diff --git a/crates/image/src/gif.rs b/crates/image/src/gif.rs
index bcd97a5..8e75100 100644
--- a/crates/image/src/gif.rs
+++ b/crates/image/src/gif.rs
@@ -147,8 +147,8 @@ impl LzwDecoder {
         if self.next_code < 4096 {
             self.table.push((prefix, suffix));
             self.next_code += 1;
-            // Increase code size when we've filled the current capacity
-            if self.next_code > (1 << self.code_size) && self.code_size < 12 {
+            // Increase code size when all codes at the current size are used (early change)
+            if self.next_code >= (1 << self.code_size) && self.code_size < 12 {
                 self.code_size += 1;
             }
         }
@@ -848,7 +848,7 @@ mod tests {
     fn lzw_simple_sequence() {
         // LZW with min code size 2 (codes 0-3 are literal, 4=clear, 5=eoi)
         // Encode a simple sequence: clear, 0, 1, 0, 1, eoi
-        // Using 3-bit codes (min_code_size=2, initial code_size=3)
+        // initial code_size=3, bumps to 4 after next_code reaches 8
         let mut bits: u64 = 0;
         let mut bit_pos = 0u32;
 
@@ -856,9 +856,9 @@ mod tests {
             (4, 3), // clear code
             (0, 3), // literal 0
             (1, 3), // literal 1
-            (0, 3), // literal 0
-            (1, 3), // literal 1
-            (5, 3), // eoi
+            (0, 3), // literal 0 → add_entry makes next_code=8, code_size→4
+            (1, 4), // literal 1 (now 4 bits)
+            (5, 4), // eoi (4 bits)
         ];
 
         for &(code, nbits) in codes {
@@ -1256,11 +1256,11 @@ mod tests {
         // LZW min code size = 2 (4 literal codes: 0,1,2,3; clear=4, eoi=5)
         gif.push(2);
 
-        // Encode: clear(4), 0, 1, 2, 3, eoi(5) — all 3-bit codes
-        // 9 codes * 3 bits = 18 bits = 3 bytes (with padding)
+        // Encode: clear(4), 0, 1, 2, 3, eoi(5)
+        // code_size starts at 3, bumps to 4 after code 2 (next_code reaches 8)
         let mut bits: u64 = 0;
         let mut bp = 0u32;
-        for &(code, nbits) in &[(4u16, 3u8), (0, 3), (1, 3), (2, 3), (3, 3), (5, 3)] {
+        for &(code, nbits) in &[(4u16, 3u8), (0, 3), (1, 3), (2, 3), (3, 4), (5, 4)] {
             bits |= (code as u64) << bp;
             bp += nbits as u32;
         }