diff --git a/GPU/GPUState.h b/GPU/GPUState.h
index 5a119aa680..c8481301ba 100644
--- a/GPU/GPUState.h
+++ b/GPU/GPUState.h
@@ -173,10 +173,7 @@ struct GPUgstate {
 				blend,
 				blendfixa,
 				blendfixb,
-				dith1,
-				dith2,
-				dith3,
-				dith4,
+				dithmtx[4],
 				lop,                  // 0xE6
 				zmsk,
 				pmskc,
@@ -249,6 +246,11 @@ struct GPUgstate {
 
 	// Dither
 	bool isDitherEnabled() const { return ditherEnable & 1; }
+	int getDitherValue(int x, int y) const {
+		u8 raw = (dithmtx[y & 3] >> ((x & 3) * 4)) & 0xF;
+		// Apply sign extension to make 8-F negative, 0-7 positive.
+		return ((s8)(raw << 4)) >> 4;
+	}
 
 	// Color Mask
 	u32 getColorMask() const { return (pmskc & 0xFFFFFF) | ((pmska & 0xFF) << 24); }
diff --git a/GPU/Software/Rasterizer.cpp b/GPU/Software/Rasterizer.cpp
index 27783c86d3..5db77b9407 100644
--- a/GPU/Software/Rasterizer.cpp
+++ b/GPU/Software/Rasterizer.cpp
@@ -895,12 +895,24 @@ inline void DrawSinglePixel(const DrawingCoords &p, u16 z, u8 fog, const Vec4<in
 	const u32 old_color = GetPixelColor(p.x, p.y);
 	u32 new_color;
 
+	// Dithering happens before the logic op and regardless of framebuffer format or clear mode.
+	// We do it while alpha blending because it happens before clamping.
 	if (gstate.isAlphaBlendEnabled() && !clearMode) {
 		const Vec4<int> dst = Vec4<int>::FromRGBA(old_color);
+		Vec3<int> blended = AlphaBlendingResult(prim_color, dst);
+		if (gstate.isDitherEnabled()) {
+			blended += Vec3<int>::AssignToAll(gstate.getDitherValue(p.x, p.y));
+		}
+
 		// ToRGB() always automatically clamps.
-		new_color = AlphaBlendingResult(prim_color, dst).ToRGB();
+		new_color = blended.ToRGB();
 		new_color |= stencil << 24;
 	} else {
+		if (gstate.isDitherEnabled()) {
+			// We'll discard alpha anyway.
+			prim_color += Vec4<int>::AssignToAll(gstate.getDitherValue(p.x, p.y));
+		}
+
 #if defined(_M_SSE)
 		new_color = Vec3<int>(prim_color.ivec).ToRGB();
 		new_color |= stencil << 24;
@@ -920,7 +932,6 @@ inline void DrawSinglePixel(const DrawingCoords &p, u16 z, u8 fog, const Vec4<in
 	}
 	new_color = (new_color & ~gstate.getColorMask()) | (old_color & gstate.getColorMask());
 
-	// TODO: Dither before or inside SetPixelColor
 	SetPixelColor(p.x, p.y, new_color);
 }