diff --git a/dlls/ddraw/ddraw.c b/dlls/ddraw/ddraw.c
index 95e9fba9011..2a4900ea7ba 100644
--- a/dlls/ddraw/ddraw.c
+++ b/dlls/ddraw/ddraw.c
@@ -4899,7 +4899,7 @@ void ddraw_update_lost_surfaces(struct ddraw *ddraw)
 
     LIST_FOR_EACH_ENTRY(surface, &ddraw->surface_list, struct ddraw_surface, surface_list_entry)
     {
-        surface->is_lost = TRUE;
+        surface->is_lost = ddraw_surface_can_be_lost(surface);
     }
     ddraw->device_state = DDRAW_DEVICE_STATE_OK;
 }
diff --git a/dlls/ddraw/ddraw_private.h b/dlls/ddraw/ddraw_private.h
index aa90972bc1d..776f61e1024 100644
--- a/dlls/ddraw/ddraw_private.h
+++ b/dlls/ddraw/ddraw_private.h
@@ -197,6 +197,7 @@ struct ddraw_surface
      */
     unsigned int is_complex_root : 1;
     unsigned int is_lost : 1;
+    unsigned int sysmem_fallback : 1;
 
     /* Surface description, for GetAttachedSurface */
     DDSURFACEDESC2          surface_desc;
@@ -637,6 +638,19 @@ static inline BOOL format_is_paletteindexed(const DDPIXELFORMAT *fmt)
     return !!(fmt->dwFlags & flags);
 }
 
+static inline BOOL ddraw_surface_can_be_lost(const struct ddraw_surface *surface)
+{
+    DWORD caps = surface->surface_desc.ddsCaps.dwCaps;
+
+    /* Testing with DDCREATE_EMULATIONONLY showed that primary surfaces and Z buffers can
+     * be lost even if created with explicit DDCAPS_SYSTEMMEMORY. Textures can or cannot be lost
+     * depending on whether _SYSTEMMEMORY was given explicitly by the application. */
+    if (!(caps & DDSCAPS_SYSTEMMEMORY) || caps & (DDSCAPS_PRIMARYSURFACE | DDSCAPS_ZBUFFER))
+        return TRUE;
+
+    return surface->sysmem_fallback;
+}
+
 /* Used for generic dumping */
 struct flag_info
 {
diff --git a/dlls/ddraw/surface.c b/dlls/ddraw/surface.c
index 20143891d33..04b398855ba 100644
--- a/dlls/ddraw/surface.c
+++ b/dlls/ddraw/surface.c
@@ -35,7 +35,8 @@ static inline struct ddraw_surface *impl_from_IDirectDrawGammaControl(IDirectDra
 
 static BOOL ddraw_surface_is_lost(const struct ddraw_surface *surface)
 {
-    return surface->ddraw->device_state != DDRAW_DEVICE_STATE_OK || surface->is_lost;
+    return ddraw_surface_can_be_lost(surface)
+            && (surface->ddraw->device_state != DDRAW_DEVICE_STATE_OK || surface->is_lost);
 }
 
 /* This is slow, of course. Also, in case of locks, we can't prevent other
@@ -5891,6 +5892,7 @@ HRESULT ddraw_surface_create(struct ddraw *ddraw, const DDSURFACEDESC2 *surface_
     struct wined3d_display_mode mode;
     DDSURFACEDESC2 *desc, *mip_desc;
     struct ddraw_texture *texture;
+    BOOL sysmem_fallback = FALSE;
     unsigned int layers = 1;
     unsigned int pitch = 0;
     BOOL reserve_memory;
@@ -6213,9 +6215,14 @@ HRESULT ddraw_surface_create(struct ddraw *ddraw, const DDSURFACEDESC2 *surface_
             if (!(ddraw->flags & DDRAW_NO3D) && SUCCEEDED(hr = wined3d_check_device_format(ddraw->wined3d,
                     ddraw->wined3d_adapter, WINED3D_DEVICE_TYPE_HAL, mode.format_id,
                     usage, bind_flags, WINED3D_RTYPE_TEXTURE_2D, wined3d_desc.format)))
+            {
                 desc->ddsCaps.dwCaps |= DDSCAPS_VIDEOMEMORY;
+            }
             else
+            {
                 desc->ddsCaps.dwCaps |= DDSCAPS_SYSTEMMEMORY;
+                sysmem_fallback = TRUE;
+            }
         }
         else if (!(desc->ddsCaps.dwCaps & DDSCAPS_TEXTURE))
         {
@@ -6389,6 +6396,7 @@ HRESULT ddraw_surface_create(struct ddraw *ddraw, const DDSURFACEDESC2 *surface_
     root = wined3d_texture_get_sub_resource_parent(wined3d_texture, 0);
     wined3d_texture_decref(wined3d_texture);
     root->is_complex_root = TRUE;
+    root->sysmem_fallback = sysmem_fallback;
     texture->root = root;
     wined3d_device_incref(texture->wined3d_device = ddraw->wined3d_device);
 
@@ -6412,6 +6420,7 @@ HRESULT ddraw_surface_create(struct ddraw *ddraw, const DDSURFACEDESC2 *surface_
         for (j = 0; j < levels; ++j)
         {
             mip = wined3d_texture_get_sub_resource_parent(wined3d_texture, i * levels + j);
+            mip->sysmem_fallback = sysmem_fallback;
             mip_desc = &mip->surface_desc;
             if (desc->ddsCaps.dwCaps & DDSCAPS_MIPMAP)
                 mip_desc->u2.dwMipMapCount = levels - j;
@@ -6520,6 +6529,7 @@ HRESULT ddraw_surface_create(struct ddraw *ddraw, const DDSURFACEDESC2 *surface_
             }
 
             last = wined3d_texture_get_sub_resource_parent(wined3d_texture, 0);
+            last->sysmem_fallback = sysmem_fallback;
             wined3d_texture_decref(wined3d_texture);
             texture->root = last;
             wined3d_device_incref(texture->wined3d_device = ddraw->wined3d_device);
diff --git a/dlls/ddraw/tests/ddraw7.c b/dlls/ddraw/tests/ddraw7.c
index e44308761b0..d3ea36e9808 100644
--- a/dlls/ddraw/tests/ddraw7.c
+++ b/dlls/ddraw/tests/ddraw7.c
@@ -9269,6 +9269,7 @@ static void test_vb_writeonly(void)
 static void test_lost_device(void)
 {
     IDirectDrawSurface7 *surface, *back_buffer;
+    IDirectDrawSurface7 *sysmem_surface;
     DDSURFACEDESC2 surface_desc;
     HWND window1, window2;
     IDirectDraw7 *ddraw;
@@ -9284,7 +9285,7 @@ static void test_lost_device(void)
     ddraw = create_ddraw();
     ok(!!ddraw, "Failed to create a ddraw object.\n");
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_EXCLUSIVE | DDSCL_FULLSCREEN);
-    ok(SUCCEEDED(hr), "Failed to set cooperative level, hr %#x.\n", hr);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     memset(&surface_desc, 0, sizeof(surface_desc));
     surface_desc.dwSize = sizeof(surface_desc);
@@ -9292,7 +9293,16 @@ static void test_lost_device(void)
     surface_desc.ddsCaps.dwCaps = DDSCAPS_PRIMARYSURFACE | DDSCAPS_COMPLEX | DDSCAPS_FLIP;
     U5(surface_desc).dwBackBufferCount = 1;
     hr = IDirectDraw7_CreateSurface(ddraw, &surface_desc, &surface, NULL);
-    ok(SUCCEEDED(hr), "Failed to create surface, hr %#x.\n", hr);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+
+    memset(&surface_desc, 0, sizeof(surface_desc));
+    surface_desc.dwSize = sizeof(surface_desc);
+    surface_desc.dwFlags = DDSD_CAPS | DDSD_WIDTH | DDSD_HEIGHT;
+    surface_desc.ddsCaps.dwCaps = DDSCAPS_OFFSCREENPLAIN | DDSCAPS_SYSTEMMEMORY;
+    surface_desc.dwWidth = 100;
+    surface_desc.dwHeight = 100;
+    hr = IDirectDraw7_CreateSurface(ddraw, &surface_desc, &sysmem_surface, NULL);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_TestCooperativeLevel(ddraw);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9300,6 +9310,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     ret = SetForegroundWindow(GetDesktopWindow());
     ok(ret, "Failed to set foreground window.\n");
@@ -9309,6 +9321,8 @@ static void test_lost_device(void)
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     ret = SetForegroundWindow(window1);
     ok(ret, "Failed to set foreground window.\n");
@@ -9318,6 +9332,8 @@ static void test_lost_device(void)
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_RestoreAllSurfaces(ddraw);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9327,6 +9343,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_NORMAL);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9336,6 +9354,8 @@ static void test_lost_device(void)
     todo_wine ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     todo_wine ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     /* Trying to restore the primary will crash, probably because flippable
      * surfaces can't exist in DDSCL_NORMAL. */
@@ -9345,12 +9365,16 @@ static void test_lost_device(void)
     surface_desc.dwFlags = DDSD_CAPS;
     surface_desc.ddsCaps.dwCaps = DDSCAPS_PRIMARYSURFACE;
     hr = IDirectDraw7_CreateSurface(ddraw, &surface_desc, &surface, NULL);
-    ok(SUCCEEDED(hr), "Failed to create surface, hr %#x.\n", hr);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_TestCooperativeLevel(ddraw);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(surface);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     ret = SetForegroundWindow(GetDesktopWindow());
     ok(ret, "Failed to set foreground window.\n");
@@ -9358,6 +9382,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(surface);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     ret = SetForegroundWindow(window1);
     ok(ret, "Failed to set foreground window.\n");
@@ -9365,6 +9391,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(surface);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_EXCLUSIVE | DDSCL_FULLSCREEN);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9372,6 +9400,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(surface);
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_RestoreAllSurfaces(ddraw);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9379,6 +9409,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(surface);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     IDirectDrawSurface7_Release(surface);
     memset(&surface_desc, 0, sizeof(surface_desc));
@@ -9387,7 +9419,7 @@ static void test_lost_device(void)
     surface_desc.ddsCaps.dwCaps = DDSCAPS_PRIMARYSURFACE | DDSCAPS_COMPLEX | DDSCAPS_FLIP;
     U5(surface_desc).dwBackBufferCount = 1;
     hr = IDirectDraw7_CreateSurface(ddraw, &surface_desc, &surface, NULL);
-    ok(SUCCEEDED(hr), "Failed to create surface, hr %#x.\n", hr);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_EXCLUSIVE | DDSCL_FULLSCREEN);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9397,6 +9429,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_NORMAL | DDSCL_FULLSCREEN);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9406,6 +9440,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_NOEXCLUSIVEMODE, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window1, DDSCL_NORMAL);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9415,6 +9451,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_NOEXCLUSIVEMODE, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window2, DDSCL_NORMAL);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9424,6 +9462,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_NOEXCLUSIVEMODE, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window2, DDSCL_NORMAL | DDSCL_FULLSCREEN);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9433,6 +9473,8 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_NOEXCLUSIVEMODE, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     hr = IDirectDraw7_SetCooperativeLevel(ddraw, window2, DDSCL_EXCLUSIVE | DDSCL_FULLSCREEN);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
@@ -9442,6 +9484,8 @@ static void test_lost_device(void)
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_Flip(surface, NULL, DDFLIP_WAIT);
     ok(hr == DDERR_SURFACELOST, "Got unexpected hr %#x.\n", hr);
+    hr = IDirectDrawSurface7_IsLost(sysmem_surface);
+    ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
 
     memset(&caps, 0, sizeof(caps));
     caps.dwCaps = DDSCAPS_FLIP;
@@ -9454,8 +9498,10 @@ static void test_lost_device(void)
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
     hr = IDirectDrawSurface7_IsLost(back_buffer);
     ok(hr == DD_OK, "Got unexpected hr %#x.\n", hr);
+
     IDirectDrawSurface7_Release(back_buffer);
 
+    IDirectDrawSurface7_Release(sysmem_surface);
     IDirectDrawSurface7_Release(surface);
     refcount = IDirectDraw7_Release(ddraw);
     ok(!refcount, "Got unexpected refcount %u.\n", refcount);