diff --git a/src/terminal/scrollbar.c b/src/terminal/scrollbar.c
index c1a5bc9a..e0643976 100644
--- a/src/terminal/scrollbar.c
+++ b/src/terminal/scrollbar.c
@@ -67,6 +67,9 @@ guac_terminal_scrollbar* guac_terminal_scrollbar_alloc(guac_client* client,
     scrollbar->container = guac_client_alloc_layer(client);
     scrollbar->handle    = guac_client_alloc_layer(client);
 
+    /* Init mouse event state tracking */
+    scrollbar->dragging_handle = 0;
+
     /* Reposition and resize to fit parent */
     guac_terminal_scrollbar_parent_resized(scrollbar,
             parent_width, parent_height, visible_area);
@@ -141,15 +144,36 @@ static void calculate_render_state(guac_terminal_scrollbar* scrollbar,
     if (render_state->handle_height > max_handle_height)
         render_state->handle_height = max_handle_height;
 
-    /* Calculate handle position */
+    /* Calculate handle X position */
     render_state->handle_x = GUAC_TERMINAL_SCROLLBAR_PADDING;
 
+    /* Calculate handle Y range */
+    int min_handle_y = GUAC_TERMINAL_SCROLLBAR_PADDING;
+    int max_handle_y = min_handle_y + max_handle_height
+                     - render_state->handle_height;
+
+    /* Position handle relative to mouse if being dragged */
+    if (scrollbar->dragging_handle) {
+
+        int dragged_handle_y = scrollbar->drag_current_y
+                             - scrollbar->drag_offset_y;
+
+        /* Keep handle within bounds */
+        if (dragged_handle_y < min_handle_y)
+            dragged_handle_y = min_handle_y;
+        else if (dragged_handle_y > max_handle_y)
+            dragged_handle_y = max_handle_y;
+
+        render_state->handle_y = dragged_handle_y;
+
+    }
+
     /* Handle Y position is relative to current scroll value */
-    if (scroll_delta > 0)
-        render_state->handle_y = GUAC_TERMINAL_SCROLLBAR_PADDING
-            + (max_handle_height - render_state->handle_height)
-               * (scrollbar->value - scrollbar->min)
-               / scroll_delta;
+    else if (scroll_delta > 0)
+        render_state->handle_y = min_handle_y
+                               + (max_handle_y - min_handle_y)
+                                  * (scrollbar->value - scrollbar->min)
+                                  / scroll_delta;
 
     /* ... unless there is only one possible scroll value */
     else
@@ -278,3 +302,55 @@ void guac_terminal_scrollbar_parent_resized(guac_terminal_scrollbar* scrollbar,
 
 }
 
+int guac_terminal_scrollbar_handle_mouse(guac_terminal_scrollbar* scrollbar,
+        int x, int y, int mask) {
+
+    /* Get container rectangle bounds */
+    int parent_left   = scrollbar->render_state.container_x;
+    int parent_top    = scrollbar->render_state.container_y;
+    int parent_right  = parent_left + scrollbar->render_state.container_width;
+    int parent_bottom = parent_top  + scrollbar->render_state.container_height;
+
+    /* Calculate handle rectangle bounds */
+    int handle_left   = parent_left + scrollbar->render_state.handle_x;
+    int handle_top    = parent_top  + scrollbar->render_state.handle_y;
+    int handle_right  = handle_left + scrollbar->render_state.handle_width;
+    int handle_bottom = handle_top  + scrollbar->render_state.handle_height;
+
+    /* Handle click on handle */
+    if (scrollbar->dragging_handle) {
+
+        /* Update drag while mouse button is held */
+        if (mask & GUAC_CLIENT_MOUSE_LEFT) {
+            scrollbar->drag_current_y = y;
+            /* TODO: Update scrollbar value */
+        }
+
+        /* Stop drag if mouse button is released */
+        else
+            scrollbar->dragging_handle = 0;
+
+        /* Mouse event was handled by scrollbar */
+        return 1;
+
+    }
+    else if (mask == GUAC_CLIENT_MOUSE_LEFT
+            && x >= handle_left && x < handle_right
+            && y >= handle_top  && y < handle_bottom) {
+
+        /* Start drag */
+        scrollbar->dragging_handle = 1;
+        scrollbar->drag_offset_y = y - handle_top;
+        scrollbar->drag_current_y = y;
+
+        /* Mouse event was handled by scrollbar */
+        return 1;
+
+    }
+
+    /* Eat any events that occur within the scrollbar */
+    return x >= parent_left && x < parent_right
+        && y >= parent_top  && y < parent_bottom;
+
+}
+
diff --git a/src/terminal/scrollbar.h b/src/terminal/scrollbar.h
index e1bee7ff..f46a42a8 100644
--- a/src/terminal/scrollbar.h
+++ b/src/terminal/scrollbar.h
@@ -159,6 +159,24 @@ typedef struct guac_terminal_scrollbar {
      */
     guac_terminal_scrollbar_render_state render_state;
 
+    /**
+     * Whether the scrollbar handle is currently being dragged.
+     */
+    int dragging_handle;
+
+    /**
+     * The offset of the Y location of the mouse pointer when the dragging
+     * began, relative to the top of the scrollbar handle. If dragging is not
+     * in progress, this value is undefined.
+     */
+    int drag_offset_y;
+
+    /**
+     * The current Y location of the mouse pointer if dragging is in progress.
+     * If dragging is not in progress, this value is undefined.
+     */
+    int drag_current_y;
+
 } guac_terminal_scrollbar;
 
 /**
@@ -276,4 +294,29 @@ void guac_terminal_scrollbar_set_value(guac_terminal_scrollbar* scrollbar,
 void guac_terminal_scrollbar_parent_resized(guac_terminal_scrollbar* scrollbar,
         int parent_width, int parent_height, int visible_area);
 
+/**
+ * Notifies the scrollbar of the current mouse state, allowing it to update
+ * itself with respect to button state and dragging.
+ *
+ * @param scrollbar
+ *     The scrollbar to notify of the current mouse state.
+ *
+ * @param x
+ *     The X coordinate of the mouse pointer.
+ *
+ * @param y
+ *     The Y coordinate of the mouse pointer.
+ *
+ * @param mask
+ *     The button mask, where the Nth bit of the button mask represents the
+ *     pressed state of the Nth mouse button, where button 0 is the left
+ *     mouse button, button 1 is the middle button, etc.
+ *
+ * @return
+ *     Zero if the mouse event was not handled by the scrollbar, non-zero
+ *     otherwise.
+ */
+int guac_terminal_scrollbar_handle_mouse(guac_terminal_scrollbar* scrollbar,
+        int x, int y, int mask);
+
 #endif
diff --git a/src/terminal/terminal.c b/src/terminal/terminal.c
index 7a1a9160..3c2f7f92 100644
--- a/src/terminal/terminal.c
+++ b/src/terminal/terminal.c
@@ -1379,17 +1379,28 @@ int guac_terminal_send_key(guac_terminal* term, int keysym, int pressed) {
 
 static int __guac_terminal_send_mouse(guac_terminal* term, int x, int y, int mask) {
 
+    guac_client* client = term->client;
+    guac_socket* socket = client->socket;
+
     /* Determine which buttons were just released and pressed */
     int released_mask =  term->mouse_mask & ~mask;
     int pressed_mask  = ~term->mouse_mask &  mask;
 
+    /* Notify scrollbar, do not handle anything handled by scrollbar */
+    if (guac_terminal_scrollbar_handle_mouse(term->scrollbar, x, y, mask)) {
+        guac_terminal_scrollbar_flush(term->scrollbar);
+        guac_protocol_send_sync(socket, client->last_sent_timestamp);
+        guac_socket_flush(socket);
+        return 0;
+    }
+
     term->mouse_mask = mask;
 
     /* Show mouse cursor if not already shown */
     if (term->current_cursor != term->ibar_cursor) {
         term->current_cursor = term->ibar_cursor;
-        guac_terminal_set_cursor(term->client, term->ibar_cursor);
-        guac_socket_flush(term->client->socket);
+        guac_terminal_set_cursor(client, term->ibar_cursor);
+        guac_socket_flush(socket);
     }
 
     /* Paste contents of clipboard on right or middle mouse button up */
@@ -1417,8 +1428,8 @@ static int __guac_terminal_send_mouse(guac_terminal* term, int x, int y, int mas
             free(string);
 
             /* Send data */
-            guac_common_clipboard_send(term->clipboard, term->client);
-            guac_socket_flush(term->client->socket);
+            guac_common_clipboard_send(term->clipboard, client);
+            guac_socket_flush(socket);
 
         }