diff --git a/tests/unit/dialog/dialog_options.js b/tests/unit/dialog/dialog_options.js
index eab577c69..264c2fb6e 100644
--- a/tests/unit/dialog/dialog_options.js
+++ b/tests/unit/dialog/dialog_options.js
@@ -177,19 +177,24 @@ test("draggable", function() {
 });
 
 test("height", function() {
-	expect(3);
+	expect(4);
 
 	el = $('<div></div>').dialog();
-		equals(dlg().height(), 150, "default height");
+		equals(dlg().outerHeight(), 150, "default height");
 	el.remove();
 
 	el = $('<div></div>').dialog({ height: 237 });
-		equals(dlg().height(), 237, "explicit height");
+		equals(dlg().outerHeight(), 237, "explicit height");
 	el.remove();
 
 	el = $('<div></div>').dialog();
 		el.dialog('option', 'height', 238);
-		equals(dlg().height(), 238, "explicit height set after init");
+		equals(dlg().outerHeight(), 238, "explicit height set after init");
+	el.remove();
+	
+	el = $('<div></div>').css("padding", "20px")
+		.dialog({ height: 240 });
+		equals(dlg().outerHeight(), 240, "explicit height with padding");
 	el.remove();
 });
 
diff --git a/ui/jquery.ui.dialog.js b/ui/jquery.ui.dialog.js
index 49ef8f64b..3d7638667 100644
--- a/ui/jquery.ui.dialog.js
+++ b/ui/jquery.ui.dialog.js
@@ -625,7 +625,7 @@ $.widget("ui.dialog", {
 				height: "auto",
 				width: options.width
 			})
-			.height();
+			.outerHeight();
 		minContentHeight = Math.max( 0, options.minHeight - nonContentHeight );
 
 		if ( options.height === "auto" ) {