diff --git a/include/wx/osx/cocoa/private/overlay.h b/include/wx/osx/cocoa/private/overlay.h
index 5a49e8104e..71aee2adeb 100644
--- a/include/wx/osx/cocoa/private/overlay.h
+++ b/include/wx/osx/cocoa/private/overlay.h
@@ -38,7 +38,7 @@ public:
     void Clear( wxDC* dc);
 
 private:
-    void CreateOverlayWindow();
+    void CreateOverlayWindow( wxDC* dc );
 
     WXWindow m_overlayWindow;
     WXWindow m_overlayParentWindow;
diff --git a/src/osx/cocoa/overlay.mm b/src/osx/cocoa/overlay.mm
index 55c6c09dd2..4e7697edc2 100644
--- a/src/osx/cocoa/overlay.mm
+++ b/src/osx/cocoa/overlay.mm
@@ -56,49 +56,47 @@ bool wxOverlayImpl::IsOk()
     return m_overlayWindow != NULL ;
 }
 
-void wxOverlayImpl::CreateOverlayWindow()
+void wxOverlayImpl::CreateOverlayWindow( wxDC* dc )
 {
-    if ( m_window )
+    if (m_window)
     {
         m_overlayParentWindow = m_window->MacGetTopLevelWindowRef();
         [m_overlayParentWindow makeKeyAndOrderFront:nil];
-        
-        NSView* view = m_window->GetHandle();
 
-        NSPoint viewOriginBase, viewOriginScreen;
-        viewOriginBase = [view convertPoint:NSMakePoint(0, 0) toView:nil];
-        viewOriginScreen = [m_overlayParentWindow convertBaseToScreen:viewOriginBase];
-        
-        NSSize viewSize = [view frame].size;
-        if ( [view isFlipped] )
-            viewOriginScreen.y -= viewSize.height;
-        
-        m_overlayWindow=[[NSWindow alloc] initWithContentRect:NSMakeRect(viewOriginScreen.x,viewOriginScreen.y,
-                                                                         viewSize.width,
-                                                                         viewSize.height) 
-                                                    styleMask:NSBorderlessWindowMask 
-                                                      backing:NSBackingStoreBuffered 
-                                                        defer:YES];
-        
+        wxPoint origin(m_x, m_y);
+        if (!dc->IsKindOf(CLASSINFO(wxClientDC)))
+            origin -= m_window->GetClientAreaOrigin();
+
+        origin = m_window->ClientToScreen(origin);
+
+        wxSize size(m_width, m_height);
+        NSRect overlayRect = wxToNSRect(NULL, wxRect(origin, size));
+        overlayRect = [NSWindow contentRectForFrameRect:overlayRect styleMask:NSBorderlessWindowMask];
+
+        m_overlayWindow = [[NSWindow alloc] initWithContentRect:overlayRect
+                                                      styleMask:NSBorderlessWindowMask
+                                                        backing:NSBackingStoreBuffered
+                                                          defer:YES];
         [m_overlayParentWindow addChildWindow:m_overlayWindow ordered:NSWindowAbove];
     }
     else
     {
-        m_overlayParentWindow = NULL ;
-        CGRect cgbounds ;
+        m_overlayParentWindow = NULL;
+        CGRect cgbounds;
         cgbounds = CGDisplayBounds(CGMainDisplayID());
- 
-        m_overlayWindow=[[NSWindow alloc] initWithContentRect:NSMakeRect(cgbounds.origin.x,cgbounds.origin.y,
-                                                                       cgbounds.size.width,
-                                                                       cgbounds.size.height) 
-                                                  styleMask:NSBorderlessWindowMask 
-                                                    backing:NSBackingStoreBuffered 
-                                                      defer:YES];
+
+        m_overlayWindow = [[NSWindow alloc] initWithContentRect:NSMakeRect(cgbounds.origin.x, cgbounds.origin.y,
+                                                                    cgbounds.size.width,
+                                                                    cgbounds.size.height)
+                                                      styleMask:NSBorderlessWindowMask
+                                                        backing:NSBackingStoreBuffered
+                                                          defer:YES];
     }
     [m_overlayWindow setOpaque:NO];
     [m_overlayWindow setIgnoresMouseEvents:YES];
+    [m_overlayWindow setBackgroundColor:[NSColor clearColor]];
     [m_overlayWindow setAlphaValue:1.0];
-    
+
     [m_overlayWindow orderFront:nil];
 }
 
@@ -109,39 +107,28 @@ void wxOverlayImpl::Init( wxDC* dc, int x , int y , int width , int height )
     m_window = dc->GetWindow();
     m_x = x ;
     m_y = y ;
-    if ( dc->IsKindOf( CLASSINFO( wxClientDC ) ))
-    {
-        wxPoint origin = m_window->GetClientAreaOrigin();
-        m_x += origin.x;
-        m_y += origin.y;
-    }
     m_width = width ;
     m_height = height ;
 
-    CreateOverlayWindow();
-    wxASSERT_MSG(  m_overlayWindow != NULL , _("Couldn't create the overlay window") );
+    CreateOverlayWindow(dc);
+    wxASSERT_MSG(m_overlayWindow != NULL, _("Couldn't create the overlay window"));
     m_overlayContext = (CGContextRef) [[m_overlayWindow graphicsContext] graphicsPort];
     wxASSERT_MSG(  m_overlayContext != NULL , _("Couldn't init the context on the overlay window") );
-
+    
     int ySize = 0;
     if ( m_window )
     {
-        NSView* view = m_window->GetHandle();    
-        NSSize viewSize = [view frame].size;
-        ySize = viewSize.height;
+        ySize = m_height;
     }
     else
     {
         CGRect cgbounds ;
         cgbounds = CGDisplayBounds(CGMainDisplayID());
         ySize = cgbounds.size.height;
-        
-        
-        
     }
-    CGContextTranslateCTM( m_overlayContext, 0, ySize );
-    CGContextScaleCTM( m_overlayContext, 1, -1 );
-    CGContextTranslateCTM( m_overlayContext, -m_x , -m_y );
+
+    CGContextTranslateCTM(m_overlayContext, 0, ySize);
+    CGContextScaleCTM(m_overlayContext, 1, -1);
 }
 
 void wxOverlayImpl::BeginDrawing( wxDC* dc)
@@ -151,7 +138,9 @@ void wxOverlayImpl::BeginDrawing( wxDC* dc)
     if (win_impl)
     {
         win_impl->SetGraphicsContext( wxGraphicsContext::CreateFromNative( m_overlayContext ) );
-        dc->SetClippingRegion( m_x , m_y , m_width , m_height ) ;
+        if (m_window)
+            dc->SetDeviceOrigin(dc->LogicalToDeviceX(-m_x), dc->LogicalToDeviceY(-m_y));
+        dc->SetClippingRegion(m_x, m_y, m_width, m_height);
     }
 }
 
@@ -165,11 +154,11 @@ void wxOverlayImpl::EndDrawing( wxDC* dc)
     CGContextFlush( m_overlayContext );
 }
 
-void wxOverlayImpl::Clear(wxDC* WXUNUSED(dc))
+void wxOverlayImpl::Clear(wxDC* dc)
 {
     wxASSERT_MSG( IsOk() , _("You cannot Clear an overlay that is not inited") );
-    CGRect box  = CGRectMake( m_x - 1, m_y - 1 , m_width + 2 , m_height + 2 );
-    CGContextClearRect( m_overlayContext, box );
+
+    dc->GetGraphicsContext()->ClearRectangle(m_x - 1, m_y - 1, m_width + 2, m_height + 2);
 }
 
 void wxOverlayImpl::Reset()