diff --git a/src/vs/base/browser/ui/menu/menu.css b/src/vs/base/browser/ui/menu/menu.css
index 77ed49872282b5d2f4541c21d9535acec21e075a..9c3dde44785d61676afa47b62971961934bcc03a 100644
--- a/src/vs/base/browser/ui/menu/menu.css
+++ b/src/vs/base/browser/ui/menu/menu.css
@@ -159,6 +159,10 @@
 	outline: 0;
 }
 
+.menubar.compact {
+	flex-shrink: 0;
+}
+
 .menubar.compact > .menubar-menu-button {
 	width: 100%;
 	height: 100%;
@@ -190,12 +194,14 @@
 }
 
 .menubar.compact .toolbar-toggle-more {
+	position: absolute;
+	left: 0px;
+	top: 0px;
 	background-position: center;
 	background-repeat: no-repeat;
 	background-size: 16px;
 	cursor: pointer;
 	width: 100%;
-	height: 100%;
 }
 
 .menubar .toolbar-toggle-more {
diff --git a/src/vs/workbench/browser/parts/activitybar/activitybarPart.ts b/src/vs/workbench/browser/parts/activitybar/activitybarPart.ts
index 7775095b4e12b94f21ed9866175cd0eea78c1f01..5bc062581736f3f28a2886ca22a00f064b62ed57 100644
--- a/src/vs/workbench/browser/parts/activitybar/activitybarPart.ts
+++ b/src/vs/workbench/browser/parts/activitybar/activitybarPart.ts
@@ -450,6 +450,9 @@ export class ActivitybarPart extends Part implements IActivityBarService {
 		if (this.globalActivityActionBar) {
 			availableHeight -= (this.globalActivityActionBar.viewItems.length * ActivitybarPart.ACTION_HEIGHT); // adjust height for global actions showing
 		}
+		if (this.menubar) {
+			availableHeight -= this.menubar.clientHeight;
+		}
 		this.compositeBar.layout(new Dimension(width, availableHeight));
 	}
 
diff --git a/src/vs/workbench/browser/parts/activitybar/media/activitybarpart.css b/src/vs/workbench/browser/parts/activitybar/media/activitybarpart.css
index 9afde58f0ada8010c5c5f5be7298bf038e9702b7..7b900b9d42bd8de308c7f51bc907a88606d48b94 100644
--- a/src/vs/workbench/browser/parts/activitybar/media/activitybarpart.css
+++ b/src/vs/workbench/browser/parts/activitybar/media/activitybarpart.css
@@ -41,3 +41,8 @@
 	width: 100%;
 	height: 35px;
 }
+
+.monaco-workbench .activitybar .menubar.compact .toolbar-toggle-more {
+	width: 100%;
+	height: 35px;
+}