diff --git a/src/dom-utils/getCompositeRect.js b/src/dom-utils/getCompositeRect.js
index e32a649fa0..663a7d5a92 100644
--- a/src/dom-utils/getCompositeRect.js
+++ b/src/dom-utils/getCompositeRect.js
@@ -17,11 +17,12 @@ export default function getCompositeRect(
 ): Rect {
   const documentElement = getDocumentElement(offsetParent);
   const rect = getBoundingClientRect(elementOrVirtualElement);
+  const isOffsetParentAnElement = isHTMLElement(offsetParent);
 
   let scroll = { scrollLeft: 0, scrollTop: 0 };
   let offsets = { x: 0, y: 0 };
 
-  if (!isFixed) {
+  if (isOffsetParentAnElement || (!isOffsetParentAnElement && !isFixed)) {
     if (
       getNodeName(offsetParent) !== 'body' ||
       // https://github.com/popperjs/popper-core/issues/1078
diff --git a/src/dom-utils/getOffsetParent.js b/src/dom-utils/getOffsetParent.js
index 513793f7a8..0efa9a6c4c 100644
--- a/src/dom-utils/getOffsetParent.js
+++ b/src/dom-utils/getOffsetParent.js
@@ -4,6 +4,7 @@ import getNodeName from './getNodeName';
 import getComputedStyle from './getComputedStyle';
 import { isHTMLElement } from './instanceOf';
 import isTableElement from './isTableElement';
+import getParentNode from './getParentNode';
 
 function getTrueOffsetParent(element: Element): ?Element {
   if (
@@ -17,10 +18,34 @@ function getTrueOffsetParent(element: Element): ?Element {
   return element.offsetParent;
 }
 
-/*
-get the closest ancestor positioned element. Handles some edge cases,
-such as table ancestors and cross browser bugs.
-*/
+// `.offsetParent` reports `null` for fixed elements, while absolute elements
+// return the containing block
+function getContainingBlock(element: Element) {
+  let currentNode = getParentNode(element);
+
+  while (getNodeName(currentNode) !== 'body') {
+    if (isHTMLElement(currentNode)) {
+      const css = getComputedStyle(currentNode);
+
+      // This is non-exhaustive but covers the most common CSS properties that
+      // create a containing block.
+      if (
+        css.transform !== 'none' ||
+        css.perspective !== 'none' ||
+        css.willChange !== 'auto'
+      ) {
+        return currentNode;
+      } else {
+        currentNode = currentNode.parentNode;
+      }
+    }
+  }
+
+  return null;
+}
+
+// Gets the closest ancestor positioned element. Handles some edge cases,
+// such as table ancestors and cross browser bugs.
 export default function getOffsetParent(element: Element) {
   const window = getWindow(element);
 
@@ -39,5 +64,5 @@ export default function getOffsetParent(element: Element) {
     return window;
   }
 
-  return offsetParent || window;
+  return offsetParent || getContainingBlock(element) || window;
 }
diff --git a/src/index.js b/src/index.js
index 3fba5df7d4..63d2575a90 100644
--- a/src/index.js
+++ b/src/index.js
@@ -41,7 +41,8 @@ type PopperGeneratorArgs = {
 
 function areValidElements(...args: Array<any>): boolean {
   return !args.some(
-    element => !(element && typeof element.getBoundingClientRect === 'function')
+    (element) =>
+      !(element && typeof element.getBoundingClientRect === 'function')
   );
 }
 
@@ -100,7 +101,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
         );
 
         // Strip out disabled modifiers
-        state.orderedModifiers = orderedModifiers.filter(m => m.enabled);
+        state.orderedModifiers = orderedModifiers.filter((m) => m.enabled);
 
         // Validate the provided modifiers so that the consumer will get warned
         // if one of the modifiers is invalid for any reason
@@ -137,7 +138,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
           // We no longer take into account `margins` on the popper, and it can
           // cause bugs with positioning, so we'll warn the consumer
           if (
-            [marginTop, marginRight, marginBottom, marginLeft].some(margin =>
+            [marginTop, marginRight, marginBottom, marginLeft].some((margin) =>
               parseFloat(margin)
             )
           ) {
@@ -203,7 +204,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
         // it doesn't persist and is fresh on each update.
         // To ensure persistent data, use `${name}#persistent`
         state.orderedModifiers.forEach(
-          modifier =>
+          (modifier) =>
             (state.modifiersData[modifier.name] = {
               ...modifier.data,
             })
@@ -237,7 +238,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
       // not necessary (debounced to run at most once-per-tick)
       update: debounce<$Shape<State>>(
         () =>
-          new Promise<$Shape<State>>(resolve => {
+          new Promise<$Shape<State>>((resolve) => {
             instance.forceUpdate();
             resolve(state);
           })
@@ -256,7 +257,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
       return instance;
     }
 
-    instance.setOptions(options).then(state => {
+    instance.setOptions(options).then((state) => {
       if (!isDestroyed && options.onFirstUpdate) {
         options.onFirstUpdate(state);
       }
@@ -278,7 +279,7 @@ export function popperGenerator(generatorOptions: PopperGeneratorArgs = {}) {
     }
 
     function cleanupModifierEffects() {
-      effectCleanupFns.forEach(fn => fn());
+      effectCleanupFns.forEach((fn) => fn());
       effectCleanupFns = [];
     }
 
diff --git a/tests/functional/__image_snapshots__/containing-block-test-js-should-be-positioned-on-the-bottom-1-snap.png b/tests/functional/__image_snapshots__/containing-block-test-js-should-be-positioned-on-the-bottom-1-snap.png
new file mode 100644
index 0000000000..1fac112a83
Binary files /dev/null and b/tests/functional/__image_snapshots__/containing-block-test-js-should-be-positioned-on-the-bottom-1-snap.png differ
diff --git a/tests/functional/containing-block.test.js b/tests/functional/containing-block.test.js
new file mode 100644
index 0000000000..c6a5b63e99
--- /dev/null
+++ b/tests/functional/containing-block.test.js
@@ -0,0 +1,13 @@
+/**
+ * @jest-environment puppeteer
+ * @flow
+ */
+import { screenshot, scroll } from '../utils/puppeteer.js';
+
+it('should be positioned on the bottom', async () => {
+  const page = await browser.newPage();
+  await page.goto(`${TEST_URL}/containing-block.html`);
+  await scroll(page, '#containing-block', 200);
+
+  expect(await screenshot(page)).toMatchImageSnapshot();
+});
diff --git a/tests/visual/containing-block.html b/tests/visual/containing-block.html
new file mode 100644
index 0000000000..fdff5d5de7
--- /dev/null
+++ b/tests/visual/containing-block.html
@@ -0,0 +1,55 @@
+<!DOCTYPE html> <title>Basic Visual Test</title>
+
+<style>
+  @import '/reset.css';
+  #reference {
+    width: 200px;
+    height: 200px;
+    background-color: red;
+    box-shadow: inset 0 0 0 1px black;
+  }
+
+  #popper {
+    width: 100px;
+    height: 100px;
+    background-color: rebeccapurple;
+    box-shadow: inset 0 0 0 1px black;
+  }
+
+  #containing-block {
+    background: gray;
+    width: 400px;
+    height: 400px;
+    overflow: auto;
+    will-change: transform;
+  }
+
+  #containing-block::before {
+    content: '';
+    display: block;
+    height: 200px;
+    width: 1px;
+  }
+
+  #containing-block::after {
+    content: '';
+    display: block;
+    height: 200px;
+    width: 1px;
+  }
+</style>
+
+<div id="containing-block">
+  <div id="reference">Reference Box</div>
+  <div id="popper">Popper Box</div>
+</div>
+
+<script type="module">
+  import { createPopper } from './dist/popper.js';
+  const reference = document.querySelector('#reference');
+  const popper = document.querySelector('#popper');
+
+  window.instance = createPopper(reference, popper, {
+    strategy: 'fixed',
+  });
+</script>