-                                lines -= 1;
-                                state.scroll_pixels += metrics.line_height;
+                            ScrollDelta::Pixels { x: _, y } => {
+                                //TODO: this adjustment is just a guess!
+                                state.scroll_pixels -= y * 6.0;
+                                let mut lines = 0;
+                                let metrics = terminal.with_buffer(|buffer| buffer.metrics());
+                                while state.scroll_pixels <= -metrics.line_height {
+                                    lines -= 1;
+                                    state.scroll_pixels += metrics.line_height;
+                                }
+                                while state.scroll_pixels >= metrics.line_height {
+                                    lines += 1;
+                                    state.scroll_pixels -= metrics.line_height;
+                                }
+                                if lines != 0 {
+                                    terminal.scroll(TerminalScroll::Delta(-lines));
+                                }
+                                status = Status::Captured;
                             }
-                            while state.scroll_pixels >= metrics.line_height {
-                                lines += 1;
-                                state.scroll_pixels -= metrics.line_height;
-                            }
-                            if lines != 0 {
-                                terminal.scroll(TerminalScroll::Delta(-lines));
-                            }
-                            status = Status::Captured;
                         }
                     }
                 }