diff --git a/src/terminal/color-scheme.c b/src/terminal/color-scheme.c
index 2799aac9..f4300196 100644
--- a/src/terminal/color-scheme.c
+++ b/src/terminal/color-scheme.c
@@ -247,5 +247,10 @@ void guac_terminal_parse_color_scheme(guac_client* client,
                 (const guac_terminal_color(*)[256]) palette, color_target))
             return; /* Parsing failed. */
     }
+
+    /* Persist pseudo-index for foreground/background colors */
+    foreground->palette_index = GUAC_TERMINAL_COLOR_FOREGROUND;
+    background->palette_index = GUAC_TERMINAL_COLOR_BACKGROUND;
+
 }
 
diff --git a/src/terminal/display.c b/src/terminal/display.c
index 480e8398..1c803b41 100644
--- a/src/terminal/display.c
+++ b/src/terminal/display.c
@@ -78,7 +78,12 @@ int __guac_terminal_set_colors(guac_terminal_display* display,
     }
 
     display->glyph_foreground = *foreground;
+    guac_terminal_display_lookup_color(display,
+            foreground->palette_index, &display->glyph_foreground);
+
     display->glyph_background = *background;
+    guac_terminal_display_lookup_color(display,
+            background->palette_index, &display->glyph_background);
 
     /* Modify color if half-bright (low intensity) */
     if (attributes->half_bright && !attributes->bold) {
@@ -315,6 +320,18 @@ int guac_terminal_display_assign_color(guac_terminal_display* display,
 int guac_terminal_display_lookup_color(guac_terminal_display* display,
         int index, guac_terminal_color* color) {
 
+    /* Use default foreground if foreground pseudo-index is given */
+    if (index == GUAC_TERMINAL_COLOR_FOREGROUND) {
+        *color = display->default_foreground;
+        return 0;
+    }
+
+    /* Use default background if background pseudo-index is given */
+    if (index == GUAC_TERMINAL_COLOR_BACKGROUND) {
+        *color = display->default_background;
+        return 0;
+    }
+
     /* Lookup fails if out-of-bounds */
     if (index < 0 || index > 255)
         return 1;
@@ -658,11 +675,15 @@ void __guac_terminal_display_flush_clear(guac_terminal_display* display) {
                 int rect_width, rect_height;
 
                 /* Color of the rectangle to draw */
-                const guac_terminal_color* color;
+                guac_terminal_color color;
                 if (current->character.attributes.reverse != current->character.attributes.cursor)
-                   color = &current->character.attributes.foreground;
+                   color = current->character.attributes.foreground;
                 else
-                   color = &current->character.attributes.background;
+                   color = current->character.attributes.background;
+
+                /* Rely only on palette index if defined */
+                guac_terminal_display_lookup_color(display,
+                        color.palette_index, &color);
 
                 /* Current row within a subrect */
                 guac_terminal_operation* rect_current_row;
@@ -685,7 +706,7 @@ void __guac_terminal_display_flush_clear(guac_terminal_display* display) {
                         /* If not identical operation, stop */
                         if (rect_current->type != GUAC_CHAR_SET
                                 || guac_terminal_has_glyph(rect_current->character.value)
-                                || guac_terminal_colorcmp(joining_color, color) != 0)
+                                || guac_terminal_colorcmp(joining_color, &color) != 0)
                             break;
 
                         /* Next column */
@@ -730,7 +751,7 @@ void __guac_terminal_display_flush_clear(guac_terminal_display* display) {
                         /* Mark clear operations as NOP */
                         if (rect_current->type == GUAC_CHAR_SET
                                 && !guac_terminal_has_glyph(rect_current->character.value)
-                                && guac_terminal_colorcmp(joining_color, color) == 0)
+                                && guac_terminal_colorcmp(joining_color, &color) == 0)
                             rect_current->type = GUAC_CHAR_NOP;
 
                         /* Next column */
@@ -750,7 +771,7 @@ void __guac_terminal_display_flush_clear(guac_terminal_display* display) {
                         row * display->char_height,
                         rect_width * display->char_width,
                         rect_height * display->char_height,
-                        color->red, color->green, color->blue,
+                        color.red, color.green, color.blue,
                         0xFF);
 
             } /* end if clear operation */
diff --git a/src/terminal/palette.c b/src/terminal/palette.c
index cdbe4156..a6b2d5ae 100644
--- a/src/terminal/palette.c
+++ b/src/terminal/palette.c
@@ -289,6 +289,10 @@ const guac_terminal_color GUAC_TERMINAL_INITIAL_PALETTE[256] = {
 int guac_terminal_colorcmp(const guac_terminal_color* a,
         const guac_terminal_color* b) {
 
+    /* Compare palette index alone if not unknown */
+    if (a->palette_index != -1 && b->palette_index != -1)
+        return a->palette_index - b->palette_index;
+
     /* Consider red component highest order ... */
     if (a->red != b->red)
         return a->red - b->red;
diff --git a/src/terminal/terminal/palette.h b/src/terminal/terminal/palette.h
index 7f467258..b1524b5a 100644
--- a/src/terminal/terminal/palette.h
+++ b/src/terminal/terminal/palette.h
@@ -24,6 +24,20 @@
 
 #include <stdint.h>
 
+/**
+ * The pseudo-index of the color set as the the default foreground color for
+ * the terminal. Regardless of what changes are made to the palette, this index
+ * will always return the current default foreground color.
+ */
+#define GUAC_TERMINAL_COLOR_FOREGROUND -2
+
+/**
+ * The pseudo-index of the color set as the the default background color for
+ * the terminal. Regardless of what changes are made to the palette, this index
+ * will always return the current default background color.
+ */
+#define GUAC_TERMINAL_COLOR_BACKGROUND -3
+
 /**
  * The index of black within the terminal color palette.
  */