diff --git a/docs/changelog.rst b/docs/changelog.rst
index cf26dac77..54ece9452 100644
--- a/docs/changelog.rst
+++ b/docs/changelog.rst
@@ -19,6 +19,10 @@ To update |kitty|, :doc:`follow the instructions <binary>`.
 - New options :opt:`cursor_beam_thickness` and :opt:`cursor_underline_thickness` to control the thickness of the
   beam and underline cursors (:iss:`2337` and :pull:`2342`)
 
+- When the application running in the terminal grabs the mouse, pass middle
+  clicks to the application unless :opt:`terminal_select_modifiers` are
+  pressed (:iss:`2368`)
+
 - X11: Fix arrow mouse cursor using right pointing instead of the default left
   pointing arrow (:iss:`2341`)
 
diff --git a/kitty/mouse.c b/kitty/mouse.c
index cfc281c0c..0eaa47fed 100644
--- a/kitty/mouse.c
+++ b/kitty/mouse.c
@@ -402,7 +402,7 @@ handle_button_event_in_kitty(Window *w, int button, int modifiers, bool is_relea
             } else add_click(w, button, modifiers, 0);
             break;
         case GLFW_MOUSE_BUTTON_MIDDLE:
-            if (is_release && !modifiers) { call_boss(paste_from_selection, NULL); return; }
+            if (is_release) { call_boss(paste_from_selection, NULL); return; }
             break;
         case GLFW_MOUSE_BUTTON_RIGHT:
             if (is_release) { extend_selection(w); }
@@ -418,10 +418,10 @@ HANDLER(handle_button_event) {
     }
     Screen *screen = w->render_data.screen;
     if (!screen) return;
+    const int ts1 = OPT(terminal_select_modifiers), ts2 = OPT(terminal_select_modifiers) | OPT(rectangle_select_modifiers);
     bool handle_in_kitty = (
-            modifiers == (int)OPT(terminal_select_modifiers) || modifiers == ((int)OPT(rectangle_select_modifiers) | (int)OPT(terminal_select_modifiers)) ||
+            modifiers == ts1 || modifiers == ts2 ||
             screen->modes.mouse_tracking_mode == 0 ||
-            button == GLFW_MOUSE_BUTTON_MIDDLE ||
             (modifiers == (int)OPT(open_url_modifiers) && button == GLFW_MOUSE_BUTTON_LEFT)
         );
     if (handle_in_kitty) handle_button_event_in_kitty(w, button, modifiers, is_release);