diff --git a/src/cascadia/UnitTests_TerminalCore/ConptyRoundtripTests.cpp b/src/cascadia/UnitTests_TerminalCore/ConptyRoundtripTests.cpp
index 07f246b68ff..d5aee1d8b06 100644
--- a/src/cascadia/UnitTests_TerminalCore/ConptyRoundtripTests.cpp
+++ b/src/cascadia/UnitTests_TerminalCore/ConptyRoundtripTests.cpp
@@ -227,6 +227,8 @@ class TerminalCoreUnitTests::ConptyRoundtripTests final
     TEST_METHOD(SimpleAltBufferTest);
     TEST_METHOD(AltBufferToAltBufferTest);
 
+    TEST_METHOD(TestPowerLineFirstFrame);
+
     TEST_METHOD(AltBufferResizeCrash);
 
     TEST_METHOD(TestNoExtendedAttrsOptimization);
@@ -4111,6 +4113,77 @@ void ConptyRoundtripTests::AltBufferToAltBufferTest()
     verifyBuffer(*termAltTb, term->_GetMutableViewport().ToExclusive(), Frame::StillInAltBuffer);
 }
 
+void ConptyRoundtripTests::TestPowerLineFirstFrame()
+{
+    Log::Comment(L"This is a test for GH#8341. If we received colored spaces "
+                 L"BEFORE the first frame, we should still emit them!");
+
+    auto& g = ServiceLocator::LocateGlobals();
+    auto& renderer = *g.pRender;
+    auto& gci = g.getConsoleInformation();
+    auto& si = gci.GetActiveOutputBuffer();
+    auto& sm = si.GetStateMachine();
+
+    auto* hostTb = &si.GetTextBuffer();
+    auto* termTb = term->_mainBuffer.get();
+
+    _checkConptyOutput = false;
+
+    TextAttribute whiteOnGreen{};
+    whiteOnGreen.SetIndexedForeground(TextColor::DARK_WHITE);
+    whiteOnGreen.SetIndexedBackground(TextColor::BRIGHT_GREEN);
+
+    TextAttribute greenOnBlack{};
+    greenOnBlack.SetIndexedForeground(TextColor::BRIGHT_GREEN);
+    greenOnBlack.SetIndexedBackground(TextColor::BRIGHT_BLACK);
+
+    TextAttribute whiteOnBlack{};
+    whiteOnBlack.SetIndexedForeground(TextColor::DARK_WHITE);
+    whiteOnBlack.SetIndexedBackground(TextColor::BRIGHT_BLACK);
+
+    TextAttribute blackOnDefault{};
+    blackOnDefault.SetIndexedForeground(TextColor::BRIGHT_BLACK);
+
+    TextAttribute defaultOnDefault{};
+
+    Log::Comment(L"========== Fill test content ==========");
+
+    // As a pwsh one-liner:
+    //
+    //  "`e[37m`e[102m foo\bar `e[92m`e[100m▶ `e[37mBar `e[90m`e[49m▶ `e[m"
+    //
+    // Generally taken from
+    // https://github.com/microsoft/terminal/issues/8341#issuecomment-731310022,
+    // but minimized for easier testing.
+
+    sm.ProcessString(L"\x1b[37m\x1b[102m" // dark white on bright green
+                     L" foo\\bar ");
+    sm.ProcessString(L"\x1b[92m\x1b[100m" // bright green on bright black
+                     L"▶ ");
+    sm.ProcessString(L"\x1b[37m" // dark white on bright black
+                     L"Bar ");
+    sm.ProcessString(L"\x1b[90m\x1b[49m" // bright black on default
+                     L"▶ ");
+    sm.ProcessString(L"\x1b[m\n"); // default on default
+
+    auto verifyBuffer = [&](const TextBuffer& tb) {
+        // If this test fails on character 8, then it's because we didn't emit the space, we just moved ahead.
+        auto iter0 = TestUtils::VerifyLineContains(tb, { 0, 0 }, whiteOnGreen, 9u);
+        TestUtils::VerifyLineContains(iter0, OutputCellIterator{ greenOnBlack, 2u });
+        TestUtils::VerifyLineContains(iter0, OutputCellIterator{ whiteOnBlack, 4u });
+        TestUtils::VerifyLineContains(iter0, OutputCellIterator{ blackOnDefault, 2u });
+    };
+
+    Log::Comment(L"========== Check host buffer ==========");
+    verifyBuffer(*hostTb);
+
+    Log::Comment(L"========== Paint first frame ==========");
+    VERIFY_SUCCEEDED(renderer.PaintFrame());
+
+    Log::Comment(L"========== Check terminal buffer ==========");
+    verifyBuffer(*termTb);
+}
+
 void ConptyRoundtripTests::AltBufferResizeCrash()
 {
     Log::Comment(L"During the review for GH#12719, it was noticed that this "
diff --git a/src/host/ut_host/ConptyOutputTests.cpp b/src/host/ut_host/ConptyOutputTests.cpp
index 29e0e28f20f..1ebff63cac2 100644
--- a/src/host/ut_host/ConptyOutputTests.cpp
+++ b/src/host/ut_host/ConptyOutputTests.cpp
@@ -121,6 +121,7 @@ class ConptyOutputTests
     TEST_METHOD(WriteAFewSimpleLines);
     TEST_METHOD(InvalidateUntilOneBeforeEnd);
     TEST_METHOD(SetConsoleTitleWithControlChars);
+    TEST_METHOD(IncludeBackgroundColorChangesInFirstFrame);
 
 private:
     bool _writeCallback(const char* const pch, const size_t cch);
@@ -371,6 +372,7 @@ void ConptyOutputTests::SetConsoleTitleWithControlChars()
 {
     BEGIN_TEST_METHOD_PROPERTIES()
         TEST_METHOD_PROPERTY(L"Data:control", L"{0x00, 0x0A, 0x1B, 0x80, 0x9B, 0x9C}")
+        TEST_METHOD_PROPERTY(L"IsolationLevel", L"Method")
     END_TEST_METHOD_PROPERTIES()
 
     int control;
@@ -400,3 +402,29 @@ void ConptyOutputTests::SetConsoleTitleWithControlChars()
 
     VERIFY_SUCCEEDED(renderer.PaintFrame());
 }
+
+void ConptyOutputTests::IncludeBackgroundColorChangesInFirstFrame()
+{
+    auto& g = ServiceLocator::LocateGlobals();
+    auto& renderer = *g.pRender;
+    auto& gci = g.getConsoleInformation();
+    auto& si = gci.GetActiveOutputBuffer();
+    auto& sm = si.GetStateMachine();
+
+    sm.ProcessString(L"\x1b[41mRun 1     \x1b[42mRun 2     \x1b[43mRun 3     \x1b[m");
+
+    expectedOutput.push_back("\x1b[2J"); // standard init sequence for the first frame
+    expectedOutput.push_back("\x1b[m"); // standard init sequence for the first frame
+    expectedOutput.push_back("\x1b[41m");
+    expectedOutput.push_back("\x1b[H"); // standard init sequence for the first frame
+    expectedOutput.push_back("Run 1     ");
+    expectedOutput.push_back("\x1b[42m");
+    expectedOutput.push_back("Run 2     ");
+    expectedOutput.push_back("\x1b[43m");
+    expectedOutput.push_back("Run 3     ");
+
+    // This is also part of the standard init sequence.
+    expectedOutput.push_back("\x1b[?25h");
+
+    VERIFY_SUCCEEDED(renderer.PaintFrame());
+}
diff --git a/src/inc/TestUtils.h b/src/inc/TestUtils.h
index de8a94f35e8..d6e8f146593 100644
--- a/src/inc/TestUtils.h
+++ b/src/inc/TestUtils.h
@@ -168,15 +168,19 @@ class TerminalCoreUnitTests::TestUtils
             auto actualAttrs = actual->TextAttr();
             auto expectedAttrs = expected->TextAttr();
 
-            auto mismatched = (actualChars != expectedChars || actualAttrs != expectedAttrs);
+            auto mismatched = ((!expectedChars.empty() && actualChars != expectedChars) || actualAttrs != expectedAttrs);
             if (mismatched)
             {
                 WEX::Logging::Log::Comment(WEX::Common::NoThrowString().Format(
                     L"Character or attribute at index %d was mismatched", charsProcessed));
             }
 
-            VERIFY_ARE_EQUAL(expectedChars, actualChars);
+            if (!expectedChars.empty())
+            {
+                VERIFY_ARE_EQUAL(expectedChars, actualChars);
+            }
             VERIFY_ARE_EQUAL(expectedAttrs, actualAttrs);
+
             if (mismatched)
             {
                 return false;
diff --git a/src/renderer/vt/paint.cpp b/src/renderer/vt/paint.cpp
index 42a7a2496d1..e1555ea18fb 100644
--- a/src/renderer/vt/paint.cpp
+++ b/src/renderer/vt/paint.cpp
@@ -453,10 +453,13 @@ using namespace Microsoft::Console::Types;
     // the lines _wrapped_. It doesn't care to manually break the lines, but if
     // we trimmed the spaces off here, we'd print all the "~"s one after another
     // on the same line.
-    const auto removeSpaces = !lineWrapped && (useEraseChar ||
-                                               _clearedAllThisFrame ||
-                                               (_newBottomLine && printingBottomLine && bgMatched));
-    const auto cchActual = removeSpaces ? nonSpaceLength : cchLine;
+    static const TextAttribute defaultAttrs{};
+    const bool removeSpaces = !lineWrapped && (useEraseChar // we determined earlier that ECH is optimal
+                                               || (_clearedAllThisFrame && _lastTextAttributes == defaultAttrs) // OR we cleared the last frame to the default attributes (specifically)
+                                               || (_newBottomLine && printingBottomLine && bgMatched)); // OR we just scrolled a new line onto the bottom of the screen with the correct attributes
+    const size_t cchActual = removeSpaces ?
+                                 (cchLine - numSpaces) :
+                                 cchLine;
 
     const auto columnsActual = removeSpaces ?
                                    (totalWidth - numSpaces) :