diff --git a/src/Intervention/Image/Image.php b/src/Intervention/Image/Image.php
index 514cbfb7..5462a44f 100644
--- a/src/Intervention/Image/Image.php
+++ b/src/Intervention/Image/Image.php
@@ -504,8 +504,10 @@ class Image
 
         // create new canvas
         $image = imagecreatetruecolor($width, $height);
+        imagealphablending($image, false);
+        imagesavealpha($image, true);
 
-        if ($width > $this->width || $height > $this->height) {
+        if ($width > $this->width or $height > $this->height) {
             $bgcolor = is_null($bgcolor) ? '000000' : $bgcolor;
             imagefill($image, 0, 0, $this->parseColor($bgcolor));
         }
diff --git a/tests/ImageTest.php b/tests/ImageTest.php
index cfa5f426..19e82e04 100644
--- a/tests/ImageTest.php
+++ b/tests/ImageTest.php
@@ -547,6 +547,18 @@ class ImageTest extends PHPUnit_Framework_Testcase
         $transparency_2 = $img->pickColor(899, 699, 'array');
         $this->assertEquals(array('r' => 0, 'g' => 0, 'b' => 0, 'a' => 0.0), $transparency_1);
         $this->assertEquals(array('r' => 0, 'g' => 0, 'b' => 0, 'a' => 0.0), $transparency_2);
+
+        // preserve transparency when resizing canvas
+        $img = new Image('public/circle.png');
+        $img->resizeCanvas(40, 40, 'center');
+        $this->assertInstanceOf('Intervention\Image\Image', $img);
+        $this->assertInternalType('int', $img->width);
+        $this->assertInternalType('int', $img->height);
+        $this->assertEquals($img->width, 40);
+        $this->assertEquals($img->height, 40);
+        $this->assertEquals(array('r' => 0, 'g' => 0, 'b' => 0, 'a' => 0.0), $img->pickColor(0, 0, 'array'));
+        $this->assertEquals(array('r' => 0, 'g' => 0, 'b' => 0, 'a' => 0.8), $img->pickColor(20, 20, 'array'));
+
     }
 
     public function testCropImage()