diff --git a/services/core/java/com/android/server/wm/ActivityRecord.java b/services/core/java/com/android/server/wm/ActivityRecord.java
index c47d2151a9581..c4d0342074491 100644
--- a/services/core/java/com/android/server/wm/ActivityRecord.java
+++ b/services/core/java/com/android/server/wm/ActivityRecord.java
@@ -6484,11 +6484,18 @@ final class ActivityRecord extends WindowToken implements WindowManagerService.A
         final Rect containingBounds = mTmpBounds;
         mCompatDisplayInsets.getContainerBounds(containingAppBounds, containingBounds, rotation,
                 orientation, orientationRequested, canChangeOrientation);
-        resolvedBounds.set(containingAppBounds);
+        resolvedBounds.set(containingBounds);
         // The size of floating task is fixed (only swap), so the aspect ratio is already correct.
         if (!mCompatDisplayInsets.mIsFloating) {
             applyAspectRatio(resolvedBounds, containingAppBounds, containingBounds);
         }
+        // If the bounds are restricted by fixed aspect ratio, the resolved bounds should be put in
+        // the container app bounds. Otherwise the entire container bounds are available.
+        final boolean fillContainer = resolvedBounds.equals(containingBounds);
+        if (!fillContainer) {
+            // The horizontal position should not cover insets.
+            resolvedBounds.left = containingAppBounds.left;
+        }
 
         // Use resolvedBounds to compute other override configurations such as appBounds. The bounds
         // are calculated in compat container space. The actual position on screen will be applied
@@ -6557,7 +6564,7 @@ final class ActivityRecord extends WindowToken implements WindowManagerService.A
         final int offsetX = getHorizontalCenterOffset(
                 (int) viewportW, (int) (contentW * mSizeCompatScale));
         // Above coordinates are in "@" space, now place "*" and "#" to screen space.
-        final int screenPosX = parentAppBounds.left + offsetX;
+        final int screenPosX = (fillContainer ? parentBounds.left : parentAppBounds.left) + offsetX;
         final int screenPosY = parentBounds.top;
         if (screenPosX != 0 || screenPosY != 0) {
             if (mSizeCompatBounds != null) {
@@ -7654,8 +7661,6 @@ final class ActivityRecord extends WindowToken implements WindowManagerService.A
                 // Ensure the app bounds won't overlap with insets.
                 Task.intersectWithInsetsIfFits(outAppBounds, outBounds, mNonDecorInsets[rotation]);
             }
-            // The horizontal position is centered and it should not cover insets.
-            outBounds.left = outAppBounds.left;
         }
     }
 
diff --git a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
index 6734694747091..e47792f4920ce 100644
--- a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
+++ b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
@@ -242,6 +242,26 @@ public class SizeCompatTests extends ActivityTestsBase {
         assertFalse(mActivity.mDisplayContent.isImeAttachedToApp());
     }
 
+    @Test
+    public void testAspectRatioMatchParentBoundsAndImeAttachable() {
+        setUpApp(new TestDisplayContent.Builder(mService, 1000, 2000)
+                .setSystemDecorations(true).build());
+        prepareUnresizable(2f /* maxAspect */, SCREEN_ORIENTATION_UNSPECIFIED);
+        assertFitted();
+
+        rotateDisplay(mActivity.mDisplayContent, ROTATION_90);
+        mActivity.mDisplayContent.mInputMethodTarget = addWindowToActivity(mActivity);
+        // Because the aspect ratio of display doesn't exceed the max aspect ratio of activity.
+        // The activity should still fill its parent container and IME can attach to the activity.
+        assertTrue(mActivity.matchParentBounds());
+        assertTrue(mActivity.mDisplayContent.isImeAttachedToApp());
+
+        final Rect letterboxInnerBounds = new Rect();
+        mActivity.getLetterboxInnerBounds(letterboxInnerBounds);
+        // The activity should not have letterbox.
+        assertTrue(letterboxInnerBounds.isEmpty());
+    }
+
     @Test
     public void testMoveToDifferentOrientDisplay() {
         setUpDisplaySizeWithApp(1000, 2500);
diff --git a/services/tests/wmtests/src/com/android/server/wm/TestDisplayContent.java b/services/tests/wmtests/src/com/android/server/wm/TestDisplayContent.java
index 57c750449d20c..d2a2732d60ab0 100644
--- a/services/tests/wmtests/src/com/android/server/wm/TestDisplayContent.java
+++ b/services/tests/wmtests/src/com/android/server/wm/TestDisplayContent.java
@@ -139,6 +139,7 @@ class TestDisplayContent extends DisplayContent {
             spyOn(displayPolicy);
             if (mSystemDecorations) {
                 doReturn(true).when(newDisplay).supportsSystemDecorations();
+                doReturn(true).when(displayPolicy).hasNavigationBar();
             } else {
                 doReturn(false).when(displayPolicy).hasNavigationBar();
                 doReturn(false).when(displayPolicy).hasStatusBar();