diff --git a/backend/drm/drm.c b/backend/drm/drm.c
index e8ed7316..30be40ea 100644
--- a/backend/drm/drm.c
+++ b/backend/drm/drm.c
@@ -538,7 +538,8 @@ static void drm_connector_transform(struct wlr_output *output,
 }
 
 static bool drm_connector_set_cursor(struct wlr_output *output,
-		struct wlr_texture *texture, int32_t hotspot_x, int32_t hotspot_y,
+		struct wlr_texture *texture, int32_t scale,
+		enum wl_output_transform transform, int32_t hotspot_x, int32_t hotspot_y,
 		bool update_texture) {
 	struct wlr_drm_connector *conn = (struct wlr_drm_connector *)output;
 	struct wlr_drm_backend *drm = (struct wlr_drm_backend *)output->backend;
@@ -581,15 +582,12 @@ static bool drm_connector_set_cursor(struct wlr_output *output,
 			return false;
 		}
 
-		enum wl_output_transform transform = output->transform;
 		wlr_matrix_projection(plane->matrix, plane->surf.width,
-			plane->surf.height, transform);
+			plane->surf.height, output->transform);
 	}
 
 	struct wlr_box hotspot = { .x = hotspot_x, .y = hotspot_y };
-	enum wl_output_transform transform =
-		wlr_output_transform_invert(output->transform);
-	wlr_box_transform(&hotspot, transform,
+	wlr_box_transform(&hotspot, wlr_output_transform_invert(output->transform),
 		plane->surf.width, plane->surf.height, &hotspot);
 
 	if (plane->cursor_hotspot_x != hotspot.x ||
@@ -617,6 +615,8 @@ static bool drm_connector_set_cursor(struct wlr_output *output,
 	if (texture != NULL) {
 		int width, height;
 		wlr_texture_get_size(texture, &width, &height);
+		width = width * output->scale / scale;
+		height = height * output->scale / scale;
 
 		if (width > (int)plane->surf.width || height > (int)plane->surf.height) {
 			wlr_log(L_ERROR, "Cursor too large (max %dx%d)",
@@ -639,9 +639,14 @@ static bool drm_connector_set_cursor(struct wlr_output *output,
 
 		struct wlr_renderer *rend = plane->surf.renderer->wlr_rend;
 
+		struct wlr_box cursor_box = { .width = width, .height = height };
+
+		float matrix[9];
+		wlr_matrix_project_box(matrix, &cursor_box, transform, 0, plane->matrix);
+
 		wlr_renderer_begin(rend, plane->surf.width, plane->surf.height);
 		wlr_renderer_clear(rend, (float[]){ 0.0, 0.0, 0.0, 0.0 });
-		wlr_render_texture(rend, texture, plane->matrix, 0, 0, 1.0f);
+		wlr_render_texture_with_matrix(rend, texture, matrix, 1.0);
 		wlr_renderer_end(rend);
 
 		wlr_renderer_read_pixels(rend, WL_SHM_FORMAT_ARGB8888, bo_stride,
diff --git a/backend/wayland/output.c b/backend/wayland/output.c
index c498fc4e..109834c9 100644
--- a/backend/wayland/output.c
+++ b/backend/wayland/output.c
@@ -72,16 +72,20 @@ static void output_transform(struct wlr_output *_output,
 	output->wlr_output.transform = transform;
 }
 
-static bool output_set_cursor(struct wlr_output *_output,
-		struct wlr_texture *texture, int32_t hotspot_x, int32_t hotspot_y,
+static bool output_set_cursor(struct wlr_output *wlr_output,
+		struct wlr_texture *texture, int32_t scale,
+		enum wl_output_transform transform, int32_t hotspot_x, int32_t hotspot_y,
 		bool update_texture) {
-	struct wlr_wl_output *output =
-		(struct wlr_wl_output *)_output;
+	struct wlr_wl_output *output = (struct wlr_wl_output *)wlr_output;
 	struct wlr_wl_backend *backend = output->backend;
 
+	struct wlr_box hotspot = { .x = hotspot_x, .y = hotspot_y };
+	wlr_box_transform(&hotspot, wlr_output_transform_invert(wlr_output->transform),
+		output->cursor.width, output->cursor.height, &hotspot);
+
 	// TODO: use output->wlr_output.transform to transform pixels and hotpot
-	output->cursor.hotspot_x = hotspot_x;
-	output->cursor.hotspot_y = hotspot_y;
+	output->cursor.hotspot_x = hotspot.x;
+	output->cursor.hotspot_y = hotspot.y;
 
 	if (!update_texture) {
 		// Update hotspot without changing cursor image
@@ -98,6 +102,11 @@ static bool output_set_cursor(struct wlr_output *_output,
 	if (texture != NULL) {
 		int width, height;
 		wlr_texture_get_size(texture, &width, &height);
+		width = width * wlr_output->scale / scale;
+		height = height * wlr_output->scale / scale;
+
+		output->cursor.width = width;
+		output->cursor.height = height;
 
 		if (output->cursor.egl_window == NULL) {
 			output->cursor.egl_window =
@@ -110,12 +119,20 @@ static bool output_set_cursor(struct wlr_output *_output,
 
 		wlr_egl_make_current(&backend->egl, egl_surface, NULL);
 
+		struct wlr_box cursor_box = {
+			.width = width,
+			.height = height,
+		};
+
+		float projection[9];
+		wlr_matrix_projection(projection, width, height, wlr_output->transform);
+
 		float matrix[9];
-		wlr_matrix_projection(matrix, width, height, WL_OUTPUT_TRANSFORM_NORMAL);
+		wlr_matrix_project_box(matrix, &cursor_box, transform, 0, projection);
 
 		wlr_renderer_begin(backend->renderer, width, height);
 		wlr_renderer_clear(backend->renderer, (float[]){ 0.0, 0.0, 0.0, 0.0 });
-		wlr_render_texture(backend->renderer, texture, matrix, 0, 0, 1.0);
+		wlr_render_texture_with_matrix(backend->renderer, texture, matrix, 1.0);
 		wlr_renderer_end(backend->renderer);
 
 		wlr_egl_swap_buffers(&backend->egl, egl_surface, NULL);
diff --git a/include/backend/wayland.h b/include/backend/wayland.h
index fec328ba..fda27da9 100644
--- a/include/backend/wayland.h
+++ b/include/backend/wayland.h
@@ -55,6 +55,7 @@ struct wlr_wl_output {
 		struct wl_surface *surface;
 		struct wl_egl_window *egl_window;
 		int32_t hotspot_x, hotspot_y;
+		int32_t width, height;
 	} cursor;
 };
 
diff --git a/include/wlr/interfaces/wlr_output.h b/include/wlr/interfaces/wlr_output.h
index d8c54067..7ecc7551 100644
--- a/include/wlr/interfaces/wlr_output.h
+++ b/include/wlr/interfaces/wlr_output.h
@@ -14,6 +14,7 @@ struct wlr_output_impl {
 	void (*transform)(struct wlr_output *output,
 		enum wl_output_transform transform);
 	bool (*set_cursor)(struct wlr_output *output, struct wlr_texture *texture,
+		int32_t scale, enum wl_output_transform transform,
 		int32_t hotspot_x, int32_t hotspot_y, bool update_texture);
 	bool (*move_cursor)(struct wlr_output *output, int x, int y);
 	void (*destroy)(struct wlr_output *output);
diff --git a/types/wlr_output.c b/types/wlr_output.c
index 0973fbc7..350538a7 100644
--- a/types/wlr_output.c
+++ b/types/wlr_output.c
@@ -695,9 +695,13 @@ static void output_cursor_update_visible(struct wlr_output_cursor *cursor) {
 }
 
 static bool output_cursor_attempt_hardware(struct wlr_output_cursor *cursor) {
+	int32_t scale = cursor->output->scale;
+	enum wl_output_transform transform = WL_OUTPUT_TRANSFORM_NORMAL;
 	struct wlr_texture *texture = cursor->texture;
 	if (cursor->surface != NULL) {
 		texture = cursor->surface->texture;
+		scale = cursor->surface->current->scale;
+		transform = cursor->surface->current->transform;
 	}
 
 	struct wlr_output_cursor *hwcur = cursor->output->hardware_cursor;
@@ -708,7 +712,7 @@ static bool output_cursor_attempt_hardware(struct wlr_output_cursor *cursor) {
 				(int)cursor->x, (int)cursor->y);
 		}
 		if (cursor->output->impl->set_cursor(cursor->output, texture,
-				cursor->hotspot_x, cursor->hotspot_y, true)) {
+				scale, transform, cursor->hotspot_x, cursor->hotspot_y, true)) {
 			cursor->output->hardware_cursor = cursor;
 			return true;
 		}
@@ -810,7 +814,7 @@ void wlr_output_cursor_set_surface(struct wlr_output_cursor *cursor,
 		} else {
 			assert(cursor->output->impl->set_cursor);
 			cursor->output->impl->set_cursor(cursor->output, NULL,
-				hotspot_x, hotspot_y, false);
+				1, WL_OUTPUT_TRANSFORM_NORMAL, hotspot_x, hotspot_y, false);
 		}
 		return;
 	}
@@ -835,7 +839,8 @@ void wlr_output_cursor_set_surface(struct wlr_output_cursor *cursor,
 
 		if (cursor->output->hardware_cursor == cursor) {
 			assert(cursor->output->impl->set_cursor);
-			cursor->output->impl->set_cursor(cursor->output, NULL, 0, 0, true);
+			cursor->output->impl->set_cursor(cursor->output, NULL, 1,
+				WL_OUTPUT_TRANSFORM_NORMAL, 0, 0, true);
 		}
 	}
 }
@@ -897,7 +902,8 @@ void wlr_output_cursor_destroy(struct wlr_output_cursor *cursor) {
 	if (cursor->output->hardware_cursor == cursor) {
 		// If this cursor was the hardware cursor, disable it
 		if (cursor->output->impl->set_cursor) {
-			cursor->output->impl->set_cursor(cursor->output, NULL, 0, 0, true);
+			cursor->output->impl->set_cursor(cursor->output, NULL, 1,
+				WL_OUTPUT_TRANSFORM_NORMAL, 0, 0, true);
 		}
 		cursor->output->hardware_cursor = NULL;
 	}