diff --git a/subsys/modem/backends/modem_backend_tty.c b/subsys/modem/backends/modem_backend_tty.c
index b8864fc3d91..8375183be48 100644
--- a/subsys/modem/backends/modem_backend_tty.c
+++ b/subsys/modem/backends/modem_backend_tty.c
@@ -73,8 +73,11 @@ static int modem_backend_tty_open(void *data)
 static int modem_backend_tty_transmit(void *data, const uint8_t *buf, size_t size)
 {
 	struct modem_backend_tty *backend = (struct modem_backend_tty *)data;
+	int ret;
 
-	return write(backend->tty_fd, buf, size);
+	ret = write(backend->tty_fd, buf, size);
+	modem_pipe_notify_transmit_idle(&backend->pipe);
+	return ret;
 }
 
 static int modem_backend_tty_receive(void *data, uint8_t *buf, size_t size)
diff --git a/tests/subsys/modem/backends/tty/src/main.c b/tests/subsys/modem/backends/tty/src/main.c
index 49a1841486a..96ebdb2763d 100644
--- a/tests/subsys/modem/backends/tty/src/main.c
+++ b/tests/subsys/modem/backends/tty/src/main.c
@@ -22,7 +22,8 @@
 
 #define TEST_MODEM_BACKEND_TTY_PIPE_EVENT_OPENED_BIT (0)
 #define TEST_MODEM_BACKEND_TTY_PIPE_EVENT_RRDY_BIT   (1)
-#define TEST_MODEM_BACKEND_TTY_PIPE_EVENT_CLOSED_BIT (2)
+#define TEST_MODEM_BACKEND_TTY_PIPE_EVENT_TIDLE_BIT  (2)
+#define TEST_MODEM_BACKEND_TTY_PIPE_EVENT_CLOSED_BIT (3)
 
 #define TEST_MODEM_BACKEND_TTY_OP_DELAY (K_MSEC(1000))
 
@@ -72,6 +73,10 @@ static void modem_pipe_callback_handler(struct modem_pipe *pipe, enum modem_pipe
 		atomic_set_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_RRDY_BIT);
 		break;
 
+	case MODEM_PIPE_EVENT_TRANSMIT_IDLE:
+		atomic_set_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_TIDLE_BIT);
+		break;
+
 	case MODEM_PIPE_EVENT_CLOSED:
 		atomic_set_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_CLOSED_BIT);
 		break;
@@ -122,9 +127,13 @@ static void test_modem_backend_tty_teardown(void *f)
 /*************************************************************************************************/
 ZTEST(modem_backend_tty_suite, test_close_open)
 {
+	bool result;
+
 	zassert_ok(modem_pipe_close(tty_pipe), "Failed to close pipe");
 	zassert_ok(modem_pipe_close(tty_pipe), "Pipe should already be closed");
 	zassert_ok(modem_pipe_open(tty_pipe), "Failed to open pipe");
+	result = atomic_test_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_TIDLE_BIT);
+	zassert_true(result, "Transmit idle event should be set");
 	zassert_ok(modem_pipe_open(tty_pipe), "Pipe should already be open");
 }
 
@@ -172,12 +181,19 @@ ZTEST(modem_backend_tty_suite, test_transmit)
 {
 	int ret;
 	char msg[] = "Test me buddy 2";
+	bool result;
+
+	result = atomic_test_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_TIDLE_BIT);
+	zassert_false(result, "Transmit idle event should not be set");
 
 	ret = modem_pipe_transmit(tty_pipe, msg, sizeof(msg));
 	zassert_true(ret == sizeof(msg), "Failed to transmit using pipe");
 
 	k_sleep(TEST_MODEM_BACKEND_TTY_OP_DELAY);
 
+	result = atomic_test_bit(&tty_pipe_events, TEST_MODEM_BACKEND_TTY_PIPE_EVENT_TIDLE_BIT);
+	zassert_true(result, "Transmit idle event should be set");
+
 	ret = read(primary_fd, buffer1, sizeof(buffer1));
 	zassert_true(ret == sizeof(msg), "Read incorrect number of bytes");
 	ret = memcmp(msg, buffer1, sizeof(msg));