diff --git a/src/apps/deskbar/ExpandoMenuBar.cpp b/src/apps/deskbar/ExpandoMenuBar.cpp
index 5272fe705a..8aafe4eb25 100644
--- a/src/apps/deskbar/ExpandoMenuBar.cpp
+++ b/src/apps/deskbar/ExpandoMenuBar.cpp
@@ -78,7 +78,8 @@ TExpandoMenuBar::TExpandoMenuBar(TBarView *bar, BRect frame, const char *name,
 	fShowTeamExpander(static_cast<TBarApp *>(be_app)->Settings()->superExpando),
 	fExpandNewTeams(static_cast<TBarApp *>(be_app)->Settings()->expandNewTeams),
 	fBarView(bar),
-	fFirstApp(0)
+	fFirstApp(0),
+	fPreviousDragTargetItem(NULL)
 {
 #ifdef DOUBLECLICKBRINGSTOFRONT
 	fLastClickItem = -1;
@@ -392,8 +393,8 @@ void
 TExpandoMenuBar::MouseMoved(BPoint where, uint32 code, const BMessage *message)
 {
 	if (!message) {
-		//	force a cleanup
-		fBarView->DragStop(true);
+		// force a cleanup
+		_FinishedDrag();
 		BMenuBar::MouseMoved(where, code, message);
 		return;
 	}
@@ -403,26 +404,58 @@ TExpandoMenuBar::MouseMoved(BPoint where, uint32 code, const BMessage *message)
 		|| Window()->CurrentMessage()->FindInt32("buttons", (int32*)&buttons) < B_OK)
 		buttons = 0;
 
+	if (buttons == 0)
+		return;
+
 	switch (code) {
 		case B_ENTERED_VIEW:
-			if (message && buttons != 0) {
-				fBarView->CacheDragData(message);
-				MouseDown(where);
-			}
+			// fPreviousDragTargetItem should always be NULL here anyways.
+			if (fPreviousDragTargetItem)
+				_FinishedDrag();
+
+			fBarView->CacheDragData(message);
+			fPreviousDragTargetItem = NULL;
 			break;
 
+		case B_OUTSIDE_VIEW:
+			// NOTE: Should not be here, but for the sake of defensive
+			// programming...
 		case B_EXITED_VIEW:
-			if (fBarView->Dragging() && buttons != 0) {
-				if (!TeamItemAtPoint(where)
-					&& !InBeMenu(where)
-					&& (fSeparatorItem && !fSeparatorItem->Frame().Contains(where))
-					&& !Frame().Contains(where)) {
-					fBarView->DragStop();
+			_FinishedDrag();
+			break;
+
+		case B_INSIDE_VIEW:
+			if (fBarView->Dragging()) {
+				TTeamMenuItem* item = NULL;
+				for (int32 i = 0; i < CountItems(); i++) {
+					BMenuItem* _item = ItemAt(i);
+					if (_item->Frame().Contains(where)) {
+						item = dynamic_cast<TTeamMenuItem*>(_item);
+						break;
+					}
 				}
+				if (item == fPreviousDragTargetItem)
+					break;
+				if (fPreviousDragTargetItem != NULL)
+					fPreviousDragTargetItem->SetOverrideSelected(false);
+				if (item != NULL)
+					item->SetOverrideSelected(true);
+				fPreviousDragTargetItem = item;
 			}
 			break;
 	}
-	BMenuBar::MouseMoved(where, code, message);
+}
+
+
+void
+TExpandoMenuBar::MouseUp(BPoint where)
+{
+	if (!fBarView->Dragging()) {
+		BMenuBar::MouseUp(where);
+		return;
+	}
+
+	_FinishedDrag(true);
 }
 
 
@@ -816,3 +849,17 @@ TExpandoMenuBar::monitor_team_windows(void *arg)
 	return B_OK;
 }
 
+
+void
+TExpandoMenuBar::_FinishedDrag(bool invoke)
+{
+	if (fPreviousDragTargetItem != NULL) {
+		if (invoke)
+			fPreviousDragTargetItem->Invoke();
+		fPreviousDragTargetItem->SetOverrideSelected(false);
+		fPreviousDragTargetItem = NULL;
+	}
+	if (!invoke && fBarView->Dragging())
+		fBarView->DragStop(true);
+}
+
diff --git a/src/apps/deskbar/ExpandoMenuBar.h b/src/apps/deskbar/ExpandoMenuBar.h
index dbd154b501..beb8b33585 100644
--- a/src/apps/deskbar/ExpandoMenuBar.h
+++ b/src/apps/deskbar/ExpandoMenuBar.h
@@ -66,6 +66,7 @@ class TExpandoMenuBar : public BMenuBar {
 		virtual void MessageReceived(BMessage *message);
 		virtual void MouseDown(BPoint where);
 		virtual void MouseMoved(BPoint where, uint32 code, const BMessage *);
+		virtual void MouseUp(BPoint where);
 
 		virtual void Draw(BRect update);
 		virtual void DrawBackground(BRect update);
@@ -88,7 +89,7 @@ class TExpandoMenuBar : public BMenuBar {
 		void AddTeam(team_id team, const char *signature);
 		void RemoveTeam(team_id team, bool partial);
 
-		void Hilite(drag_and_drop_selection which);
+		void _FinishedDrag(bool invoke = false);
 
 		bool fVertical;
 		bool fOverflow;
@@ -102,6 +103,7 @@ class TExpandoMenuBar : public BMenuBar {
 
 		TBarMenuTitle *fBeMenuItem;
 		TTeamMenuItem *fSeparatorItem;
+		TTeamMenuItem *fPreviousDragTargetItem;
 
 #ifdef DOUBLECLICKBRINGSTOFRONT
 		int32 fLastClickItem;
diff --git a/src/apps/deskbar/TeamMenuItem.cpp b/src/apps/deskbar/TeamMenuItem.cpp
index 40665c7c73..0ab7e80288 100644
--- a/src/apps/deskbar/TeamMenuItem.cpp
+++ b/src/apps/deskbar/TeamMenuItem.cpp
@@ -101,6 +101,7 @@ TTeamMenuItem::InitData(BList *team, BBitmap *icon, char *name, char *sig,
 
 	fOverrideWidth = width;
 	fOverrideHeight = height;
+	fOverriddenSelected = false;
 
 	fDrawLabel = drawLabel;
 	fVertical = vertical;
@@ -156,6 +157,14 @@ TTeamMenuItem::SetOverrideHeight(float height)
 }
 
 
+void
+TTeamMenuItem::SetOverrideSelected(bool selected)
+{
+	fOverriddenSelected = selected;
+	Highlight(selected);
+}
+
+
 float
 TTeamMenuItem::LabelWidth() const
 {
@@ -225,14 +234,14 @@ TTeamMenuItem::Draw()
 	//	if not selected or being tracked on, fill with gray
 	TBarView *barview = (static_cast<TBarApp *>(be_app))->BarView();
 	bool canHandle = !barview->Dragging() || barview->AppCanHandleTypes(Signature());
-	if (!IsSelected() && !menu->IsRedrawAfterSticky() || !canHandle || !IsEnabled()) {
+	if (!_IsSelected() && !menu->IsRedrawAfterSticky() || !canHandle || !IsEnabled()) {
 		frame.InsetBy(1, 1);
 		menu->SetHighColor(menuColor);
 		menu->FillRect(frame);
 	}
 
 	//	draw the gray, unselected item, border
-	if (!IsSelected() || !IsEnabled()) {
+	if (!_IsSelected() || !IsEnabled()) {
 		rgb_color shadow = tint_color(menuColor, B_DARKEN_1_TINT);
 		rgb_color light = tint_color(menuColor, B_LIGHTEN_2_TINT);
 
@@ -257,7 +266,7 @@ TTeamMenuItem::Draw()
 	}
 
 	//	if selected or being tracked on, fill with the hilite gray color
-	if (IsEnabled() && IsSelected() && !menu->IsRedrawAfterSticky() && canHandle) {
+	if (IsEnabled() && _IsSelected() && !menu->IsRedrawAfterSticky() && canHandle) {
 		// fill
 		menu->SetHighColor(tint_color(menuColor, B_HIGHLIGHT_BACKGROUND_TINT));
 		menu->FillRect(frame);
@@ -415,7 +424,7 @@ TTeamMenuItem::DrawContentLabel()
 	TBarView *barview = (static_cast<TBarApp *>(be_app))->BarView();
 	bool canHandle = !barview->Dragging()
 		|| barview->AppCanHandleTypes(Signature());
-	if (IsSelected() && IsEnabled() && canHandle)
+	if (_IsSelected() && IsEnabled() && canHandle)
 		menu->SetLowColor(tint_color(menu->ViewColor(),
 			B_HIGHLIGHT_BACKGROUND_TINT));
 	else
@@ -521,3 +530,10 @@ TTeamMenuItem::ExpanderBounds() const
 	return bounds;
 }
 
+
+bool
+TTeamMenuItem::_IsSelected() const
+{
+	return IsSelected() || fOverriddenSelected;
+}
+
diff --git a/src/apps/deskbar/TeamMenuItem.h b/src/apps/deskbar/TeamMenuItem.h
index 685b93788b..2cc74c36d0 100644
--- a/src/apps/deskbar/TeamMenuItem.h
+++ b/src/apps/deskbar/TeamMenuItem.h
@@ -59,6 +59,7 @@ class TTeamMenuItem : public BMenuItem {
 
 		void SetOverrideWidth(float width);
 		void SetOverrideHeight(float height);
+		void SetOverrideSelected(bool selected);
 
 		bool IsExpanded();
 		void ToggleExpandState(bool resizeWindow);
@@ -82,6 +83,8 @@ class TTeamMenuItem : public BMenuItem {
 			float width = -1.0f, float height = -1.0f,
 			bool drawLabel = true,bool vertical=true);
 
+		bool _IsSelected() const;
+
 		BList *fTeam;
 		BBitmap *fIcon;
 		char *fName;
@@ -96,6 +99,7 @@ class TTeamMenuItem : public BMenuItem {
 		bool fVertical;
 
 		bool fExpanded;
+		bool fOverriddenSelected;
 };
 
 #endif /* TEAMMENUITEM_H */