diff --git a/packages/dockview/src/__tests__/groupview/groupview.spec.ts b/packages/dockview/src/__tests__/groupview/groupview.spec.ts
index 838d7affa..15a6bea24 100644
--- a/packages/dockview/src/__tests__/groupview/groupview.spec.ts
+++ b/packages/dockview/src/__tests__/groupview/groupview.spec.ts
@@ -16,16 +16,14 @@ import {
     GroupOptions,
     Groupview,
 } from '../../groupview/groupview';
-import {
-    DockviewPanelApi,
-    DockviewPanelApiImpl,
-} from '../../api/groupPanelApi';
+import { DockviewPanelApi } from '../../api/groupPanelApi';
 import {
     DefaultGroupPanelView,
     IGroupPanelView,
 } from '../../dockview/defaultGroupPanelView';
 import { GroupPanel } from '../../groupview/groupviewPanel';
-import { DockviewApi } from '../../api/component.api';
+import { fireEvent } from '@testing-library/dom';
+import { LocalSelectionTransfer, PanelTransfer } from '../../dnd/dataTransfer';
 
 class Watermark implements IWatermarkRenderer {
     public readonly element = document.createElement('div');
@@ -134,7 +132,7 @@ class TestHeaderPart implements ITabRenderer {
     }
 }
 
-class TestPanel implements IDockviewPanel {
+export class TestPanel implements IDockviewPanel {
     private _view: IGroupPanelView | undefined;
     private _group: GroupPanel | undefined;
     private _params: IGroupPanelInitParameters;
@@ -148,7 +146,7 @@ class TestPanel implements IDockviewPanel {
     }
 
     get group() {
-        return this._group;
+        return this._group!;
     }
 
     get view() {
@@ -544,7 +542,7 @@ describe('groupview', () => {
         );
         const contentContainer = groupviewContainer
             .getElementsByClassName('content-container')
-            .item(0).childNodes;
+            .item(0)!.childNodes;
 
         const panel1 = new TestPanel('id_1', null);
 
@@ -568,4 +566,246 @@ describe('groupview', () => {
         expect(contentContainer.length).toBe(1);
         expect(contentContainer.item(0)).toBe(panel3.view.content.element);
     });
+
+    test('that should not show drop target is external event', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+                options: {
+                    showDndOverlay: jest.fn(),
+                },
+                getPanel: jest.fn(),
+            };
+        });
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const container = document.createElement('div');
+        const cut = new Groupview(
+            container,
+            accessor,
+            'groupviewid',
+            {},
+            new groupPanelMock() as GroupPanel
+        );
+
+        const element = container
+            .getElementsByClassName('content-container')
+            .item(0)!;
+
+        jest.spyOn(element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(element, 'clientWidth', 'get').mockImplementation(() => 100);
+
+        fireEvent.dragEnter(element);
+        fireEvent.dragOver(element);
+
+        expect(accessor.options.showDndOverlay).toBeCalledTimes(1);
+
+        expect(
+            element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that should not show drop target if dropping on self', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+                options: {
+                    showDndOverlay: jest.fn(),
+                },
+                getPanel: jest.fn(),
+                doSetGroupActive: jest.fn(),
+            };
+        });
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const container = document.createElement('div');
+        const cut = new Groupview(
+            container,
+            accessor,
+            'groupviewid',
+            {},
+            new groupPanelMock() as GroupPanel
+        );
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+
+        const element = container
+            .getElementsByClassName('content-container')
+            .item(0)!;
+
+        jest.spyOn(element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(element, 'clientWidth', 'get').mockImplementation(() => 100);
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'groupviewid', 'panel1')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(element);
+        fireEvent.dragOver(element);
+
+        expect(accessor.options.showDndOverlay).toBeCalledTimes(0);
+
+        expect(
+            element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that should allow drop when not dropping on self for same component id', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+                options: {
+                    showDndOverlay: jest.fn(),
+                },
+                getPanel: jest.fn(),
+                doSetGroupActive: jest.fn(),
+            };
+        });
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const container = document.createElement('div');
+        const cut = new Groupview(
+            container,
+            accessor,
+            'groupviewid',
+            {},
+            new groupPanelMock() as GroupPanel
+        );
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+        cut.openPanel(new TestPanel('panel2', jest.fn() as any));
+
+        const element = container
+            .getElementsByClassName('content-container')
+            .item(0)!;
+
+        jest.spyOn(element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(element, 'clientWidth', 'get').mockImplementation(() => 100);
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'groupviewid', 'panel1')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(element);
+        fireEvent.dragOver(element);
+
+        expect(accessor.options.showDndOverlay).toBeCalledTimes(0);
+
+        expect(
+            element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(1);
+    });
+
+    test('that should not allow drop when not dropping for different component id', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+                options: {
+                    showDndOverlay: jest.fn(),
+                },
+                getPanel: jest.fn(),
+                doSetGroupActive: jest.fn(),
+            };
+        });
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const container = document.createElement('div');
+        const cut = new Groupview(
+            container,
+            accessor,
+            'groupviewid',
+            {},
+            new groupPanelMock() as GroupPanel
+        );
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+        cut.openPanel(new TestPanel('panel2', jest.fn() as any));
+
+        const element = container
+            .getElementsByClassName('content-container')
+            .item(0)!;
+
+        jest.spyOn(element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(element, 'clientWidth', 'get').mockImplementation(() => 100);
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('anothercomponentid', 'groupviewid', 'panel1')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(element);
+        fireEvent.dragOver(element);
+
+        expect(accessor.options.showDndOverlay).toBeCalledTimes(1);
+
+        expect(
+            element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
 });
diff --git a/packages/dockview/src/__tests__/groupview/tab.spec.ts b/packages/dockview/src/__tests__/groupview/tab.spec.ts
index a1e3c762e..abe02fcf9 100644
--- a/packages/dockview/src/__tests__/groupview/tab.spec.ts
+++ b/packages/dockview/src/__tests__/groupview/tab.spec.ts
@@ -1,3 +1,8 @@
+import { fireEvent } from '@testing-library/dom';
+import { LocalSelectionTransfer, PanelTransfer } from '../../dnd/dataTransfer';
+import { DockviewComponent } from '../../dockview/dockviewComponent';
+import { Groupview } from '../../groupview/groupview';
+import { GroupPanel } from '../../groupview/groupviewPanel';
 import { Tab } from '../../groupview/tab';
 
 describe('tab', () => {
@@ -22,4 +27,251 @@ describe('tab', () => {
         cut.setActive(false);
         expect(cut.element.className).toBe('tab inactive-tab');
     });
+
+    test('that an external event does not render a drop target and calls through to the group model', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new Tab('panelId', accessor, groupPanel);
+
+        jest.spyOn(cut.element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(cut.element, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        fireEvent.dragEnter(cut.element);
+        fireEvent.dragOver(cut.element);
+
+        expect(groupView.canDisplayOverlay).toBeCalled();
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that if you drag over yourself no drop target is shown', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new Tab('panel1', accessor, groupPanel);
+
+        jest.spyOn(cut.element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(cut.element, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'anothergroupid', 'panel1')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(cut.element);
+        fireEvent.dragOver(cut.element);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(0);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that if you drag over another tab a drop target is shown', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new Tab('panel1', accessor, groupPanel);
+
+        jest.spyOn(cut.element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(cut.element, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'anothergroupid', 'panel2')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(cut.element);
+        fireEvent.dragOver(cut.element);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(0);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(1);
+    });
+
+    test('that dropping on a tab with the same id but from a different component should not render a drop over and call through to the group model', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new Tab('panel1', accessor, groupPanel);
+
+        jest.spyOn(cut.element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(cut.element, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [
+                new PanelTransfer(
+                    'anothercomponentid',
+                    'anothergroupid',
+                    'panel1'
+                ),
+            ],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(cut.element);
+        fireEvent.dragOver(cut.element);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(1);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that dropping on a tab from a different component should not render a drop over and call through to the group model', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new Tab('panel1', accessor, groupPanel);
+
+        jest.spyOn(cut.element, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(cut.element, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [
+                new PanelTransfer(
+                    'anothercomponentid',
+                    'anothergroupid',
+                    'panel2'
+                ),
+            ],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(cut.element);
+        fireEvent.dragOver(cut.element);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(1);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
 });
diff --git a/packages/dockview/src/__tests__/groupview/titlebar/tabsContainer.spec.ts b/packages/dockview/src/__tests__/groupview/titlebar/tabsContainer.spec.ts
new file mode 100644
index 000000000..ab1dc25f2
--- /dev/null
+++ b/packages/dockview/src/__tests__/groupview/titlebar/tabsContainer.spec.ts
@@ -0,0 +1,305 @@
+import { DockviewComponent } from '../../../dockview/dockviewComponent';
+import { GroupPanel } from '../../../groupview/groupviewPanel';
+import { TabsContainer } from '../../../groupview/titlebar/tabsContainer';
+import { fireEvent } from '@testing-library/dom';
+import { Groupview } from '../../../groupview/groupview';
+import {
+    LocalSelectionTransfer,
+    PanelTransfer,
+} from '../../../dnd/dataTransfer';
+import { TestPanel } from '../groupview.spec';
+
+describe('tabsContainer', () => {
+    test('that an external event does not render a drop target and calls through to the group mode', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {};
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new TabsContainer(accessor, groupPanel, {});
+
+        const emptySpace = cut.element
+            .getElementsByClassName('void-container')
+            .item(0);
+
+        if (!emptySpace) {
+            fail('element not found');
+        }
+
+        jest.spyOn(emptySpace, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(emptySpace, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        fireEvent.dragEnter(emptySpace);
+        fireEvent.dragOver(emptySpace);
+
+        expect(groupView.canDisplayOverlay).toBeCalled();
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that a drag over event from another tab should render a drop target', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new TabsContainer(accessor, groupPanel, {});
+
+        const emptySpace = cut.element
+            .getElementsByClassName('void-container')
+            .item(0);
+
+        if (!emptySpace) {
+            fail('element not found');
+        }
+
+        jest.spyOn(emptySpace, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(emptySpace, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [
+                new PanelTransfer(
+                    'testcomponentid',
+                    'anothergroupid',
+                    'anotherpanelid'
+                ),
+            ],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(emptySpace);
+        fireEvent.dragOver(emptySpace);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(0);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(1);
+    });
+
+    test('that dropping the last tab should render no drop target', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new TabsContainer(accessor, groupPanel, {});
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+        cut.openPanel(new TestPanel('panel2', jest.fn() as any));
+
+        const emptySpace = cut.element
+            .getElementsByClassName('void-container')
+            .item(0);
+
+        if (!emptySpace) {
+            fail('element not found');
+        }
+
+        jest.spyOn(emptySpace, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(emptySpace, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'anothergroupid', 'panel2')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(emptySpace);
+        fireEvent.dragOver(emptySpace);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(0);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+
+    test('that dropping the first tab should render a drop target', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new TabsContainer(accessor, groupPanel, {});
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+        cut.openPanel(new TestPanel('panel2', jest.fn() as any));
+
+        const emptySpace = cut.element
+            .getElementsByClassName('void-container')
+            .item(0);
+
+        if (!emptySpace) {
+            fail('element not found');
+        }
+
+        jest.spyOn(emptySpace, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(emptySpace, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [new PanelTransfer('testcomponentid', 'anothergroupid', 'panel1')],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(emptySpace);
+        fireEvent.dragOver(emptySpace);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(0);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(1);
+    });
+
+    test('that dropping a tab from another component should not render a drop target', () => {
+        const accessorMock = jest.fn<Partial<DockviewComponent>, []>(() => {
+            return {
+                id: 'testcomponentid',
+            };
+        });
+        const groupviewMock = jest.fn<Partial<Groupview>, []>(() => {
+            return {
+                canDisplayOverlay: jest.fn(),
+            };
+        });
+
+        const groupView = new groupviewMock() as Groupview;
+
+        const groupPanelMock = jest.fn<Partial<GroupPanel>, []>(() => {
+            return {
+                id: 'testgroupid',
+                model: groupView,
+            };
+        });
+
+        const accessor = new accessorMock() as DockviewComponent;
+        const groupPanel = new groupPanelMock() as GroupPanel;
+
+        const cut = new TabsContainer(accessor, groupPanel, {});
+
+        cut.openPanel(new TestPanel('panel1', jest.fn() as any));
+        cut.openPanel(new TestPanel('panel2', jest.fn() as any));
+
+        const emptySpace = cut.element
+            .getElementsByClassName('void-container')
+            .item(0);
+
+        if (!emptySpace) {
+            fail('element not found');
+        }
+
+        jest.spyOn(emptySpace, 'clientHeight', 'get').mockImplementation(
+            () => 100
+        );
+        jest.spyOn(emptySpace, 'clientWidth', 'get').mockImplementation(
+            () => 100
+        );
+
+        LocalSelectionTransfer.getInstance().setData(
+            [
+                new PanelTransfer(
+                    'anothercomponentid',
+                    'anothergroupid',
+                    'panel1'
+                ),
+            ],
+            PanelTransfer.prototype
+        );
+
+        fireEvent.dragEnter(emptySpace);
+        fireEvent.dragOver(emptySpace);
+
+        expect(groupView.canDisplayOverlay).toBeCalledTimes(1);
+
+        expect(
+            cut.element.getElementsByClassName('drop-target-dropzone').length
+        ).toBe(0);
+    });
+});
diff --git a/packages/dockview/src/dockview/options.ts b/packages/dockview/src/dockview/options.ts
index a46f6bd23..c36e77b24 100644
--- a/packages/dockview/src/dockview/options.ts
+++ b/packages/dockview/src/dockview/options.ts
@@ -12,6 +12,7 @@ import { GroupPanel } from '../groupview/groupviewPanel';
 import { ISplitviewStyles, Orientation } from '../splitview/core/splitview';
 import { FrameworkFactory } from '../types';
 import { DockviewDropTargets } from '../groupview/dnd';
+import { PanelTransfer } from '../dnd/dataTransfer';
 
 export interface GroupPanelFrameworkComponentFactory {
     content: FrameworkFactory<IContentRenderer>;
@@ -53,6 +54,7 @@ export interface DockviewDndOverlayEvent {
     nativeEvent: DragEvent;
     target: DockviewDropTargets;
     group: GroupPanel;
+    getData: () => PanelTransfer | undefined;
 }
 
 export interface DockviewComponentOptions extends DockviewRenderFunctions {
diff --git a/packages/dockview/src/groupview/groupview.ts b/packages/dockview/src/groupview/groupview.ts
index 4a7e09028..ce8c474f0 100644
--- a/packages/dockview/src/groupview/groupview.ts
+++ b/packages/dockview/src/groupview/groupview.ts
@@ -247,7 +247,7 @@ export class Groupview extends CompositeDisposable implements IGroupview {
 
                 const data = getPanelData();
 
-                if (data) {
+                if (data && data.viewId === this.accessor.id) {
                     const groupHasOnePanelAndIsActiveDragElement =
                         this._panels.length === 1 && data.groupId === this.id;
 
@@ -670,6 +670,7 @@ export class Groupview extends CompositeDisposable implements IGroupview {
                 nativeEvent: event,
                 target,
                 group: this.accessor.getPanel(this.id)!,
+                getData: getPanelData,
             });
         }
         return false;
diff --git a/packages/dockview/src/groupview/tab.ts b/packages/dockview/src/groupview/tab.ts
index 62bfa3085..1dc002eba 100644
--- a/packages/dockview/src/groupview/tab.ts
+++ b/packages/dockview/src/groupview/tab.ts
@@ -52,7 +52,7 @@ export class Tab extends CompositeDisposable implements ITab {
 
     constructor(
         public readonly panelId: string,
-        accessor: IDockviewComponent,
+        private readonly accessor: IDockviewComponent,
         private readonly group: GroupPanel
     ) {
         super();
@@ -119,7 +119,7 @@ export class Tab extends CompositeDisposable implements ITab {
             validOverlays: 'none',
             canDisplayOverlay: (event) => {
                 const data = getPanelData();
-                if (data) {
+                if (data && this.accessor.id === data.viewId) {
                     return this.panelId !== data.panelId;
                 }
 
diff --git a/packages/dockview/src/groupview/titlebar/tabsContainer.ts b/packages/dockview/src/groupview/titlebar/tabsContainer.ts
index 19428d36d..24c6eac70 100644
--- a/packages/dockview/src/groupview/titlebar/tabsContainer.ts
+++ b/packages/dockview/src/groupview/titlebar/tabsContainer.ts
@@ -169,7 +169,7 @@ export class TabsContainer
             canDisplayOverlay: (event) => {
                 const data = getPanelData();
 
-                if (data) {
+                if (data && this.accessor.id === data.viewId) {
                     // don't show the overlay if the tab being dragged is the last panel of this group
                     return last(this.tabs)?.value.panelId !== data.panelId;
                 }
diff --git a/packages/dockview/src/index.ts b/packages/dockview/src/index.ts
index ce1b14f44..1e57c384f 100644
--- a/packages/dockview/src/index.ts
+++ b/packages/dockview/src/index.ts
@@ -16,6 +16,7 @@ export * from './dockview/dockviewComponent';
 export * from './gridview/gridviewComponent';
 export * from './splitview/splitviewComponent';
 export * from './paneview/paneviewComponent';
+export { PaneviewComponentOptions } from './paneview/options';
 
 export * from './gridview/gridviewPanel';
 export * from './splitview/splitviewPanel';
diff --git a/packages/dockview/src/paneview/draggablePaneviewPanel.ts b/packages/dockview/src/paneview/draggablePaneviewPanel.ts
index ff3309eec..af58dcd8e 100644
--- a/packages/dockview/src/paneview/draggablePaneviewPanel.ts
+++ b/packages/dockview/src/paneview/draggablePaneviewPanel.ts
@@ -8,6 +8,7 @@ import { Droptarget, DroptargetEvent, Position } from '../dnd/droptarget';
 import { Emitter } from '../events';
 import { IDisposable } from '../lifecycle';
 import { Orientation } from '../splitview/core/splitview';
+import { IPaneviewComponent } from './paneviewComponent';
 import {
     IPaneviewPanel,
     PanePanelInitParameter,
@@ -27,6 +28,7 @@ export abstract class DraggablePaneviewPanel extends PaneviewPanel {
     readonly onDidDrop = this._onDidDrop.event;
 
     constructor(
+        private readonly accessor: IPaneviewComponent,
         id: string,
         component: string,
         headerComponent: string | undefined,
@@ -47,12 +49,13 @@ export abstract class DraggablePaneviewPanel extends PaneviewPanel {
         }
 
         const id = this.id;
+        const accessorId = this.accessor.id;
         this.header.draggable = true;
 
         this.handler = new (class PaneDragHandler extends DragHandler {
             getData(): IDisposable {
                 LocalSelectionTransfer.getInstance().setData(
-                    [new PaneTransfer('paneview', id)],
+                    [new PaneTransfer(accessorId, id)],
                     PaneTransfer.prototype
                 );
 
@@ -68,14 +71,27 @@ export abstract class DraggablePaneviewPanel extends PaneviewPanel {
 
         this.target = new Droptarget(this.element, {
             validOverlays: 'vertical',
-            canDisplayOverlay: () => {
+            canDisplayOverlay: (event) => {
                 const data = getPaneData();
 
-                if (!data) {
-                    return true;
+                if (data) {
+                    if (
+                        data.paneId !== this.id &&
+                        data.viewId === this.accessor.id
+                    ) {
+                        return true;
+                    }
                 }
 
-                return data.paneId !== this.id;
+                if (this.accessor.options.showDndOverlay) {
+                    return this.accessor.options.showDndOverlay({
+                        nativeEvent: event,
+                        getData: getPaneData,
+                        panel: this,
+                    });
+                }
+
+                return false;
             },
         });
 
@@ -92,11 +108,13 @@ export abstract class DraggablePaneviewPanel extends PaneviewPanel {
     private onDrop(event: DroptargetEvent) {
         const data = getPaneData();
 
-        if (!data) {
+        if (!data || data.viewId !== this.accessor.id) {
+            // if there is no local drag event for this panel
+            // or if the drag event was creating by another Paneview instance
             this._onDidDrop.fire({
                 ...event,
                 panel: this,
-                getData: () => getPaneData(),
+                getData: getPaneData,
             });
             return;
         }
@@ -107,10 +125,11 @@ export abstract class DraggablePaneviewPanel extends PaneviewPanel {
 
         const existingPanel = containerApi.getPanel(panelId);
         if (!existingPanel) {
+            // if the panel doesn't exist
             this._onDidDrop.fire({
                 ...event,
                 panel: this,
-                getData: () => getPaneData(),
+                getData: getPaneData,
             });
             return;
         }
diff --git a/packages/dockview/src/paneview/options.ts b/packages/dockview/src/paneview/options.ts
index 285cc58fa..72d4e0be7 100644
--- a/packages/dockview/src/paneview/options.ts
+++ b/packages/dockview/src/paneview/options.ts
@@ -1,4 +1,5 @@
 import { FrameworkFactory } from '../types';
+import { PaneviewDndOverlayEvent } from './paneviewComponent';
 import { IPaneBodyPart, IPaneHeaderPart, PaneviewPanel } from './paneviewPanel';
 
 export interface PaneviewComponentOptions {
@@ -23,4 +24,5 @@ export interface PaneviewComponentOptions {
         body: FrameworkFactory<IPaneBodyPart>;
     };
     disableDnd?: boolean;
+    showDndOverlay?: (event: PaneviewDndOverlayEvent) => boolean;
 }
diff --git a/packages/dockview/src/paneview/paneviewComponent.ts b/packages/dockview/src/paneview/paneviewComponent.ts
index 9e9eafcd4..d0995b3a6 100644
--- a/packages/dockview/src/paneview/paneviewComponent.ts
+++ b/packages/dockview/src/paneview/paneviewComponent.ts
@@ -24,6 +24,16 @@ import {
     PaneviewDropEvent2,
 } from './draggablePaneviewPanel';
 import { DefaultHeader } from './defaultPaneviewHeader';
+import { sequentialNumberGenerator } from '../math';
+import { PaneTransfer } from '../dnd/dataTransfer';
+
+const nextLayoutId = sequentialNumberGenerator();
+
+export interface PaneviewDndOverlayEvent {
+    nativeEvent: DragEvent;
+    panel: IPaneviewPanel;
+    getData: () => PaneTransfer | undefined;
+}
 
 export interface SerializedPaneviewPanel {
     snap?: boolean;
@@ -57,9 +67,11 @@ export class PaneFramework extends DraggablePaneviewPanel {
             orientation: Orientation;
             isExpanded: boolean;
             disableDnd: boolean;
+            accessor: IPaneviewComponent;
         }
     ) {
         super(
+            options.accessor,
             options.id,
             options.component,
             options.headerComponent,
@@ -94,11 +106,13 @@ export interface AddPaneviewComponentOptions {
 }
 
 export interface IPaneviewComponent extends IDisposable {
+    readonly id: string;
     readonly width: number;
     readonly height: number;
     readonly minimumSize: number;
     readonly maximumSize: number;
     readonly panels: IPaneviewPanel[];
+    readonly options: PaneviewComponentOptions;
     readonly onDidAddView: Event<PaneviewPanel>;
     readonly onDidRemoveView: Event<PaneviewPanel>;
     readonly onDidDrop: Event<PaneviewDropEvent2>;
@@ -120,6 +134,8 @@ export class PaneviewComponent
     extends CompositeDisposable
     implements IPaneviewComponent
 {
+    private readonly _id = nextLayoutId.next();
+    private _options: PaneviewComponentOptions;
     private _disposable = new MutableDisposable();
     private _viewDisposables = new Map<string, IDisposable>();
     private _paneview!: Paneview;
@@ -139,6 +155,10 @@ export class PaneviewComponent
     private readonly _onDidRemoveView = new Emitter<PaneviewPanel>();
     readonly onDidRemoveView = this._onDidRemoveView.event;
 
+    get id(): string {
+        return this._id;
+    }
+
     get panels(): PaneviewPanel[] {
         return this.paneview.getPanes();
     }
@@ -179,9 +199,7 @@ export class PaneviewComponent
             : this.paneview.orthogonalSize;
     }
 
-    private _options: PaneviewComponentOptions;
-
-    get options() {
+    get options(): PaneviewComponentOptions {
         return this._options;
     }
 
@@ -267,6 +285,7 @@ export class PaneviewComponent
             orientation: Orientation.VERTICAL,
             isExpanded: !!options.isExpanded,
             disableDnd: !!this.options.disableDnd,
+            accessor: this,
         });
 
         this.doAddPanel(view);
@@ -400,6 +419,7 @@ export class PaneviewComponent
                         orientation: Orientation.VERTICAL,
                         isExpanded: !!view.expanded,
                         disableDnd: !!this.options.disableDnd,
+                        accessor: this,
                     });
 
                     this.doAddPanel(panel);
diff --git a/packages/dockview/src/react/dockview/dockview.tsx b/packages/dockview/src/react/dockview/dockview.tsx
index 85ca922e5..a0d738674 100644
--- a/packages/dockview/src/react/dockview/dockview.tsx
+++ b/packages/dockview/src/react/dockview/dockview.tsx
@@ -137,6 +137,7 @@ export const DockviewReact = React.forwardRef(
                 styles: props.hideBorders
                     ? { separatorBorder: 'transparent' }
                     : undefined,
+                showDndOverlay: props.showDndOverlay,
             });
 
             domRef.current?.appendChild(dockview.element);
diff --git a/packages/dockview/src/react/paneview/paneview.tsx b/packages/dockview/src/react/paneview/paneview.tsx
index f57809a77..8dbba197f 100644
--- a/packages/dockview/src/react/paneview/paneview.tsx
+++ b/packages/dockview/src/react/paneview/paneview.tsx
@@ -3,6 +3,7 @@ import { PaneviewPanelApi } from '../../api/paneviewPanelApi';
 import {
     PaneviewComponent,
     IPaneviewComponent,
+    PaneviewDndOverlayEvent,
 } from '../../paneview/paneviewComponent';
 import { usePortalsLifecycle } from '../react';
 import { PaneviewApi } from '../../api/component.api';
@@ -33,6 +34,7 @@ export interface IPaneviewReactProps {
     className?: string;
     disableAutoResizing?: boolean;
     disableDnd?: boolean;
+    showDndOverlay?: (event: PaneviewDndOverlayEvent) => boolean;
     onDidDrop?(event: PaneviewDropEvent): void;
 }
 
@@ -85,6 +87,7 @@ export const PaneviewReact = React.forwardRef(
                         createComponent,
                     },
                 },
+                showDndOverlay: props.showDndOverlay,
             });
 
             const api = new PaneviewApi(paneview);
@@ -144,6 +147,15 @@ export const PaneviewReact = React.forwardRef(
             };
         }, [props.onDidDrop]);
 
+        React.useEffect(() => {
+            if (!paneviewRef.current) {
+                return;
+            }
+            paneviewRef.current.updateOptions({
+                showDndOverlay: props.showDndOverlay,
+            });
+        }, [props.showDndOverlay]);
+
         return (
             <div
                 className={props.className}