diff -u -p -r taxonomy_manager.o/css/taxonomy_manager.css taxonomy_manager/css/taxonomy_manager.css
--- taxonomy_manager.o/css/taxonomy_manager.css	Sat Jan 30 17:36:06 2010
+++ taxonomy_manager/css/taxonomy_manager.css	Wed Feb 16 10:03:48 2011
@@ -421,6 +421,11 @@ input.double-tree-disable {
   height: 130px;
 }
 
+#edit-taxonomy-image-upload,
+#edit-taxonomy-image-external {
+  width: 100%;
+}
+
 #taxonomy-term-data .form-item {
   margin-bottom: 0.3em;
   margin-top: 0.3em;
diff -u -p -r taxonomy_manager.o/taxonomy_manager.admin.inc taxonomy_manager/taxonomy_manager.admin.inc
--- taxonomy_manager.o/taxonomy_manager.admin.inc	Sun Jan 31 17:47:28 2010
+++ taxonomy_manager/taxonomy_manager.admin.inc	Wed Feb 16 09:22:57 2011
@@ -1763,11 +1763,22 @@ function taxonomy_manager_term_data_edit
     }
     $term = (array) taxonomy_get_term($tid);
     $term['fields'] = $param['term_data']['fields'];
+    if( module_exists('taxonomy_image') ) {
+      foreach( array('taxonomy_image_current_image_delete', 'taxonomy_image_external') as $key ) {
+        if( isset($param[$key]) ) $term[$key] = $param[$key];
+      }
+    }
     module_invoke_all('taxonomy', 'update', 'term', $term);
     module_invoke_all('taxonomy_manager_term_data_submit', $param, $values);
   }
   
-  drupal_json(array('data' => taxonomy_manager_update_term_data_form($vid, $tid, TRUE, FALSE, $msg, $is_error_msg)));
+  if( module_exists('taxonomy_image') && isset($_FILES['files']) ) {
+    // For some reason, file uploads don't like drupal_json() with its manual
+    // setting of the text/javascript HTTP header. So use this one instead.
+    print drupal_to_js(array('status' => TRUE, 'data' => taxonomy_manager_update_term_data_form($vid, $tid, TRUE, FALSE, $msg, $is_error_msg)));
+  } else {
+    drupal_json(array('data' => taxonomy_manager_update_term_data_form($vid, $tid, TRUE, FALSE, $msg, $is_error_msg)));
+  }
   //taxonomy_manager_update_term_data_form($vid, $tid, TRUE);
   exit;
 }
diff -u -p -r taxonomy_manager.o/taxonomy_manager.module taxonomy_manager/taxonomy_manager.module
--- taxonomy_manager.o/taxonomy_manager.module	Sat Jan 30 15:52:58 2010
+++ taxonomy_manager/taxonomy_manager.module	Wed Feb 16 10:01:12 2011
@@ -126,6 +126,18 @@ function taxonomy_manager_menu_alter(&$c
 }
 
 /**
+ * Implementation of hook_form_alter
+ */
+function taxonomy_manager_form_alter(&$form, $form_state, $form_id) {
+  if( $form_id == 'taxonomy_manager_form' && module_exists('taxonomy_image') ) {
+    taxonomy_image_form_alter($form['term_data'], $form_state, 'taxonomy_form_term');
+    $form['term_data']['taxonomy_image']['#tree'] = FALSE;
+    $form['term_data']['taxonomy_image']['new_image']['taxonomy_image_upload']['#size'] = 22;
+    $form['#attributes'] = array('enctype' => 'multipart/form-data');
+  }
+}
+
+/**
  * Implementation of hook_theme
  */
 function taxonomy_manager_theme() {