diff --git a/packages/pi-tui/src/tui.ts b/packages/pi-tui/src/tui.ts
index 7a078f2d3..3408016a0 100644
--- a/packages/pi-tui/src/tui.ts
+++ b/packages/pi-tui/src/tui.ts
@@ -616,9 +616,10 @@ export class TUI extends Container {
 		const height = this.terminal.rows;
 		let viewportTop = Math.max(0, this.maxLinesRendered - height);
 		let prevViewportTop = this.previousViewportTop;
+		let contentCursorRow = this.cursorRow;
 		let hardwareCursorRow = this.hardwareCursorRow;
 		const computeLineDiff = (targetRow: number): number => {
-			const currentScreenRow = hardwareCursorRow - prevViewportTop;
+			const currentScreenRow = contentCursorRow - prevViewportTop;
 			const targetScreenRow = targetRow - viewportTop;
 			return targetScreenRow - currentScreenRow;
 		};
@@ -805,6 +806,7 @@ export class TUI extends Container {
 			buffer += "\r\n".repeat(scroll);
 			prevViewportTop += scroll;
 			viewportTop += scroll;
+			contentCursorRow = moveTargetRow;
 			hardwareCursorRow = moveTargetRow;
 		}
 
diff --git a/src/tests/tui-autocomplete-ghost-lines.test.ts b/src/tests/tui-autocomplete-ghost-lines.test.ts
new file mode 100644
index 000000000..2faf22247
--- /dev/null
+++ b/src/tests/tui-autocomplete-ghost-lines.test.ts
@@ -0,0 +1,85 @@
+import { describe, it } from "node:test";
+import assert from "node:assert/strict";
+import { CURSOR_MARKER, TUI, type Component, type Terminal } from "@gsd/pi-tui";
+
+class MockTTYTerminal implements Terminal {
+  public writtenData: string[] = [];
+
+  readonly isTTY = true;
+
+  start(_onInput: (data: string) => void, _onResize: () => void): void {}
+  stop(): void {}
+  async drainInput(_maxMs?: number, _idleMs?: number): Promise<void> {}
+
+  write(data: string): void {
+    this.writtenData.push(data);
+  }
+
+  get columns(): number {
+    return 80;
+  }
+
+  get rows(): number {
+    return 24;
+  }
+
+  get kittyProtocolActive(): boolean {
+    return false;
+  }
+
+  moveBy(_lines: number): void {}
+  hideCursor(): void {}
+  showCursor(): void {}
+  clearLine(): void {}
+  clearFromCursor(): void {}
+  clearScreen(): void {}
+  setTitle(_title: string): void {}
+}
+
+class DynamicLinesComponent implements Component {
+  public lines: string[];
+
+  constructor(lines: string[]) {
+    this.lines = lines;
+  }
+
+  render(_width: number): string[] {
+    return this.lines;
+  }
+
+  invalidate(): void {}
+}
+
+describe("TUI autocomplete shrink clearing (#3721)", () => {
+  it("clears deleted autocomplete rows relative to the content bottom, not the IME cursor row", () => {
+    const terminal = new MockTTYTerminal();
+    const tui = new TUI(terminal, false);
+    const component = new DynamicLinesComponent([
+      "top border",
+      `prompt${CURSOR_MARKER}`,
+      "editor body",
+      "autocomplete row 1",
+      "autocomplete row 2",
+      "autocomplete row 3",
+    ]);
+
+    tui.addChild(component);
+    (tui as any).doRender();
+
+    terminal.writtenData = [];
+    component.lines = [
+      "top border",
+      `prompt${CURSOR_MARKER}`,
+      "editor body",
+      "autocomplete row 1",
+    ];
+
+    (tui as any).doRender();
+
+    assert.ok(terminal.writtenData.length >= 1, "shrink render should write a differential buffer");
+    assert.ok(
+      terminal.writtenData[0].startsWith("\x1b[?2026h\x1b[2A\r"),
+      `expected shrink diff to move up from prior content bottom, got ${JSON.stringify(terminal.writtenData[0])}`,
+    );
+  });
+});