>I haven't had time to try your code so this is just supposition. Although the drill-down in the Deactivate event may capture the right contol the Activated event won't find the reference
>Maybe any nested ContainerControl needs to implement the same logic as the form itself (i.e store current control when focus moves away and restore focus to it when the ContainerControl itself gets focus)....

Thank you very much.
I added Grid.Focus() to code and this solves this issue.

Re-activating form selects whole grid TextBox contents. How to change this that grid TextBox restores its old selection state and cursor position (not selected or part of text selected) ?

Test code:

using System.Windows.Forms;
using System.Collections.Generic;
using System;

public class Test
{
    static void Main()
    {
        Application.Run(new MainForm());
    }
}

class MainForm : Form
{
    public MainForm()
    {
        WindowState = FormWindowState.Maximized;
        IsMdiContainer = true;
        Form frm = new Childform();
        frm.MdiParent = this;
        frm.Show();
        Form frm2 = new Childform();
        frm2.MdiParent = this;
        frm2.Show();
        frm2.Left = 2000;
    }
}

class Childform : Form
{
    DataGridView grid;
    Control LastFocus = null;

    public Childform()
    {
        ToolStripContainer tc = new ToolStripContainer();

        grid = new DataGridView();
        grid.Columns.Add(new DataGridViewTextBoxColumn());
        grid.EditMode = DataGridViewEditMode.EditOnEnter;
        grid.Top = 120;
        grid.Height = 300;
        Controls.Add(tc);
        tc.ContentPanel.Controls.Add(new MyUserControl());

        tc.ContentPanel.Controls.Add(grid);
    }

    protected override void OnActivated(EventArgs e)
    {
        base.OnActivated(e);
        if (this.LastFocus != null)
        {
            grid.Focus();
            this.LastFocus.Focus();
        }
    }

    protected override void OnDeactivate(EventArgs e)
    {
        base.OnDeactivate(e);
        this.LastFocus = this.ActiveControl;
        while (LastFocus is IContainerControl)
            LastFocus = ((IContainerControl)LastFocus).ActiveControl;
    }
}

class MyUserControl : UserControl
{
    internal MyUserControl()
    {
        Height = 100;
        Controls.Add(new TextBox());
    }
}