diff --git a/docs/changelog.md b/docs/changelog.md
index 96e525c7..2e709b2e 100644
--- a/docs/changelog.md
+++ b/docs/changelog.md
@@ -10,6 +10,10 @@ Requires libvips v8.3.3
   [#561](https://github.com/lovell/sharp/issues/561)
   [@abagshaw](https://github.com/abagshaw)
 
+* Correct calculation of y-axis placement when overlaying image at a fixed point.
+  [#566](https://github.com/lovell/sharp/issues/566)
+  [@Nateowami](https://github.com/Nateowami)
+
 #### v0.16.0 - 18<sup>th</sup> August 2016
 
 * Add pre-compiled libvips for OS X, ARMv7 and ARMv8.
diff --git a/src/common.cc b/src/common.cc
index 1babef46..4ed3e4ca 100644
--- a/src/common.cc
+++ b/src/common.cc
@@ -391,7 +391,7 @@ namespace sharp {
 
     if(y >= 0 && y < (inHeight - outHeight)) {
       top = y;
-    } else if(x >= (inHeight - outHeight)) {
+    } else if(y >= (inHeight - outHeight)) {
       top = inHeight - outHeight;
     }
 
diff --git a/test/fixtures/expected/overlay-bottom-edges-meet.jpg b/test/fixtures/expected/overlay-bottom-edges-meet.jpg
new file mode 100644
index 00000000..edc7c249
Binary files /dev/null and b/test/fixtures/expected/overlay-bottom-edges-meet.jpg differ
diff --git a/test/unit/overlay.js b/test/unit/overlay.js
index f67697ff..40c37161 100644
--- a/test/unit/overlay.js
+++ b/test/unit/overlay.js
@@ -437,7 +437,27 @@ describe('Overlays', function() {
           assert.strictEqual(3, info.channels);
           fixtures.assertSimilar(expected, data, done);
         });
-      
+    });
+
+    it('Overlay 100x100 with 50x50 so bottom edges meet', function(done) {
+      sharp(fixtures.inputJpg)
+        .resize(50, 50)
+        .toBuffer(function(err, overlay) {
+          if (err) throw err;
+          sharp(fixtures.inputJpgWithLandscapeExif1)
+            .resize(100, 100)
+            .overlayWith(overlay, {
+              top: 50,
+              left: 40
+            })
+            .toBuffer(function(err, data, info) {
+              if (err) throw err;
+              assert.strictEqual('jpeg', info.format);
+              assert.strictEqual(100, info.width);
+              assert.strictEqual(100, info.height);
+              fixtures.assertSimilar(fixtures.expected('overlay-bottom-edges-meet.jpg'), data, done);
+            });
+        });
     });
   });