diff --git a/Tests/test_file_xpm.py b/Tests/test_file_xpm.py
index 86d86602f17..34e3e3d5972 100644
--- a/Tests/test_file_xpm.py
+++ b/Tests/test_file_xpm.py
@@ -33,6 +33,48 @@ def test_rgb() -> None:
         assert_image_similar(im, hopper(), 16)
 
 
+def test_transparency() -> None:
+    data = b"""/* XPM */
+static char *test[] = {
+"2 2 3 1",
+" \tc None",
+"r\tc #FF0000",
+"b\tc #0000FF",
+" r",
+"b "};
+"""
+    with Image.open(BytesIO(data)) as im:
+        assert im.mode == "P"
+        assert im.info["transparency"] == 0
+
+        converted = im.convert("RGBA")
+        assert converted.getpixel((0, 0)) == (0, 0, 0, 0)
+        assert converted.getpixel((1, 0)) == (255, 0, 0, 255)
+        assert converted.getpixel((0, 1)) == (0, 0, 255, 255)
+
+
+def test_transparency_rgba() -> None:
+    # With more than 256 colours and a transparent colour,
+    # the image is opened as RGBA
+    chars = "0123456789abcdefghijklmnopqrstuvwxy"
+    colours = [
+        b'"%s\tc #%06x",' % ((chars[i // 35] + chars[i % 35]).encode(), i + 1)
+        for i in range(300)
+    ]
+    colours.append(b'"zz\tc None",')
+    data = (
+        b'/* XPM */\nstatic char *test[] = {\n"2 1 301 2",\n'
+        + b"\n".join(colours)
+        + b'\n"00zz"};\n'
+    )
+    with Image.open(BytesIO(data)) as im:
+        assert im.mode == "RGBA"
+        assert "transparency" not in im.info
+
+        assert im.getpixel((0, 0)) == (0, 0, 1, 255)
+        assert im.getpixel((1, 0)) == (0, 0, 0, 0)
+
+
 def test_truncated_header() -> None:
     data = b"/* XPM */"
     with pytest.raises(SyntaxError, match="broken XPM file"):
diff --git a/src/PIL/XpmImagePlugin.py b/src/PIL/XpmImagePlugin.py
index 80192f55e53..6eee878a266 100644
--- a/src/PIL/XpmImagePlugin.py
+++ b/src/PIL/XpmImagePlugin.py
@@ -61,6 +61,7 @@ def _open(self) -> None:
         # load palette description
 
         palette = {}
+        transparent_key = None
 
         for _ in range(palette_length):
             line = self.fp.readline().rstrip()
@@ -73,7 +74,8 @@ def _open(self) -> None:
                     # process colour key
                     rgb = s[i + 1]
                     if rgb == b"None":
-                        self.info["transparency"] = c
+                        transparent_key = c
+                        palette[c] = b"\0\0\0"
                     elif rgb.startswith(b"#"):
                         rgb_int = int(rgb[1:], 16)
                         palette[c] = (
@@ -94,12 +96,22 @@ def _open(self) -> None:
 
         args: tuple[int, dict[bytes, bytes] | tuple[bytes, ...]]
         if palette_length > 256:
-            self._mode = "RGB"
+            if transparent_key is not None:
+                self._mode = "RGBA"
+                palette = {
+                    c: rgb + (b"\0" if c == transparent_key else b"\xff")
+                    for c, rgb in palette.items()
+                }
+            else:
+                self._mode = "RGB"
             args = (bpp, palette)
         else:
             self._mode = "P"
             self.palette = ImagePalette.raw("RGB", b"".join(palette.values()))
-            args = (bpp, tuple(palette.keys()))
+            palette_keys = tuple(palette.keys())
+            args = (bpp, palette_keys)
+            if transparent_key is not None:
+                self.info["transparency"] = palette_keys.index(transparent_key)
 
         self.tile = [ImageFile._Tile("xpm", (0, 0) + self.size, self.fp.tell(), args)]
 
@@ -124,8 +136,8 @@ def decode(self, buffer: Image.DecoderInput) -> tuple[int, int]:
         data = bytearray()
         bpp, palette = self.args
         dest_length = self.state.xsize * self.state.ysize
-        if self.mode == "RGB":
-            dest_length *= 3
+        if self.mode in ("RGB", "RGBA"):
+            dest_length *= len(self.mode)
         pixel_header = False
         while len(data) < dest_length:
             line = self.fd.readline()
@@ -137,7 +149,7 @@ def decode(self, buffer: Image.DecoderInput) -> tuple[int, int]:
             line = b'"'.join(line.split(b'"')[1:-1])
             for i in range(0, len(line), bpp):
                 key = line[i : i + bpp]
-                if self.mode == "RGB":
+                if self.mode in ("RGB", "RGBA"):
                     data += palette[key]
                 else:
                     data += o8(palette.index(key))