diff --git a/modules/juce_gui_basics/menus/juce_PopupMenu.cpp b/modules/juce_gui_basics/menus/juce_PopupMenu.cpp
index f8706d4001..12efb29c3a 100644
--- a/modules/juce_gui_basics/menus/juce_PopupMenu.cpp
+++ b/modules/juce_gui_basics/menus/juce_PopupMenu.cpp
@@ -439,8 +439,7 @@ struct MenuWindow final : public Component
                     return targetArea.getTopLeft();
                 });
 
-                const auto y = targetPosition.getY() - windowPos.getY();
-                ensureItemComponentIsVisible (**iter, isPositiveAndBelow (y, windowPos.getHeight()) ? std::optional (y) : std::nullopt);
+                ensureItemComponentIsVisible (**iter, targetPosition.getY() - windowPos.getY());
             }
         }
 
@@ -1095,7 +1094,7 @@ struct MenuWindow final : public Component
     {
         const auto parentArea = getParentArea (windowPos.getPosition(), options.getParentComponent()) / scaleFactor;
 
-        if (const auto posAndOffset = computeInitialPosAndOffset (windowPos, parentArea, itemComp.getBounds(), wantedY))
+        if (const auto posAndOffset = computePosAndOffsetToEnsureVisibility (windowPos, parentArea, itemComp.getBounds(), contentHeight, wantedY))
         {
             std::tie (windowPos, childYOffset) = std::tie (posAndOffset->windowPos, posAndOffset->childYOffset);
             updateYPositions();
@@ -1108,40 +1107,49 @@ struct MenuWindow final : public Component
         int childYOffset = 0;
     };
 
-    static std::optional<PosAndOffset> computeInitialPosAndOffset (Rectangle<int> windowPos,
-                                                                   const Rectangle<int>& parentArea,
-                                                                   const Rectangle<int>& itemCompBounds,
-                                                                   std::optional<int> wantedY)
+    static std::optional<PosAndOffset> computePosAndOffsetToEnsureVisibility (Rectangle<int> windowPos,
+                                                                              const Rectangle<int>& parentArea,
+                                                                              const Rectangle<int>& itemCompBounds,
+                                                                              int contentHeight,
+                                                                              std::optional<int> wantedY)
     {
-        if (windowPos.getHeight() <= PopupMenuSettings::scrollZone * 4
-            || (! wantedY.has_value() && 0 <= itemCompBounds.getY() && itemCompBounds.getBottom() <= windowPos.getHeight()))
-        {
+        // If there's no specific wantedY, and the item component is already visible, then we don't
+        // need to make any adjustments.
+        if (! wantedY.has_value() && 0 <= itemCompBounds.getY() && itemCompBounds.getBottom() <= windowPos.getHeight())
             return {};
+
+        const auto spaceNeededAboveItem = jmin (PopupMenuSettings::scrollZone, itemCompBounds.getY());
+        const auto spaceNeededBelowItem = jmin (PopupMenuSettings::scrollZone, contentHeight - itemCompBounds.getBottom());
+        const auto parentSpaceTargetY = windowPos.getY() + wantedY.value_or (itemCompBounds.getY());
+
+        // In order to display the visible item over the target area, we need to make sure that
+        // there's enough space above and below to hold the scroll areas if they're showing.
+        // Ideally, we want to avoid the case where the menu opens with the scroll area over the
+        // target area.
+        const auto isSpaceToOverlay = spaceNeededAboveItem <= (parentSpaceTargetY - parentArea.getY())
+                                   && spaceNeededBelowItem <= (parentArea.getBottom() - (parentSpaceTargetY + itemCompBounds.getHeight()));
+
+        if (wantedY.has_value() && isSpaceToOverlay)
+        {
+            windowPos = windowPos.withY (parentSpaceTargetY - itemCompBounds.getY())
+                                 .withHeight (contentHeight)
+                                 .constrainedWithin (parentArea);
+
+            const auto menuSpaceTargetY = parentSpaceTargetY - windowPos.getY();
+            const auto offset = itemCompBounds.getY() - menuSpaceTargetY;
+
+            return PosAndOffset { windowPos, offset };
         }
 
-        const auto adjustedY = std::invoke ([&]
-        {
-            if (wantedY.has_value())
-                return *wantedY;
+        // If there's not enough space to overlay the menu, then just use the provided menu
+        // bounds but try to position the visible item as close to the target area as possible,
+        // while avoiding the scroll areas.
+        const auto menuSpaceTargetY = jlimit (spaceNeededAboveItem,
+                                              windowPos.getHeight() - spaceNeededBelowItem - itemCompBounds.getHeight(),
+                                              parentSpaceTargetY - windowPos.getY());
+        const auto offset = itemCompBounds.getY() - menuSpaceTargetY;
 
-            return jlimit (PopupMenuSettings::scrollZone,
-                           jmax (PopupMenuSettings::scrollZone,
-                                 windowPos.getHeight() - (PopupMenuSettings::scrollZone + itemCompBounds.getHeight())),
-                           itemCompBounds.getY());
-        });
-
-        const auto deltaY = windowPos.getY() + adjustedY - itemCompBounds.getY();
-
-        windowPos.setSize (jmin (windowPos.getWidth(), parentArea.getWidth()),
-                           jmin (windowPos.getHeight(), parentArea.getHeight()));
-
-        const auto newY = jlimit (parentArea.getY(),
-                                  parentArea.getBottom() - windowPos.getHeight(),
-                                  deltaY);
-
-        windowPos.setY (newY);
-
-        return PosAndOffset { windowPos, newY - deltaY };
+        return PosAndOffset { windowPos, offset };
     }
 
     void resizeToBestWindowPos()