diff --git a/HISTORY.md b/HISTORY.md
index cd5b9f0a..a7fefc77 100644
--- a/HISTORY.md
+++ b/HISTORY.md
@@ -15,8 +15,9 @@ http://visjs.org
 - Fixed `select` event fired repeatedly when clicking an empty place on the
   Timeline, deselecting selected items).
 - Fixed initial visible window in case items exceed `zoomMax`. Thanks @Remper.
-- Option `order` is now deprecated. This was needed for performance improvements.
 - Fixed an offset in newly created items when using groups.
+- Fixed height of a group not reckoning with the height of the group label.
+- Option `order` is now deprecated. This was needed for performance improvements.
 - More examples added.
 - Minor bug fixes.
 
diff --git a/src/timeline/Timeline.js b/src/timeline/Timeline.js
index 16ae1181..2c4767ab 100644
--- a/src/timeline/Timeline.js
+++ b/src/timeline/Timeline.js
@@ -289,6 +289,9 @@ Timeline.prototype.setOptions = function (options) {
     }
   }
 
+  // force the itemSet to refresh: options like orientation and margins may be changed
+  this.itemSet.markDirty();
+
   // validate the callback functions
   var validateCallback = (function (fn) {
     if (!(this.options[fn] instanceof Function) || this.options[fn].length != 2) {
diff --git a/src/timeline/component/Group.js b/src/timeline/component/Group.js
index b8d6df9b..de95c9fa 100644
--- a/src/timeline/component/Group.js
+++ b/src/timeline/component/Group.js
@@ -126,7 +126,8 @@ Group.prototype.repaint = function repaint(range, margin, restack) {
   stack.stack(this.visibleItems, margin, restack);
   this.stackDirty = false;
   for (var i = 0, ii = this.visibleItems.length; i < ii; i++) {
-    this.visibleItems[i].repositionY();
+    var item = this.visibleItems[i];
+    item.repositionY();
   }
 
   // recalculate the height of the group
@@ -144,6 +145,7 @@ Group.prototype.repaint = function repaint(range, margin, restack) {
   else {
     height = margin.axis + margin.item;
   }
+  height = Math.max(height, this.props.label.height);
 
   // calculate actual size and position
   var foreground = this.dom.foreground;
diff --git a/src/timeline/component/ItemSet.js b/src/timeline/component/ItemSet.js
index e4651239..c937f414 100644
--- a/src/timeline/component/ItemSet.js
+++ b/src/timeline/component/ItemSet.js
@@ -152,7 +152,17 @@ ItemSet.prototype._create = function _create(){
  *                              Function to let items snap to nice dates when
  *                              dragging items.
  */
-ItemSet.prototype.setOptions = Component.prototype.setOptions;
+ItemSet.prototype.setOptions = function setOptions(options) {
+  Component.prototype.setOptions.call(this, options);
+};
+
+/**
+ * Mark the ItemSet dirty so it will refresh everything with next repaint
+ */
+ItemSet.prototype.markDirty = function markDirty() {
+  this.groupIds = [];
+  this.stackDirty = true;
+};
 
 /**
  * Hide the component from the DOM
@@ -298,26 +308,38 @@ ItemSet.prototype.repaint = function repaint() {
   // update className
   frame.className = 'itemset' + (options.className ? (' ' + asString(options.className)) : '');
 
+  // reorder the groups (if needed)
+  resized = this._orderGroups() || resized;
+
   // check whether zoomed (in that case we need to re-stack everything)
+  // TODO: would be nicer to get this as a trigger from Range
   var visibleInterval = this.range.end - this.range.start;
   var zoomed = (visibleInterval != this.lastVisibleInterval) || (this.width != this.lastWidth);
+  if (zoomed) this.stackDirty = true;
   this.lastVisibleInterval = visibleInterval;
   this.lastWidth = this.width;
 
   // repaint all groups
-  var restack = zoomed || this.stackDirty,
+  var restack = this.stackDirty,
+      firstGroup = this._firstGroup(),
+      firstMargin = {
+        item: margin.item,
+        axis: margin.axis
+      },
+      nonFirstMargin = {
+        item: margin.item,
+        axis: margin.item / 2
+      },
       height = 0,
       minHeight = margin.axis + margin.item;
   util.forEach(this.groups, function (group) {
-    resized = group.repaint(range, margin, restack) || resized;
+    var groupMargin = (group == firstGroup) ? firstMargin : nonFirstMargin;
+    resized = group.repaint(range, groupMargin, restack) || resized;
     height += group.height;
   });
   height = Math.max(height, minHeight);
   this.stackDirty = false;
 
-  // reorder the groups (if needed)
-  resized = this._orderGroups() || resized;
-
   // reposition frame
   frame.style.left    = asSize(options.left, '');
   frame.style.right   = asSize(options.right, '');
@@ -347,6 +369,19 @@ ItemSet.prototype.repaint = function repaint() {
   return resized;
 };
 
+/**
+ * Get the first group, aligned with the axis
+ * @return {Group | null} firstGroup
+ * @private
+ */
+ItemSet.prototype._firstGroup = function _firstGroup() {
+  var firstGroupIndex = (this.options.orientation == 'top') ? 0 : (this.groupIds.length - 1);
+  var firstGroupId = this.groupIds[firstGroupIndex];
+  var firstGroup = this.groups[firstGroupId] || this.groups[UNGROUPED];
+
+  return firstGroup || null;
+};
+
 /**
  * Create or delete the group holding all ungrouped items. This group is used when
  * there are no groups specified.
@@ -733,7 +768,8 @@ ItemSet.prototype._orderGroups = function () {
       // hide all groups, removes them from the DOM
       var groups = this.groups;
       groupIds.forEach(function (groupId) {
-        groups[groupId].hide();
+        var group = groups[groupId];
+        group.hide();
       });
 
       // show the groups again, attach them to the DOM in correct order