diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1b042b95..7a9beb7f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 - Secondary device attributes escape (`CSI > 0 c`)
 
+### Changed
+
+- Cursors are now inverted when their fixed color is similar to the cell's background
+
 ## 0.5.0-dev
 
 ### Packaging
diff --git a/alacritty_terminal/src/term/color.rs b/alacritty_terminal/src/term/color.rs
index 9aeb7061..fc35952b 100644
--- a/alacritty_terminal/src/term/color.rs
+++ b/alacritty_terminal/src/term/color.rs
@@ -25,6 +25,42 @@ pub struct Rgb {
     pub b: u8,
 }
 
+impl Rgb {
+    /// Implementation of W3C's luminance algorithm:
+    /// https://www.w3.org/TR/WCAG20/#relativeluminancedef
+    fn luminance(self) -> f64 {
+        let channel_luminance = |channel| {
+            let channel = channel as f64 / 255.;
+            if channel <= 0.03928 {
+                channel / 12.92
+            } else {
+                f64::powf((channel + 0.055) / 1.055, 2.4)
+            }
+        };
+
+        let r_luminance = channel_luminance(self.r);
+        let g_luminance = channel_luminance(self.g);
+        let b_luminance = channel_luminance(self.b);
+
+        0.2126 * r_luminance + 0.7152 * g_luminance + 0.0722 * b_luminance
+    }
+
+    /// Implementation of W3C's contrast algorithm:
+    /// https://www.w3.org/TR/WCAG20/#contrast-ratiodef
+    pub fn contrast(self, other: Rgb) -> f64 {
+        let self_luminance = self.luminance();
+        let other_luminance = other.luminance();
+
+        let (darker, lighter) = if self_luminance > other_luminance {
+            (other_luminance, self_luminance)
+        } else {
+            (self_luminance, other_luminance)
+        };
+
+        (lighter + 0.05) / (darker + 0.05)
+    }
+}
+
 // A multiply function for Rgb, as the default dim is just *2/3.
 impl Mul<f32> for Rgb {
     type Output = Rgb;
@@ -370,3 +406,28 @@ impl IndexMut<u8> for List {
         &mut self.0[idx as usize]
     }
 }
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    use std::f64::EPSILON;
+
+    #[test]
+    fn contrast() {
+        let rgb1 = Rgb { r: 0xff, g: 0xff, b: 0xff };
+        let rgb2 = Rgb { r: 0x00, g: 0x00, b: 0x00 };
+        assert!((rgb1.contrast(rgb2) - 21.).abs() < EPSILON);
+
+        let rgb1 = Rgb { r: 0xff, g: 0xff, b: 0xff };
+        assert!((rgb1.contrast(rgb1) - 1.).abs() < EPSILON);
+
+        let rgb1 = Rgb { r: 0xff, g: 0x00, b: 0xff };
+        let rgb2 = Rgb { r: 0x00, g: 0xff, b: 0x00 };
+        assert!((rgb1.contrast(rgb2) - 2.285_543_608_124_253_3).abs() < EPSILON);
+
+        let rgb1 = Rgb { r: 0x12, g: 0x34, b: 0x56 };
+        let rgb2 = Rgb { r: 0xfe, g: 0xdc, b: 0xba };
+        assert!((rgb1.contrast(rgb2) - 9.786_558_997_257_74).abs() < EPSILON);
+    }
+}
diff --git a/alacritty_terminal/src/term/mod.rs b/alacritty_terminal/src/term/mod.rs
index f27852de..7d00961e 100644
--- a/alacritty_terminal/src/term/mod.rs
+++ b/alacritty_terminal/src/term/mod.rs
@@ -31,6 +31,9 @@ mod search;
 /// Max size of the window title stack.
 const TITLE_STACK_MAX_DEPTH: usize = 4096;
 
+/// Minimum contrast between a fixed cursor color and the cell's background.
+const MIN_CURSOR_CONTRAST: f64 = 1.5;
+
 /// Maximum number of linewraps followed outside of the viewport during search highlighting.
 const MAX_SEARCH_LINES: usize = 100;
 
@@ -389,13 +392,19 @@ impl<'a, C> Iterator for RenderableCellsIter<'a, C> {
             if self.cursor.point.line == self.inner.line()
                 && self.cursor.point.col == self.inner.column()
             {
-                // Handle cell below cursor.
                 if self.cursor.rendered {
+                    // Handle cell below cursor.
                     let cell = self.inner.next()?;
                     let mut cell = RenderableCell::new(self, cell);
 
                     if self.cursor.key.style == CursorStyle::Block {
-                        cell.fg = self.cursor.text_color.color(cell.fg, cell.bg);
+                        // Invert cursor if static background is close to the cell's background.
+                        match self.cursor.cursor_color {
+                            CellRgb::Rgb(col) if col.contrast(cell.bg) >= MIN_CURSOR_CONTRAST => {
+                                cell.fg = self.cursor.text_color.color(cell.fg, cell.bg);
+                            },
+                            _ => cell.fg = cell.bg,
+                        }
                     }
 
                     return Some(cell);
@@ -412,7 +421,13 @@ impl<'a, C> Iterator for RenderableCellsIter<'a, C> {
 
                     let mut cell = RenderableCell::new(self, cell);
                     cell.inner = RenderableCellContent::Cursor(self.cursor.key);
-                    cell.fg = self.cursor.cursor_color.color(cell.fg, cell.bg);
+
+                    // Only apply static color if it isn't close to the cell's current background.
+                    if let CellRgb::Rgb(color) = self.cursor.cursor_color {
+                        if color.contrast(cell.bg) >= MIN_CURSOR_CONTRAST {
+                            cell.fg = self.cursor.cursor_color.color(cell.fg, cell.bg);
+                        }
+                    }
 
                     return Some(cell);
                 }