diff --git a/src/PIL/GifImagePlugin.py b/src/PIL/GifImagePlugin.py
index 7c083bd8b..131aa939e 100644
--- a/src/PIL/GifImagePlugin.py
+++ b/src/PIL/GifImagePlugin.py
@@ -251,7 +251,7 @@ class GifImageFile(ImageFile.ImageFile):
                 bits = self.fp.read(1)[0]
                 self.__offset = self.fp.tell()
                 self.tile = [
-                    ("gif", (x0, y0, x1, y1), self.__offset, (bits, interlace))
+                    ("gif", (x0, y0, x1, y1), self.__offset, (bits, interlace, -1))
                 ]
                 break
 
diff --git a/src/decode.c b/src/decode.c
index 5d64bd0b9..a29c6a46e 100644
--- a/src/decode.c
+++ b/src/decode.c
@@ -430,7 +430,8 @@ PyImaging_GifDecoderNew(PyObject *self, PyObject *args) {
     char *mode;
     int bits = 8;
     int interlace = 0;
-    if (!PyArg_ParseTuple(args, "s|ii", &mode, &bits, &interlace)) {
+    int transparency = -1;
+    if (!PyArg_ParseTuple(args, "s|iii", &mode, &bits, &interlace, &transparency)) {
         return NULL;
     }
 
@@ -448,6 +449,7 @@ PyImaging_GifDecoderNew(PyObject *self, PyObject *args) {
 
     ((GIFDECODERSTATE *)decoder->state.context)->bits = bits;
     ((GIFDECODERSTATE *)decoder->state.context)->interlace = interlace;
+    ((GIFDECODERSTATE *)decoder->state.context)->transparency = transparency;
 
     return (PyObject *)decoder;
 }
diff --git a/src/libImaging/Gif.h b/src/libImaging/Gif.h
index a85ce2b6e..0f44df795 100644
--- a/src/libImaging/Gif.h
+++ b/src/libImaging/Gif.h
@@ -30,6 +30,9 @@ typedef struct {
      */
     int interlace;
 
+    /* The transparent palette index, or -1 for no transparency. */
+    int transparency;
+
     /* PRIVATE CONTEXT (set by decoder) */
 
     /* Interlace parameters */
diff --git a/src/libImaging/GifDecode.c b/src/libImaging/GifDecode.c
index 88ae3896c..5392198da 100644
--- a/src/libImaging/GifDecode.c
+++ b/src/libImaging/GifDecode.c
@@ -248,29 +248,33 @@ ImagingGifDecode(Imaging im, ImagingCodecState state, UINT8 *buffer, Py_ssize_t
         /* To squeeze some extra pixels out of this loop, we test for
            some common cases and handle them separately. */
 
-        /* FIXME: should we handle the transparency index in here??? */
-
-        if (i == 1) {
-            if (state->x < state->xsize - 1) {
-                /* Single pixel, not at the end of the line. */
-                *out++ = p[0];
-                state->x++;
+        /* If we have transparency, we need to use the regular loop. */
+        if (context->transparency == -1) {
+            if (i == 1) {
+                if (state->x < state->xsize - 1) {
+                    /* Single pixel, not at the end of the line. */
+                    *out++ = p[0];
+                    state->x++;
+                    continue;
+                }
+            } else if (state->x + i <= state->xsize) {
+                /* This string fits into current line. */
+                memcpy(out, p, i);
+                out += i;
+                state->x += i;
+                if (state->x == state->xsize) {
+                    NEWLINE(state, context);
+                }
                 continue;
             }
-        } else if (state->x + i <= state->xsize) {
-            /* This string fits into current line. */
-            memcpy(out, p, i);
-            out += i;
-            state->x += i;
-            if (state->x == state->xsize) {
-                NEWLINE(state, context);
-            }
-            continue;
         }
 
         /* No shortcut, copy pixel by pixel */
         for (c = 0; c < i; c++) {
-            *out++ = p[c];
+            if (p[c] != context->transparency) {
+                *out = p[c];
+            }
+            out++;
             if (++state->x >= state->xsize) {
                 NEWLINE(state, context);
             }