diff --git a/src/Plugin/ImageToolkit/Operation/gd/Background.php b/src/Plugin/ImageToolkit/Operation/gd/Background.php
index f6ac005..978b3a6 100644
--- a/src/Plugin/ImageToolkit/Operation/gd/Background.php
+++ b/src/Plugin/ImageToolkit/Operation/gd/Background.php
@@ -51,12 +51,18 @@ class Background extends GDImageToolkitOperationBase {
     }
 
     // Overlay background at 0,0.
-    $data = [
-      'watermark_image' => $arguments['background_image'],
-      'x_offset' => 0,
-      'y_offset' => 0,
-    ];
-    if (!$this->getToolkit()->apply('watermark', $data)) {
+    $success = $this->imageCopyMergeAlpha(
+      $this->getToolkit()->getResource(),
+      $arguments['background_image']->getToolkit()->getResource(),
+      0,
+      0,
+      0,
+      0,
+      $arguments['background_image']->getWidth(),
+      $arguments['background_image']->getHeight(),
+      100
+    );
+    if (!$success) {
       // In case of failure, destroy the temporary resource and restore
       // the original one.
       imagedestroy($this->getToolkit()->getResource());
diff --git a/src/Plugin/ImageToolkit/Operation/gd/GDOperationTrait.php b/src/Plugin/ImageToolkit/Operation/gd/GDOperationTrait.php
index eda9266..b5c2381 100644
--- a/src/Plugin/ImageToolkit/Operation/gd/GDOperationTrait.php
+++ b/src/Plugin/ImageToolkit/Operation/gd/GDOperationTrait.php
@@ -82,7 +82,36 @@ trait GDOperationTrait {
   }
 
   /**
-   * @todo
+   * Copy and merge part of an image, preserving alpha.
+   *
+   * The standard imagecopymerge() function in PHP GD fails to preserve the
+   * alpha information of two merged images. This method implements the
+   * workaround described in
+   * http://php.net/manual/en/function.imagecopymerge.php#92787
+   *
+   * @param resource $dst_im
+   *   Destination image link resource.
+   * @param resource $src_im
+   *   Source image link resource.
+   * @param int $dst_x
+   *   X-coordinate of destination point.
+   * @param int $dst_y
+   *   Y-coordinate of destination point.
+   * @param int $src_x
+   *   X-coordinate of source point.
+   * @param int $src_y
+   *   Y-coordinate of source point.
+   * @param int $src_w
+   *   Source width.
+   * @param int $src_h
+   *   Source height.
+   * @param int $pct
+   *   Opacity of the source image in percentage.
+   *
+   * @return bool
+   *   Returns TRUE on success or FALSE on failure.
+   *
+   * @see http://php.net/manual/en/function.imagecopymerge.php#92787
    */
   protected function imageCopyMergeAlpha($dst_im, $src_im, $dst_x, $dst_y, $src_x, $src_y, $src_w, $src_h, $pct) {
     if ($pct === 100) {
diff --git a/src/Tests/ImageEffectsBackgroundTest.php b/src/Tests/ImageEffectsBackgroundTest.php
new file mode 100644
index 0000000..a828345
--- /dev/null
+++ b/src/Tests/ImageEffectsBackgroundTest.php
@@ -0,0 +1,112 @@
+<?php
+
+/**
+ * @file
+ * Background effect test case script.
+ */
+
+namespace Drupal\image_effects\Tests;
+
+use Drupal\image\Entity\ImageStyle;
+
+/**
+ * Background effect test.
+ *
+ * @group Image Effects
+ */
+class ImageEffectsBackgroundTest extends ImageEffectsTestBase {
+
+  /**
+   * {@inheritdoc}
+   */
+  public function setUp() {
+    parent::setUp();
+    $this->toolkits = ['gd', 'imagemagick'];
+  }
+
+  /**
+   * Background effect test.
+   */
+  public function testBackgroundEffect() {
+    // Test operations on toolkits.
+    $this->executeTestOnToolkits([$this, 'doTestBackgroundOperations']);
+  }
+
+  /**
+   * Background operations test.
+   */
+  public function doTestBackgroundOperations() {
+    $image_factory = $this->container->get('image.factory');
+
+    $test_file = drupal_get_path('module', 'simpletest') . '/files/image-test.png';
+    $original_uri = file_unmanaged_copy($test_file, 'public://', FILE_EXISTS_RENAME);
+    $generated_uri = 'public://styles/image_effects_test/public/' . \Drupal::service('file_system')->basename($original_uri);
+
+    $background_file = drupal_get_path('module', 'simpletest') . '/files/image-1.png';
+    $background_uri = file_unmanaged_copy($background_file, 'public://', FILE_EXISTS_RENAME);
+
+    $effect = [
+      'id' => 'image_effects_background',
+      'data' => [
+        'placement' => 'left-top',
+        'x_offset' => 0,
+        'y_offset' => 0,
+        'opacity' => 100,
+        'background_image' => $background_uri,
+      ],
+    ];
+    $uuid = $this->addEffectToTestStyle($effect);
+
+    // Load Image Style.
+    $image_style = ImageStyle::load('image_effects_test');
+
+    // Check that ::transformDimensions returns expected dimensions.
+    $image = $image_factory->get($original_uri);
+    $this->assertEqual(40, $image->getWidth());
+    $this->assertEqual(20, $image->getHeight());
+    $url = file_url_transform_relative($image_style->buildUrl($original_uri));
+    $variables = array(
+      '#theme' => 'image_style',
+      '#style_name' => 'image_effects_test',
+      '#uri' => $original_uri,
+      '#width' => $image->getWidth(),
+      '#height' => $image->getHeight(),
+    );
+    $this->assertEqual('<img src="' . $url . '" width="360" height="240" alt="" class="image-style-image-effects-test" />', $this->getImageTag($variables));
+
+    // Check that ::applyEffect generates image with expected canvas.
+    $image_style->createDerivative($original_uri, $image_style->buildUri($original_uri));
+    $image = $image_factory->get($generated_uri, 'gd');
+    $this->assertEqual(360, $image->getWidth());
+    $this->assertEqual(240, $image->getHeight());
+    $this->assertTrue($this->colorsAreEqual($this->red, $this->getPixelColor($image, 0, 0)));
+    $this->assertTrue($this->colorsAreEqual($this->green, $this->getPixelColor($image, 39, 0)));
+    $this->assertTrue($this->colorsAreEqual([185, 185, 185, 0], $this->getPixelColor($image, 0, 19)));
+    $this->assertTrue($this->colorsAreEqual($this->blue, $this->getPixelColor($image, 39, 19)));
+
+    // Remove effect.
+    $this->removeEffectFromTestStyle($uuid);
+
+    // For the GD toolkit, test we are not left with orphan resource after
+    // applying the operation.
+    if ($image_factory->getToolkitId() === 'gd') {
+      $image = $image_factory->get($original_uri);
+      // Store the original GD resource.
+      $old_res = $image->getToolkit()->getResource();
+      // Apply the operation.
+      $image->apply('background', [
+        'x_offset' => 0,
+        'y_offset' => 0,
+        'opacity' => 100,
+        'background_image' => $image_factory->get($background_uri),
+      ]);
+      // The operation replaced the resource, check that the old one has
+      // been destroyed.
+      $new_res = $image->getToolkit()->getResource();
+      $this->assertTrue(is_resource($new_res));
+      $this->assertNotEqual($new_res, $old_res);
+      $this->assertFalse(is_resource($old_res));
+    }
+  }
+
+}