diff --git a/CHANGELOG.md b/CHANGELOG.md
index 12f58df..03ffda3 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -11,6 +11,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 - Stop the event from propagating in the `Popover` component ([#798](https://github.com/tailwindlabs/headlessui/pull/798))
 - Allow to click on elements inside a `Dialog.Overlay` ([#816](https://github.com/tailwindlabs/headlessui/pull/816))
+- Ensure interactability with `Popover.Panel` contents when using the `static` prop ([#857](https://github.com/tailwindlabs/headlessui/pull/857))
 
 ## [Unreleased - Vue]
 
diff --git a/packages/@headlessui-react/src/components/popover/popover.test.tsx b/packages/@headlessui-react/src/components/popover/popover.test.tsx
index 3df9c9b..ef1b208 100644
--- a/packages/@headlessui-react/src/components/popover/popover.test.tsx
+++ b/packages/@headlessui-react/src/components/popover/popover.test.tsx
@@ -1,5 +1,5 @@
 import React, { createElement, useEffect, useRef } from 'react'
-import { render } from '@testing-library/react'
+import { render, screen } from '@testing-library/react'
 
 import { Popover } from './popover'
 import { suppressConsoleLogs } from '../../test-utils/suppress-console-logs'
@@ -2125,4 +2125,78 @@ describe('Mouse interactions', () => {
       assertActiveElement(getPopoverButton())
     })
   )
+
+  it(
+    'should not close the Popover when clicking on a focusable element inside a static Popover.Panel',
+    suppressConsoleLogs(async () => {
+      let clickFn = jest.fn()
+
+      render(
+        <Popover>
+          <Popover.Button>Open</Popover.Button>
+          <Popover.Panel static>
+            <button onClick={clickFn}>btn</button>
+          </Popover.Panel>
+        </Popover>
+      )
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The button should not close the popover
+      await click(getByText('btn'))
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.Visible })
+
+      // Verify we actually clicked the button
+      expect(clickFn).toHaveBeenCalledTimes(1)
+    })
+  )
+
+  it(
+    'should not close the Popover when clicking on a non-focusable element inside a static Popover.Panel',
+    suppressConsoleLogs(async () => {
+      render(
+        <Popover>
+          <Popover.Button>Open</Popover.Button>
+          <Popover.Panel static>
+            <span>element</span>
+          </Popover.Panel>
+        </Popover>
+      )
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The element should not close the popover
+      await click(getByText('element'))
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.Visible })
+    })
+  )
+
+  it(
+    'should close the Popover when clicking outside of a static Popover.Panel',
+    suppressConsoleLogs(async () => {
+      render(
+        <Popover>
+          <Popover.Button>Open</Popover.Button>
+          <Popover.Panel static>
+            <span>element</span>
+          </Popover.Panel>
+        </Popover>
+      )
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The element should close the popover
+      await click(document.body)
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.InvisibleHidden })
+    })
+  )
 })
diff --git a/packages/@headlessui-react/src/components/popover/popover.tsx b/packages/@headlessui-react/src/components/popover/popover.tsx
index 9ddbf11..f0e7264 100644
--- a/packages/@headlessui-react/src/components/popover/popover.tsx
+++ b/packages/@headlessui-react/src/components/popover/popover.tsx
@@ -619,10 +619,12 @@ let Panel = forwardRefWithAs(function Panel<TTag extends ElementType = typeof DE
 
   // Unlink on "unmount" children
   useEffect(() => {
+    if (props.static) return
+
     if (state.popoverState === PopoverStates.Closed && (props.unmount ?? true)) {
       dispatch({ type: ActionTypes.SetPanel, panel: null })
     }
-  }, [state.popoverState, props.unmount, dispatch])
+  }, [state.popoverState, props.unmount, props.static, dispatch])
 
   // Move focus within panel
   useEffect(() => {
diff --git a/packages/@headlessui-vue/src/components/popover/popover.test.ts b/packages/@headlessui-vue/src/components/popover/popover.test.ts
index bc872cc..7ba73f6 100644
--- a/packages/@headlessui-vue/src/components/popover/popover.test.ts
+++ b/packages/@headlessui-vue/src/components/popover/popover.test.ts
@@ -2323,4 +2323,81 @@ describe('Mouse interactions', () => {
       assertActiveElement(getPopoverButton())
     })
   )
+
+  it(
+    'should not close the Popover when clicking on a focusable element inside a static PopoverPanel',
+    suppressConsoleLogs(async () => {
+      let clickFn = jest.fn()
+
+      renderTemplate({
+        template: html`
+          <Popover>
+            <PopoverButton>Open</PopoverButton>
+            <PopoverPanel static>
+              <button @click="clickFn">btn</button>
+            </PopoverPanel>
+          </Popover>
+        `,
+        setup: () => ({ clickFn }),
+      })
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The button should not close the popover
+      await click(getByText('btn'))
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.Visible })
+
+      // Verify we actually clicked the button
+      expect(clickFn).toHaveBeenCalledTimes(1)
+    })
+  )
+
+  it(
+    'should not close the Popover when clicking on a non-focusable element inside a static PopoverPanel',
+    suppressConsoleLogs(async () => {
+      renderTemplate(html`
+        <Popover>
+          <PopoverButton>Open</PopoverButton>
+          <PopoverPanel static>
+            <span>element</span>
+          </PopoverPanel>
+        </Popover>
+      `)
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The element should not close the popover
+      await click(getByText('element'))
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.Visible })
+    })
+  )
+
+  it(
+    'should close the Popover when clicking outside of a static PopoverPanel',
+    suppressConsoleLogs(async () => {
+      renderTemplate(html`
+        <Popover>
+          <PopoverButton>Open</PopoverButton>
+          <PopoverPanel static>
+            <span>element</span>
+          </PopoverPanel>
+        </Popover>
+      `)
+
+      // Open the popover
+      await click(getPopoverButton())
+
+      // The element should close the popover
+      await click(document.body)
+
+      // Verify it is still open
+      assertPopoverButton({ state: PopoverState.InvisibleHidden })
+    })
+  )
 })