diff --git a/layout/xul/base/src/nsMenuPopupFrame.cpp b/layout/xul/base/src/nsMenuPopupFrame.cpp
index c4985720117d..9141d12ebbbf 100644
--- a/layout/xul/base/src/nsMenuPopupFrame.cpp
+++ b/layout/xul/base/src/nsMenuPopupFrame.cpp
@@ -981,9 +981,6 @@ nsMenuPopupFrame::SetPopupPosition(nsIFrame* aAnchorFrame)
            parentViewWidgetOffset.x - parentPos.x;
     ypos = screenViewLocY - presContext->DevPixelsToAppUnits(screenParentWidgetRect.y) -
            parentViewWidgetOffset.y - parentPos.y;
-
-    // once the popup is positioned on screen, it doesn't need to be positioned again
-    mShouldAutoPosition = PR_FALSE;
   }
 
   // Compute info about the screen dimensions. Because of multiple monitor systems,
diff --git a/toolkit/content/tests/chrome/Makefile.in b/toolkit/content/tests/chrome/Makefile.in
index 342bbabb45cf..72a458f93184 100644
--- a/toolkit/content/tests/chrome/Makefile.in
+++ b/toolkit/content/tests/chrome/Makefile.in
@@ -56,6 +56,8 @@ _TEST_FILES = 	bug288254_window.xul \
 		test_bug331215.xul \
 		test_popup_preventdefault_chrome.xul \
 		window_popup_preventdefault_chrome.xul \
+		test_largemenu.xul \
+		window_largemenu.xul \
 		$(NULL)
 
 libs:: $(_TEST_FILES)
diff --git a/toolkit/content/tests/chrome/test_largemenu.xul b/toolkit/content/tests/chrome/test_largemenu.xul
new file mode 100644
index 000000000000..fcc8927446fa
--- /dev/null
+++ b/toolkit/content/tests/chrome/test_largemenu.xul
@@ -0,0 +1,33 @@
+<?xml version="1.0"?>
+<?xml-stylesheet href="chrome://global/skin" type="text/css"?>
+<?xml-stylesheet href="chrome://mochikit/content/tests/SimpleTest/test.css" type="text/css"?>
+
+<window title="Large Menu Tests"
+  onload="setTimeout(runTest, 0);"
+  xmlns:html="http://www.w3.org/1999/xhtml"
+  xmlns="http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul">
+
+  <title>Large Menu Tests</title>
+  <script type="application/javascript" 
+          src="chrome://mochikit/content/MochiKit/packed.js"/>
+  <script type="application/javascript"
+          src="chrome://mochikit/content/tests/SimpleTest/SimpleTest.js"/>
+
+<script>
+SimpleTest.waitForExplicitFinish();
+function runTest()
+{
+  window.open("window_largemenu.xul", "_new", "chrome,width=200,height=200");
+}
+</script>
+
+<body xmlns="http://www.w3.org/1999/xhtml">
+<p id="display">
+</p>
+<div id="content" style="display: none">
+</div>
+<pre id="test">
+</pre>
+</body>
+
+</window>
diff --git a/toolkit/content/tests/chrome/window_largemenu.xul b/toolkit/content/tests/chrome/window_largemenu.xul
new file mode 100644
index 000000000000..986a2a47885a
--- /dev/null
+++ b/toolkit/content/tests/chrome/window_largemenu.xul
@@ -0,0 +1,140 @@
+<?xml version="1.0"?>
+<?xml-stylesheet href="chrome://global/skin" type="text/css"?>
+
+<window title="Large Menu Tests"
+  onfocus="setTimeout(runTests, 0);"
+  xmlns="http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul">
+
+  <title>Large Menu Tests</title>
+
+  <script type="application/javascript"
+          src="chrome://mochikit/content/tests/SimpleTest/EventUtils.js"/>
+
+<!--
+  This test checks that a large menu is displayed with arrow buttons
+  and is on the screen.
+  -->
+
+<script>
+<![CDATA[
+
+var gOverflowed = false, gUnderflowed = false;
+var gScreenY = -1;
+var gTestIndex = 0;
+var gTests = ["open normal", "open flipped position", "open with scrolling", "open small again"];
+
+function runTests()
+{
+  var mouseFn = function(event) { gScreenY = event.screenY; }
+
+  // a hacky way to get the screen position of the document
+  window.addEventListener("mousedown", mouseFn, false);
+  synthesizeMouse(document.documentElement, 0, 0, { });
+  window.removeEventListener("mousedown", mouseFn, false);
+
+  nextTest();
+}
+
+function nextTest()
+{
+  gOverflowed = false, gUnderflowed = false;
+
+  var y = screen.height;
+  if (gTestIndex == 1) // open flipped position test:
+    y -= 100;
+  else
+    y /= 2;
+
+  var popup = document.getElementById("popup");
+  if (gTestIndex == 2) {
+    // add some more menuitems so that scrolling will be necessary
+    for (var t = 1; t <= 30; t++) {
+      var menu = document.createElement("menuitem");
+      menu.setAttribute("label", "More" + t);
+      popup.appendChild(menu);
+    }
+  }
+  else if (gTestIndex == 3) {
+    for (var t = 1; t <= 30; t++)
+      popup.removeChild(popup.lastChild);
+  }
+
+  popup.openPopupAtScreen(100, y, false);
+}
+
+function popupShown()
+{
+  var popup = document.getElementById("popup");
+  var rect = popup.getBoundingClientRect();
+  if (gTestIndex == 0) {
+    // the popup should be in the center of the screen 
+    is(Math.round(rect.top) + gScreenY, screen.height / 2,
+                              gTests[gTestIndex] + " top");
+    ok(Math.round(rect.bottom) + gScreenY < screen.height,
+                                gTests[gTestIndex] + " bottom");
+    ok(!gOverflowed && !gUnderflowed, gTests[gTestIndex] + " overflow")
+  }
+  else if (gTestIndex == 1) {
+    // the popup was supposed to open 100 pixels from the bottom, but that
+    // would put it off screen so it should be flipped to have it's bottom
+    // edge 100 pixels from the bottom
+    ok(Math.round(rect.top) > screen.top, gTests[gTestIndex] + " top");
+    is(Math.round(rect.bottom) + gScreenY, screen.height - 100,
+                                gTests[gTestIndex] + " bottom");
+    ok(!gOverflowed && !gUnderflowed, gTests[gTestIndex] + " overflow")
+  }
+  else if (gTestIndex == 2) {
+    // the popup is too large so ensure that it is on screen
+    ok(Math.round(rect.top) > screen.top, gTests[gTestIndex] + " top");
+    ok(Math.round(rect.bottom) < screen.height, gTests[gTestIndex] + " bottom");
+    ok(gOverflowed && !gUnderflowed, gTests[gTestIndex] + " overflow")
+  }
+  else if (gTestIndex == 3) {
+    is(Math.round(rect.top) + gScreenY, screen.height / 2,
+                              gTests[gTestIndex] + " top");
+    ok(Math.round(rect.bottom) + gScreenY < screen.height,
+                                gTests[gTestIndex] + " bottom");
+    ok(!gOverflowed && gUnderflowed, gTests[gTestIndex] + " overflow")
+  }
+
+  popup.hidePopup();
+}
+
+function is(l, r, n) { window.opener.wrappedJSObject.SimpleTest.is(l,r,n); }
+function ok(v, n) { window.opener.wrappedJSObject.SimpleTest.ok(v,n); }
+
+function popupHidden()
+{
+  gTestIndex++;
+  if (gTestIndex == gTests.length) {
+    window.opener.wrappedJSObject.SimpleTest.finish();
+    window.close();
+  }
+  else {
+    nextTest();
+  }
+}
+]]>
+</script>
+
+<label value="OK" popup="popup"/>
+<menupopup id="popup" onpopupshown="popupShown();" onpopuphidden="popupHidden();"
+                      onoverflow="gOverflowed = true" onunderflow="gUnderflowed = true;">
+  <menuitem label="1"/>
+  <menuitem label="2"/>
+  <menuitem label="3"/>
+  <menuitem label="4"/>
+  <menuitem label="5"/>
+  <menuitem label="6"/>
+  <menuitem label="7"/>
+  <menuitem label="8"/>
+  <menuitem label="9"/>
+  <menuitem label="10"/>
+  <menuitem label="11"/>
+  <menuitem label="12"/>
+  <menuitem label="13"/>
+  <menuitem label="14"/>
+  <menuitem label="15"/>
+</menupopup>
+
+</window>
