diff --git a/packages/@headlessui-react/CHANGELOG.md b/packages/@headlessui-react/CHANGELOG.md
index 0c748df..3e94bf5 100644
--- a/packages/@headlessui-react/CHANGELOG.md
+++ b/packages/@headlessui-react/CHANGELOG.md
@@ -15,6 +15,9 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Fixed
 
 - Fixed SSR support on Deno ([#1671](https://github.com/tailwindlabs/headlessui/pull/1671))
+- Don’t close dialog when opened during mouse up event ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
+- Don’t close dialog when drag ends outside dialog ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
+- Fix outside clicks to close dialog when nested, unopened dialogs are present ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
 
 ## [1.6.6] - 2022-07-07
 
diff --git a/packages/@headlessui-react/src/components/dialog/dialog.test.tsx b/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
index 21971b8..fe12492 100644
--- a/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
+++ b/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
@@ -17,7 +17,7 @@ import {
   getDialogs,
   getDialogOverlays,
 } from '../../test-utils/accessibility-assertions'
-import { click, press, Keys } from '../../test-utils/interactions'
+import { click, mouseDrag, press, Keys } from '../../test-utils/interactions'
 import { PropsOf } from '../../types'
 import { Transition } from '../transitions/transition'
 import { createPortal } from 'react-dom'
@@ -1066,14 +1066,101 @@ describe('Mouse interactions', () => {
       assertDialog({ state: DialogState.Visible })
     })
   )
+
+  it(
+    'should not close the dialog if opened during mouse up',
+    suppressConsoleLogs(async () => {
+      function Example() {
+        let [isOpen, setIsOpen] = useState(false)
+        return (
+          <>
+            <button id="trigger" onMouseUpCapture={() => setIsOpen((v) => !v)}>
+              Trigger
+            </button>
+            <Dialog open={isOpen} onClose={setIsOpen}>
+              <Dialog.Backdrop />
+              <Dialog.Panel>
+                <button id="inside">Inside</button>
+                <TabSentinel />
+              </Dialog.Panel>
+            </Dialog>
+          </>
+        )
+      }
+
+      render(<Example />)
+
+      await click(document.getElementById('trigger'))
+
+      assertDialog({ state: DialogState.Visible })
+
+      await click(document.getElementById('inside'))
+
+      assertDialog({ state: DialogState.Visible })
+    })
+  )
+
+  it(
+    'should not close the dialog if click starts inside the dialog but ends outside',
+    suppressConsoleLogs(async () => {
+      function Example() {
+        let [isOpen, setIsOpen] = useState(false)
+        return (
+          <>
+            <button id="trigger" onClick={() => setIsOpen((v) => !v)}>
+              Trigger
+            </button>
+            <div id="imoutside">this thing</div>
+            <Dialog open={isOpen} onClose={setIsOpen}>
+              <Dialog.Backdrop />
+              <Dialog.Panel>
+                <button id="inside">Inside</button>
+                <TabSentinel />
+              </Dialog.Panel>
+            </Dialog>
+          </>
+        )
+      }
+
+      render(<Example />)
+
+      // Open the dialog
+      await click(document.getElementById('trigger'))
+
+      assertDialog({ state: DialogState.Visible })
+
+      // Start a click inside the dialog and end it outside
+      await mouseDrag(document.getElementById('inside'), document.getElementById('imoutside'))
+
+      // It should not have hidden
+      assertDialog({ state: DialogState.Visible })
+
+      await click(document.getElementById('imoutside'))
+
+      // It's gone
+      assertDialog({ state: DialogState.InvisibleUnmounted })
+    })
+  )
 })
 
 describe('Nesting', () => {
-  function Nested({ onClose, level = 1 }: { onClose: (value: boolean) => void; level?: number }) {
+  type RenderStrategy = 'mounted' | 'always'
+
+  function Nested({
+    onClose,
+    open = true,
+    level = 1,
+    renderWhen = 'mounted',
+  }: {
+    onClose: (value: boolean) => void
+    open?: boolean
+    level?: number
+    renderWhen?: RenderStrategy
+  }) {
     let [showChild, setShowChild] = useState(false)
 
     return (
-      <Dialog open={true} onClose={onClose}>
+      <Dialog open={open} onClose={onClose}>
         <Dialog.Overlay />
 
         <div>
@@ -1082,31 +1169,42 @@ describe('Nesting', () => {
           <button onClick={() => setShowChild(true)}>Open {level + 1} b</button>
           <button onClick={() => setShowChild(true)}>Open {level + 1} c</button>
         </div>
-        {showChild && <Nested onClose={setShowChild} level={level + 1} />}
+        {renderWhen === 'always' ? (
+          <Nested
+            open={showChild}
+            onClose={setShowChild}
+            level={level + 1}
+            renderWhen={renderWhen}
+          />
+        ) : (
+          showChild && <Nested open={true} onClose={setShowChild} level={level + 1} />
+        )}
       </Dialog>
     )
   }
 
-  function Example() {
+  function Example({ renderWhen = 'mounted' }: { renderWhen: RenderStrategy }) {
     let [open, setOpen] = useState(false)
 
     return (
       <>
         <button onClick={() => setOpen(true)}>Open 1</button>
-        {open && <Nested onClose={setOpen} />}
+        {open && <Nested open={true} onClose={setOpen} renderWhen={renderWhen} />}
       </>
     )
   }
 
   it.each`
-    strategy                            | action
-    ${'with `Escape`'}                  | ${() => press(Keys.Escape)}
-    ${'with `Outside Click`'}           | ${() => click(document.body)}
-    ${'with `Click on Dialog.Overlay`'} | ${() => click(getDialogOverlays().pop()!)}
+    strategy                            | when         | action
+    ${'with `Escape`'}                  | ${'mounted'} | ${() => press(Keys.Escape)}
+    ${'with `Outside Click`'}           | ${'mounted'} | ${() => click(document.body)}
+    ${'with `Click on Dialog.Overlay`'} | ${'mounted'} | ${() => click(getDialogOverlays().pop()!)}
+    ${'with `Escape`'}                  | ${'always'}  | ${() => press(Keys.Escape)}
+    ${'with `Outside Click`'}           | ${'always'}  | ${() => click(document.body)}
   `(
-    'should be possible to open nested Dialog components and close them $strategy',
-    async ({ action }) => {
-      render(<Example />)
+    'should be possible to open nested Dialog components (visible when $when) and close them $strategy',
+    async ({ when, action }) => {
+      render(<Example renderWhen={when} />)
 
       // Verify we have no open dialogs
       expect(getDialogs()).toHaveLength(0)
diff --git a/packages/@headlessui-react/src/components/dialog/dialog.tsx b/packages/@headlessui-react/src/components/dialog/dialog.tsx
index 351c28a..db16df7 100644
--- a/packages/@headlessui-react/src/components/dialog/dialog.tsx
+++ b/packages/@headlessui-react/src/components/dialog/dialog.tsx
@@ -305,6 +305,7 @@ let DialogRoot = forwardRefWithAs(function Dialog<
   return (
     <StackProvider
       type="Dialog"
+      enabled={dialogState === DialogStates.Open}
       element={internalDialogRef}
       onUpdate={useEvent((message, type, element) => {
         if (type !== 'Dialog') return
diff --git a/packages/@headlessui-react/src/hooks/use-outside-click.ts b/packages/@headlessui-react/src/hooks/use-outside-click.ts
index d358023..30c5e8d 100644
--- a/packages/@headlessui-react/src/hooks/use-outside-click.ts
+++ b/packages/@headlessui-react/src/hooks/use-outside-click.ts
@@ -90,9 +90,31 @@ export function useOutsideClick(
     return cb(event, target)
   }
 
+  let initialClickTarget = useRef<EventTarget | null>(null)
+
+  useWindowEvent(
+    'mousedown',
+    (event) => {
+      if (enabledRef.current) {
+        initialClickTarget.current = event.target
+      }
+    },
+    true
+  )
+
   useWindowEvent(
     'click',
-    (event) => handleOutsideClick(event, (event) => event.target as HTMLElement),
+    (event) => {
+      if (!initialClickTarget.current) {
+        return
+      }
+
+      handleOutsideClick(event, () => {
+        return initialClickTarget.current as HTMLElement
+      })
+
+      initialClickTarget.current = null
+    },
 
     // We will use the `capture` phase so that layers in between with `event.stopPropagation()`
     // don't "cancel" this outside click check. E.g.: A `Menu` inside a `DialogPanel` if the `Menu`
diff --git a/packages/@headlessui-react/src/internal/stack-context.tsx b/packages/@headlessui-react/src/internal/stack-context.tsx
index 6db45db..e8ff63d 100644
--- a/packages/@headlessui-react/src/internal/stack-context.tsx
+++ b/packages/@headlessui-react/src/internal/stack-context.tsx
@@ -32,11 +32,13 @@ export function StackProvider({
   onUpdate,
   type,
   element,
+  enabled,
 }: {
   children: ReactNode
   onUpdate?: OnUpdate
   type: string
   element: MutableRefObject<HTMLElement | null>
+  enabled?: boolean
 }) {
   let parentUpdate = useStackContext()
 
@@ -49,9 +51,14 @@ export function StackProvider({
   })
 
   useIsoMorphicEffect(() => {
-    notify(StackMessage.Add, type, element)
-    return () => notify(StackMessage.Remove, type, element)
-  }, [notify, type, element])
+    let shouldNotify = enabled === undefined || enabled === true
+
+    shouldNotify && notify(StackMessage.Add, type, element)
+
+    return () => {
+      shouldNotify && notify(StackMessage.Remove, type, element)
+    }
+  }, [notify, type, element, enabled])
 
   return <StackContext.Provider value={notify}>{children}</StackContext.Provider>
 }
diff --git a/packages/@headlessui-react/src/test-utils/interactions.ts b/packages/@headlessui-react/src/test-utils/interactions.ts
index 2b7976d..2a71b96 100644
--- a/packages/@headlessui-react/src/test-utils/interactions.ts
+++ b/packages/@headlessui-react/src/test-utils/interactions.ts
@@ -344,6 +344,74 @@ export async function mouseLeave(element: Document | Element | Window | null) {
   }
 }
 
+export async function mouseDrag(
+  startingElement: Document | Element | Window | Node | null,
+  endingElement: Document | Element | Window | Node | null
+) {
+  let button = MouseButton.Left
+
+  try {
+    if (startingElement === null) return expect(startingElement).not.toBe(null)
+    if (endingElement === null) return expect(endingElement).not.toBe(null)
+    if (startingElement instanceof HTMLButtonElement && startingElement.disabled) return
+
+    let options = { button }
+
+    // Cancel in pointerDown cancels mouseDown, mouseUp
+    let cancelled = !fireEvent.pointerDown(startingElement, options)
+
+    if (!cancelled) {
+      cancelled = !fireEvent.mouseDown(startingElement, options)
+    }
+
+    // Ensure to trigger a `focus` event if the element is focusable, or within a focusable element
+    if (!cancelled) {
+      let next: HTMLElement | null = startingElement as HTMLElement | null
+      while (next !== null) {
+        if (next.matches(focusableSelector)) {
+          next.focus()
+          break
+        }
+        next = next.parentElement
+      }
+    }
+
+    fireEvent.pointerMove(startingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseMove(startingElement, options)
+    }
+
+    fireEvent.pointerOut(startingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseOut(startingElement, options)
+    }
+
+    // crosses over to the ending element
+
+    fireEvent.pointerOver(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseOver(endingElement, options)
+    }
+
+    fireEvent.pointerMove(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseMove(endingElement, options)
+    }
+
+    fireEvent.pointerUp(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseUp(endingElement, options)
+    }
+
+    fireEvent.click(endingElement, options)
+
+    await new Promise(nextFrame)
+  } catch (err) {
+    if (err instanceof Error) Error.captureStackTrace(err, click)
+    throw err
+  }
+}
+
 // ---
 
 function focusNext(event: Partial<KeyboardEvent>) {
diff --git a/packages/@headlessui-vue/CHANGELOG.md b/packages/@headlessui-vue/CHANGELOG.md
index 7638e9d..67496d5 100644
--- a/packages/@headlessui-vue/CHANGELOG.md
+++ b/packages/@headlessui-vue/CHANGELOG.md
@@ -15,6 +15,9 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Fixed
 
 - Fixed SSR support on Deno ([#1671](https://github.com/tailwindlabs/headlessui/pull/1671))
+- Don’t close dialog when opened during mouse up event ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
+- Don’t close dialog when drag ends outside dialog ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
+- Fix outside clicks to close dialog when nested, unopened dialogs are present ([#1667](https://github.com/tailwindlabs/headlessui/pull/1667))
 
 ## [1.6.7] - 2022-07-12
 
diff --git a/packages/@headlessui-vue/src/components/dialog/dialog.test.ts b/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
index c5d9b37..3b76267 100644
--- a/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
+++ b/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
@@ -25,7 +25,7 @@ import {
   getDialogs,
   getDialogOverlays,
 } from '../../test-utils/accessibility-assertions'
-import { click, press, Keys } from '../../test-utils/interactions'
+import { click, mouseDrag, press, Keys } from '../../test-utils/interactions'
 import { html } from '../../test-utils/html'
 
 // @ts-expect-error
@@ -1444,13 +1444,106 @@ describe('Mouse interactions', () => {
       assertDialog({ state: DialogState.Visible })
     })
   )
+
+  it(
+    'should not close the dialog if opened during mouse up',
+    suppressConsoleLogs(async () => {
+      renderTemplate({
+        template: `
+          <div>
+            <button id="trigger" @mouseup.capture="toggleOpen">
+              Trigger
+            </button>
+            <Dialog :open="isOpen" @close="setIsOpen">
+              <DialogBackdrop />
+              <DialogPanel>
+                <button id="inside">Inside</button>
+                <TabSentinel />
+              </DialogPanel>
+            </Dialog>
+          </div>
+        `,
+        setup() {
+          let isOpen = ref(false)
+          return {
+            isOpen,
+            setIsOpen(value: boolean) {
+              isOpen.value = value
+            },
+            toggleOpen() {
+              isOpen.value = !isOpen.value
+            },
+          }
+        },
+      })
+
+      await click(document.getElementById('trigger'))
+
+      assertDialog({ state: DialogState.Visible })
+
+      await click(document.getElementById('inside'))
+
+      assertDialog({ state: DialogState.Visible })
+    })
+  )
+
+  it(
+    'should not close the dialog if click starts inside the dialog but ends outside',
+    suppressConsoleLogs(async () => {
+      renderTemplate({
+        template: `
+          <div>
+            <button id="trigger" @click="toggleOpen">
+              Trigger
+            </button>
+            <div id="imoutside">this thing</div>
+            <Dialog :open="isOpen" @close="setIsOpen">
+              <DialogBackdrop />
+              <DialogPanel>
+                <button id="inside">Inside</button>
+                <TabSentinel />
+              </DialogPanel>
+            </Dialog>
+          </div>
+        `,
+        setup() {
+          let isOpen = ref(false)
+          return {
+            isOpen,
+            setIsOpen(value: boolean) {
+              isOpen.value = value
+            },
+            toggleOpen() {
+              isOpen.value = !isOpen.value
+            },
+          }
+        },
+      })
+
+      // Open the dialog
+      await click(document.getElementById('trigger'))
+
+      assertDialog({ state: DialogState.Visible })
+
+      // Start a click inside the dialog and end it outside
+      await mouseDrag(document.getElementById('inside'), document.getElementById('imoutside'))
+
+      // It should not have hidden
+      assertDialog({ state: DialogState.Visible })
+
+      await click(document.getElementById('imoutside'))
+
+      // It's gone
+      assertDialog({ state: DialogState.InvisibleUnmounted })
+    })
+  )
 })
 
 describe('Nesting', () => {
   let Nested: ConcreteComponent = defineComponent({
     components: { Dialog, DialogOverlay },
     emits: ['close'],
-    props: ['level'],
+    props: ['open', 'level', 'renderWhen'],
     setup(props, { emit }) {
       let showChild = ref(false)
       function onClose() {
@@ -1459,7 +1552,7 @@ describe('Nesting', () => {
 
       return () => {
         let level = props.level ?? 1
-        return h(Dialog, { open: true, onClose }, () => [
+        return h(Dialog, { open: props.open ?? true, onClose }, () => [
           h(DialogOverlay),
           h('div', [
             h('p', `Level: ${level}`),
@@ -1467,29 +1560,40 @@ describe('Nesting', () => {
             h('button', { onClick: () => (showChild.value = true) }, `Open ${level + 1} b`),
             h('button', { onClick: () => (showChild.value = true) }, `Open ${level + 1} c`),
           ]),
-          showChild.value &&
-            h(Nested, {
-              onClose: () => (showChild.value = false),
-              level: level + 1,
-            }),
+          props.renderWhen === 'always'
+            ? h(Nested, {
+                open: showChild.value,
+                onClose: () => (showChild.value = false),
+                level: level + 1,
+                renderWhen: props.renderWhen,
+              })
+            : showChild.value &&
+              h(Nested, {
+                open: true,
+                onClose: () => (showChild.value = false),
+                level: level + 1,
+                renderWhen: props.renderWhen,
+              }),
         ])
       }
     },
   })
 
   it.each`
-    strategy                            | action
-    ${'with `Escape`'}                  | ${() => press(Keys.Escape)}
-    ${'with `Outside Click`'}           | ${() => click(document.body)}
-    ${'with `Click on Dialog.Overlay`'} | ${() => click(getDialogOverlays().pop()!)}
+    strategy                            | when         | action
+    ${'with `Escape`'}                  | ${'mounted'} | ${() => press(Keys.Escape)}
+    ${'with `Outside Click`'}           | ${'mounted'} | ${() => click(document.body)}
+    ${'with `Click on Dialog.Overlay`'} | ${'mounted'} | ${() => click(getDialogOverlays().pop()!)}
+    ${'with `Escape`'}                  | ${'always'}  | ${() => press(Keys.Escape)}
+    ${'with `Outside Click`'}           | ${'always'}  | ${() => click(document.body)}
   `(
     'should be possible to open nested Dialog components and close them $strategy',
-    async ({ action }) => {
+    async ({ when, action }) => {
       renderTemplate({
         components: { Nested },
         template: `
           <button @click="isOpen = true">Open 1</button>
-          <Nested v-if="isOpen" @close="isOpen = false" />
+          <Nested v-if="isOpen" @close="isOpen = false" renderWhen="${when}" />
         `,
         setup() {
           let isOpen = ref(false)
diff --git a/packages/@headlessui-vue/src/components/dialog/dialog.ts b/packages/@headlessui-vue/src/components/dialog/dialog.ts
index 76f82fe..1a60622 100644
--- a/packages/@headlessui-vue/src/components/dialog/dialog.ts
+++ b/packages/@headlessui-vue/src/components/dialog/dialog.ts
@@ -140,6 +140,7 @@ export let Dialog = defineComponent({
     )
     useStackProvider({
       type: 'Dialog',
+      enabled: computed(() => dialogState.value === DialogStates.Open),
       element: internalDialogRef,
       onUpdate: (message, type, element) => {
         if (type !== 'Dialog') return
diff --git a/packages/@headlessui-vue/src/components/focus-trap/focus-trap.ts b/packages/@headlessui-vue/src/components/focus-trap/focus-trap.ts
index b6b1ceb..1db7628 100644
--- a/packages/@headlessui-vue/src/components/focus-trap/focus-trap.ts
+++ b/packages/@headlessui-vue/src/components/focus-trap/focus-trap.ts
@@ -10,6 +10,7 @@ import {
   PropType,
   Fragment,
   Ref,
+  onUnmounted,
 } from 'vue'
 import { render } from '../../utils/render'
 import { Hidden, Features as HiddenFeatures } from '../../internal/hidden'
@@ -142,44 +143,38 @@ function useRestoreFocus(
 ) {
   let restoreElement = ref<HTMLElement | null>(null)
 
-  // Deliberately not using a ref, we don't want to trigger re-renders.
-  let mounted = { value: false }
+  function captureFocus() {
+    if (restoreElement.value) return
+    restoreElement.value = ownerDocument.value?.activeElement as HTMLElement
+  }
+
+  // Restore the focus to the previous element
+  function restoreFocusIfNeeded() {
+    if (!restoreElement.value) return
+    focusElement(restoreElement.value)
+    restoreElement.value = null
+  }
 
   onMounted(() => {
-    // Capture the currently focused element, before we try to move the focus inside the FocusTrap.
     watch(
       enabled,
       (newValue, prevValue) => {
         if (newValue === prevValue) return
-        if (!enabled.value) return
 
-        mounted.value = true
-
-        if (!restoreElement.value) {
-          restoreElement.value = ownerDocument.value?.activeElement as HTMLElement
+        if (newValue) {
+          // The FocusTrap has become enabled which means we're going to move the focus into the trap
+          // We need to capture the current focus before we do that so we can restore it when done
+          captureFocus()
+        } else {
+          restoreFocusIfNeeded()
         }
       },
       { immediate: true }
     )
-
-    // Restore the focus when we unmount the component.
-    watch(
-      enabled,
-      (newValue, prevValue, onInvalidate) => {
-        if (newValue === prevValue) return
-        if (!enabled.value) return
-
-        onInvalidate(() => {
-          if (mounted.value === false) return
-          mounted.value = false
-
-          focusElement(restoreElement.value)
-          restoreElement.value = null
-        })
-      },
-      { immediate: true }
-    )
   })
+
+  // Restore the focus when we unmount the component
+  onUnmounted(restoreFocusIfNeeded)
 }
 
 function useInitialFocus(
diff --git a/packages/@headlessui-vue/src/hooks/use-outside-click.ts b/packages/@headlessui-vue/src/hooks/use-outside-click.ts
index 83d8e65..3d2b748 100644
--- a/packages/@headlessui-vue/src/hooks/use-outside-click.ts
+++ b/packages/@headlessui-vue/src/hooks/use-outside-click.ts
@@ -1,5 +1,5 @@
 import { useWindowEvent } from './use-window-event'
-import { computed, Ref, ComputedRef } from 'vue'
+import { computed, Ref, ComputedRef, ref } from 'vue'
 import { FocusableMode, isFocusableElement } from '../utils/focus-management'
 import { dom } from '../utils/dom'
 
@@ -76,9 +76,31 @@ export function useOutsideClick(
     return cb(event, target)
   }
 
+  let initialClickTarget = ref<EventTarget | null>(null)
+
+  useWindowEvent(
+    'mousedown',
+    (event) => {
+      if (enabled.value) {
+        initialClickTarget.value = event.target
+      }
+    },
+    true
+  )
+
   useWindowEvent(
     'click',
-    (event) => handleOutsideClick(event, (event) => event.target as HTMLElement),
+    (event) => {
+      if (!initialClickTarget.value) {
+        return
+      }
+
+      handleOutsideClick(event, () => {
+        return initialClickTarget.value as HTMLElement
+      })
+
+      initialClickTarget.value = null
+    },
 
     // We will use the `capture` phase so that layers in between with `event.stopPropagation()`
     // don't "cancel" this outside click check. E.g.: A `Menu` inside a `DialogPanel` if the `Menu`
diff --git a/packages/@headlessui-vue/src/internal/stack-context.ts b/packages/@headlessui-vue/src/internal/stack-context.ts
index ada634e..075bc92 100644
--- a/packages/@headlessui-vue/src/internal/stack-context.ts
+++ b/packages/@headlessui-vue/src/internal/stack-context.ts
@@ -7,6 +7,9 @@ import {
   // Types
   InjectionKey,
   Ref,
+  watch,
+  ref,
+  onBeforeUnmount,
 } from 'vue'
 
 type OnUpdate = (message: StackMessage, type: string, element: Ref<HTMLElement | null>) => void
@@ -24,10 +27,12 @@ export function useStackContext() {
 
 export function useStackProvider({
   type,
+  enabled,
   element,
   onUpdate,
 }: {
   type: string
+  enabled: Ref<boolean | undefined>
   element: Ref<HTMLElement | null>
   onUpdate?: OnUpdate
 }) {
@@ -42,11 +47,23 @@ export function useStackProvider({
   }
 
   onMounted(() => {
-    notify(StackMessage.Add, type, element)
+    watch(
+      enabled,
+      (isEnabled, oldIsEnabled) => {
+        if (isEnabled) {
+          notify(StackMessage.Add, type, element)
+        } else if (oldIsEnabled === true) {
+          notify(StackMessage.Remove, type, element)
+        }
+      },
+      { immediate: true, flush: 'sync' }
+    )
+  })
 
-    onUnmounted(() => {
+  onUnmounted(() => {
+    if (enabled.value) {
       notify(StackMessage.Remove, type, element)
-    })
+    }
   })
 
   provide(StackContext, notify)
diff --git a/packages/@headlessui-vue/src/test-utils/interactions.ts b/packages/@headlessui-vue/src/test-utils/interactions.ts
index 4f99cb7..01c7a3d 100644
--- a/packages/@headlessui-vue/src/test-utils/interactions.ts
+++ b/packages/@headlessui-vue/src/test-utils/interactions.ts
@@ -338,6 +338,74 @@ export async function mouseLeave(element: Document | Element | Window | null) {
   }
 }
 
+export async function mouseDrag(
+  startingElement: Document | Element | Window | Node | null,
+  endingElement: Document | Element | Window | Node | null
+) {
+  let button = MouseButton.Left
+
+  try {
+    if (startingElement === null) return expect(startingElement).not.toBe(null)
+    if (endingElement === null) return expect(endingElement).not.toBe(null)
+    if (startingElement instanceof HTMLButtonElement && startingElement.disabled) return
+
+    let options = { button }
+
+    // Cancel in pointerDown cancels mouseDown, mouseUp
+    let cancelled = !fireEvent.pointerDown(startingElement, options)
+
+    if (!cancelled) {
+      cancelled = !fireEvent.mouseDown(startingElement, options)
+    }
+
+    // Ensure to trigger a `focus` event if the element is focusable, or within a focusable element
+    if (!cancelled) {
+      let next: HTMLElement | null = startingElement as HTMLElement | null
+      while (next !== null) {
+        if (next.matches(focusableSelector)) {
+          next.focus()
+          break
+        }
+        next = next.parentElement
+      }
+    }
+
+    fireEvent.pointerMove(startingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseMove(startingElement, options)
+    }
+
+    fireEvent.pointerOut(startingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseOut(startingElement, options)
+    }
+
+    // crosses over to the ending element
+
+    fireEvent.pointerOver(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseOver(endingElement, options)
+    }
+
+    fireEvent.pointerMove(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseMove(endingElement, options)
+    }
+
+    fireEvent.pointerUp(endingElement, options)
+    if (!cancelled) {
+      fireEvent.mouseUp(endingElement, options)
+    }
+
+    fireEvent.click(endingElement, options)
+
+    await new Promise(nextFrame)
+  } catch (err) {
+    if (err instanceof Error) Error.captureStackTrace(err, click)
+    throw err
+  }
+}
+
 // ---
 
 function focusNext(event: Partial<KeyboardEvent>) {