diff --git a/packages/tui/CHANGELOG.md b/packages/tui/CHANGELOG.md
index b654906cd..713c29ce8 100644
--- a/packages/tui/CHANGELOG.md
+++ b/packages/tui/CHANGELOG.md
@@ -17,6 +17,7 @@
 ### Fixed
 
 - Fixed overlay compositing dropping `CURSOR_MARKER` when an overlay ends directly left of the cursor, which lost the hardware cursor position
+- Fixed focused fullscreen overlays blocking mouse-wheel scrolling of the transcript. Wheel events that no component handles now scroll the transcript instead of reaching the focused overlay's `handleInput` as raw input; overlays that scroll with the wheel must implement `handleMouse` ([#10769](https://github.com/earendil-works/pi/issues/10769))
 - Fixed fragmented terminal color replies leaking hex values into the prompt and triggering the external editor via their BEL terminator (related reports: [#10256](https://github.com/earendil-works/pi/issues/10256), [#10657](https://github.com/earendil-works/pi/issues/10657))
 
 ## [1.1.0] - 2026-10-07
diff --git a/packages/tui/src/tui-alt-screen.ts b/packages/tui/src/tui-alt-screen.ts
index a0ffeb89a..e92f5c953 100644
--- a/packages/tui/src/tui-alt-screen.ts
+++ b/packages/tui/src/tui-alt-screen.ts
@@ -715,7 +715,6 @@ export class TuiAltScreen extends TuiBase implements ViewportTUI {
 				if (this.applyMouseDispatchResult(event, result)) this.requestRender();
 				return { consume: true };
 			}
-			if (this.shouldDeferViewportInputToOverlay()) return undefined;
 			this.routeWheel(wheelEvent, wheelDelta);
 			return { consume: true };
 		}
diff --git a/packages/tui/test/tui-alt-screen.test.ts b/packages/tui/test/tui-alt-screen.test.ts
index 34a9b2e0b..25772b54c 100644
--- a/packages/tui/test/tui-alt-screen.test.ts
+++ b/packages/tui/test/tui-alt-screen.test.ts
@@ -1862,6 +1862,26 @@ describe("TuiAltScreen", () => {
 		tui.stop();
 	});
 
+	// #10769
+	it("scrolls the transcript on wheel input a focused overlay does not handle", async () => {
+		const terminal = new VirtualTerminal(20, 6);
+		const tui = new TuiAltScreen(terminal);
+		tui.addChild(new Text(Array.from({ length: 12 }, (_, index) => `line ${index + 1}`).join("\n"), 0, 0));
+		const overlay = new InputOverlay();
+		tui.start();
+		await terminal.waitForRender();
+		const topBefore = tui.viewportTop;
+		tui.showOverlay(overlay, { anchor: "top-left", width: 10 });
+		await terminal.waitForRender();
+		assert.strictEqual(overlay.focused, true);
+
+		terminal.sendInput("\x1b[<64;3;1M");
+		await terminal.waitForRender();
+		assert.ok(tui.viewportTop < topBefore);
+		assert.deepStrictEqual(overlay.inputs, []);
+		tui.stop();
+	});
+
 	it("focuses and captures drag gestures for mouse-aware components", async () => {
 		const terminal = new VirtualTerminal(20, 2);
 		const tui = new TuiAltScreen(terminal);
@@ -2001,7 +2021,7 @@ describe("TuiAltScreen", () => {
 		}
 	});
 
-	it("gives wheel and viewport keys to a focused overlay", async () => {
+	it("gives viewport keys to a focused overlay", async () => {
 		const terminal = new VirtualTerminal(20, 6);
 		const tui = new TuiAltScreen(terminal);
 		tui.addChild(new Text(Array.from({ length: 12 }, (_, index) => `line ${index + 1}`).join("\n"), 0, 0));
@@ -2013,8 +2033,7 @@ describe("TuiAltScreen", () => {
 		await terminal.waitForRender();
 		assert.strictEqual(overlay.focused, true);
 
-		const wheel = "\x1b[<64;10;3M";
-		const keys = ["\x1b[5~", "\x1b[6~", "\x1bOH", "\x1bOF", wheel];
+		const keys = ["\x1b[5~", "\x1b[6~", "\x1bOH", "\x1bOF"];
 		for (const key of keys) terminal.sendInput(key);
 		await terminal.waitForRender();