diff --git a/common/changes/@itwin/core-frontend/bugfix-overlayTerrain_2022-03-29-12-02.json b/common/changes/@itwin/core-frontend/bugfix-overlayTerrain_2022-03-29-12-02.json
new file mode 100644
index 000000000000..4384576bb712
--- /dev/null
+++ b/common/changes/@itwin/core-frontend/bugfix-overlayTerrain_2022-03-29-12-02.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@itwin/core-frontend",
+      "comment": "Fix overlay map layers that were displayed at the wrong elevation",
+      "type": "none"
+    }
+  ],
+  "packageName": "@itwin/core-frontend"
+}
\ No newline at end of file
diff --git a/core/frontend/src/tile/map/MapTileTree.ts b/core/frontend/src/tile/map/MapTileTree.ts
index 12fce23b85f1..72bdbe4897bf 100644
--- a/core/frontend/src/tile/map/MapTileTree.ts
+++ b/core/frontend/src/tile/map/MapTileTree.ts
@@ -423,7 +423,7 @@ class MapTreeSupplier implements TileTreeSupplier {
       cmp = compareStringsOrUndefined(lhs.maskModelIds, rhs.maskModelIds);
       if (0 === cmp) {
         cmp = compareBooleans(lhs.isOverlay, rhs.isOverlay);
-        if (0 === cmp && !lhs.isOverlay) {
+        if (0 === cmp) {
           cmp = compareBooleans(lhs.wantSkirts, rhs.wantSkirts);
           if (0 === cmp) {
             cmp = compareBooleans(lhs.wantNormals, rhs.wantNormals);
@@ -666,7 +666,7 @@ export class MapTileTreeReference extends TileTreeReference {
 
     const id: MapTreeId = {
       tileUserId: this._tileUserId,
-      applyTerrain: this.settings.applyTerrain && !this.isOverlay && !this._isDrape,
+      applyTerrain: this.settings.applyTerrain && !this._isDrape,
       terrainProviderName: this.settings.terrainSettings.providerName,
       terrainHeightOrigin: this.settings.terrainSettings.heightOrigin,
       terrainHeightOriginMode: this.settings.terrainSettings.heightOriginMode,