diff --git a/lib/OpenLayers/Layer/WMS.js b/lib/OpenLayers/Layer/WMS.js
index 5bacc2764d..e530e5c8ea 100644
--- a/lib/OpenLayers/Layer/WMS.js
+++ b/lib/OpenLayers/Layer/WMS.js
@@ -40,6 +40,9 @@ OpenLayers.Layer.WMS.prototype =
      */
     reproject: true,
  
+    /** @type Boolean */
+    isBaseLayer: true,
+ 
     /**
      * Constructor: OpenLayers.Layer.WMS
      * Create a new WMS layer object
@@ -70,13 +73,24 @@ OpenLayers.Layer.WMS.prototype =
                        OpenLayers.Util.upperCaseObject(this.DEFAULT_PARAMS)
                        );
 
-        // unless explicitly set in options, if the layer is transparent, 
-        // it will be an overlay
-        if (options == null || options.isBaseLayer == null) {
-            this.isBaseLayer = ((this.params.TRANSPARENT != "TRUE") && 
-                                (this.params.TRANSPARENT != "true") && 
-                                (this.params.TRANSPARENT != true));
+
+        //layer is transparent        
+        if (this.params.TRANSPARENT && 
+            this.params.TRANSPARENT.toString().toLowerCase() == "true") {
+            
+            // unless explicitly set in options, make layer an overlay
+            if ( (options == null) || (!options.isBaseLayer) ) {
+                this.isBaseLayer = false;
+            } 
+            
+            // jpegs can never be transparent, so intelligently switch the 
+            //  format, depending on teh browser's capabilities
+            if (this.params.FORMAT == "image/jpeg") {
+                this.params.FORMAT = OpenLayers.Util.alphaHack() ? "image/gif"
+                                                                 : "image/png";
+            }
         }
+
     },    
 
     /**
diff --git a/lib/OpenLayers/Layer/WMS/Untiled.js b/lib/OpenLayers/Layer/WMS/Untiled.js
index acb8357844..10d9a8d367 100644
--- a/lib/OpenLayers/Layer/WMS/Untiled.js
+++ b/lib/OpenLayers/Layer/WMS/Untiled.js
@@ -74,13 +74,23 @@ OpenLayers.Layer.WMS.Untiled.prototype =
                        OpenLayers.Util.upperCaseObject(this.DEFAULT_PARAMS)
                        );
 
-        // unless explicitly set in options, if the layer is transparent, 
-        // it will be an overlay        
-        if ((options == null) || (options.isBaseLayer == null)) {
-            this.isBaseLayer = ((this.params.TRANSPARENT != "TRUE") && 
-                                (this.params.TRANSPARENT != "true") && 
-                                (this.params.TRANSPARENT != true));
+        //layer is transparent        
+        if (this.params.TRANSPARENT && 
+            this.params.TRANSPARENT.toString().toLowerCase() == "true") {
+            
+            // unless explicitly set in options, make layer an overlay
+            if ( (options == null) || (!options.isBaseLayer) ) {
+                this.isBaseLayer = false;
+            } 
+            
+            // jpegs can never be transparent, so intelligently switch the 
+            //  format, depending on teh browser's capabilities
+            if (this.params.FORMAT == "image/jpeg") {
+                this.params.FORMAT = OpenLayers.Util.alphaHack() ? "image/gif"
+                                                                 : "image/png";
+            }
         }
+
     },    
 
     /**
diff --git a/tests/Layer/test_WMS.html b/tests/Layer/test_WMS.html
index 0dbdf5b111..d17230c9c7 100644
--- a/tests/Layer/test_WMS.html
+++ b/tests/Layer/test_WMS.html
@@ -10,11 +10,14 @@
     var url = "http://octo.metacarta.com/cgi-bin/mapserv";
     var params = { map: '/mapdata/vmap_wms.map', 
                    layers: 'basic', 
-                   format: 'image/png'};
+                   format: 'image/jpeg'};
 
     function test_01_Layer_WMS_constructor (t) {
-        t.plan( 10 );
+        t.plan( 13 );
 
+        var trans_format = "image/png";
+        if (OpenLayers.Util.alphaHack()) { trans_format = "image/gif"; } 
+        
         var url = "http://octo.metacarta.com/cgi-bin/mapserv";
         layer = new OpenLayers.Layer.WMS(name, url, params);
         t.ok( layer instanceof OpenLayers.Layer.WMS, "new OpenLayers.Layer.WMS returns object" );
@@ -32,14 +35,17 @@
         params.TRANSPARENT = "TRUE";
         var layer3 = new OpenLayers.Layer.WMS(name, url, params);
         t.eq(layer3.isBaseLayer, false, "transparency == 'TRUE', wms is not baselayer");
+        t.eq(layer3.params.FORMAT, trans_format, "transparent = TRUE causes non-image/jpeg format");
 
         params.TRANSPARENT = "TRuE";
         var layer4 = new OpenLayers.Layer.WMS(name, url, params);
-        t.eq(layer4.isBaseLayer, true, "transparency == 'TRuE', wms is baselayer");
+        t.eq(layer4.isBaseLayer, false, "transparency == 'TRuE', wms is not baselayer");
+        t.eq(layer4.params.FORMAT, trans_format, "transparent = TRuE causes non-image/jpeg format");
 
         params.TRANSPARENT = true;
         var layer5 = new OpenLayers.Layer.WMS(name, url, params);
         t.eq(layer5.isBaseLayer, false, "transparency == true, wms is not baselayer");
+        t.eq(layer5.params.FORMAT, trans_format, "transparent = true causes non-image/jpeg format");
 
         params.TRANSPARENT = false;
         var layer6 = new OpenLayers.Layer.WMS(name, url, params);