diff --git a/docs/CHANGELOG.txt b/docs/CHANGELOG.txt
index 673ec1c2e..b3a64111e 100644
--- a/docs/CHANGELOG.txt
+++ b/docs/CHANGELOG.txt
@@ -87,6 +87,8 @@ Other changes:
   - Mostly legacy behavior when used inside old Columns(), as we favored that idiom back then,
     only different is left position follows indentation level, to match calling a Separator()
     inside or outside Columns().
+- Drag and Drop: Rework drop target highlight: reduce rectangle to its visible portion, and
+  then expand slightly. A full rectangle is always visible and it may protrude slightly. (#4281, #3272)
 - Drag and Drop: Fixed submitting a tooltip from drop target location when using AcceptDragDropPayload()
   with ImGuiDragDropFlags_AcceptNoPreviewTooltip and submitting a tooltip manually.
 - Tables: Fixed an edge-case when no columns are visible + table scrollbar is visible + user
diff --git a/imgui.cpp b/imgui.cpp
index 77bc5f17c..23363af36 100644
--- a/imgui.cpp
+++ b/imgui.cpp
@@ -12656,7 +12656,6 @@ bool ImGui::IsDragDropPayloadBeingAccepted()
 const ImGuiPayload* ImGui::AcceptDragDropPayload(const char* type, ImGuiDragDropFlags flags)
 {
     ImGuiContext& g = *GImGui;
-    ImGuiWindow* window = g.CurrentWindow;
     ImGuiPayload& payload = g.DragDropPayload;
     IM_ASSERT(g.DragDropActive);                        // Not called between BeginDragDropTarget() and EndDragDropTarget() ?
     IM_ASSERT(payload.DataFrameCount != -1);            // Forgot to call EndDragDropTarget() ?
@@ -12680,7 +12679,7 @@ const ImGuiPayload* ImGui::AcceptDragDropPayload(const char* type, ImGuiDragDrop
     payload.Preview = was_accepted_previously;
     flags |= (g.DragDropSourceFlags & ImGuiDragDropFlags_AcceptNoDrawDefaultRect); // Source can also inhibit the preview (useful for external sources that live for 1 frame)
     if (!(flags & ImGuiDragDropFlags_AcceptNoDrawDefaultRect) && payload.Preview)
-        window->DrawList->AddRect(r.Min - ImVec2(3.5f,3.5f), r.Max + ImVec2(3.5f, 3.5f), GetColorU32(ImGuiCol_DragDropTarget), 0.0f, 0, 2.0f);
+        RenderDragDropTargetRect(r);
 
     g.DragDropAcceptFrameCount = g.FrameCount;
     payload.Delivery = was_accepted_previously && !IsMouseDown(g.DragDropMouseButton); // For extern drag sources affecting OS window focus, it's easier to just test !IsMouseDown() instead of IsMouseReleased()
@@ -12691,10 +12690,20 @@ const ImGuiPayload* ImGui::AcceptDragDropPayload(const char* type, ImGuiDragDrop
     return &payload;
 }
 
-// FIXME-DRAGDROP: Settle on a proper default visuals for drop target.
+// FIXME-STYLE FIXME-DRAGDROP: Settle on a proper default visuals for drop target.
 void ImGui::RenderDragDropTargetRect(const ImRect& bb)
 {
-    GetWindowDrawList()->AddRect(bb.Min - ImVec2(3.5f, 3.5f), bb.Max + ImVec2(3.5f, 3.5f), GetColorU32(ImGuiCol_DragDropTarget), 0.0f, 0, 2.0f);
+    ImGuiContext& g = *GImGui;
+    ImGuiWindow* window = g.CurrentWindow;
+    ImRect bb_display = bb;
+    bb_display.ClipWith(window->ClipRect); // Clip THEN expand so we have a way to visualize that target is not entirely visible.
+    bb_display.Expand(3.5f);
+    bool push_clip_rect = !window->ClipRect.Contains(bb_display);
+    if (push_clip_rect)
+        window->DrawList->PushClipRectFullScreen();
+    window->DrawList->AddRect(bb_display.Min, bb_display.Max, GetColorU32(ImGuiCol_DragDropTarget), 0.0f, 0, 2.0f);
+    if (push_clip_rect)
+        window->DrawList->PopClipRect();
 }
 
 const ImGuiPayload* ImGui::GetDragDropPayload()
diff --git a/imgui_demo.cpp b/imgui_demo.cpp
index e66b10e3a..8cc441082 100644
--- a/imgui_demo.cpp
+++ b/imgui_demo.cpp
@@ -2437,6 +2437,7 @@ static void ShowDemoWindowWidgets()
                     ImGuiDragDropFlags drop_target_flags = ImGuiDragDropFlags_AcceptBeforeDelivery | ImGuiDragDropFlags_AcceptNoPreviewTooltip;
                     if (const ImGuiPayload* payload = ImGui::AcceptDragDropPayload(IMGUI_PAYLOAD_TYPE_COLOR_4F, drop_target_flags))
                     {
+                        IM_UNUSED(payload);
                         ImGui::SetMouseCursor(ImGuiMouseCursor_NotAllowed);
                         ImGui::BeginTooltip();
                         ImGui::Text("Cannot drop here!");