diff --git a/core/src/overlay.rs b/core/src/overlay.rs
index 1fa994e4d8..2e05db9366 100644
--- a/core/src/overlay.rs
+++ b/core/src/overlay.rs
@@ -91,9 +91,23 @@ where
     ///
     /// By default, it returns true if the bounds of the `layout` contain
     /// the `cursor_position`.
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        _renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
         layout.bounds().contains(cursor_position)
     }
+
+    /// Returns the nested overlay of the [`Overlay`], if there is any.
+    fn overlay<'a>(
+        &'a mut self,
+        _layout: Layout<'_>,
+        _renderer: &Renderer,
+    ) -> Option<Element<'a, Message, Renderer>> {
+        None
+    }
 }
 
 /// Returns a [`Group`] of overlay [`Element`] children.
diff --git a/core/src/overlay/element.rs b/core/src/overlay/element.rs
index be67fc76e0..c2134343db 100644
--- a/core/src/overlay/element.rs
+++ b/core/src/overlay/element.rs
@@ -112,8 +112,22 @@ where
     }
 
     /// Returns true if the cursor is over the [`Element`].
-    pub fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
-        self.overlay.is_over(layout, cursor_position)
+    pub fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
+        self.overlay.is_over(layout, renderer, cursor_position)
+    }
+
+    /// Returns the nested overlay of the [`Element`], if there is any.
+    pub fn overlay<'b>(
+        &'b mut self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+    ) -> Option<Element<'b, Message, Renderer>> {
+        self.overlay.overlay(layout, renderer)
     }
 }
 
@@ -248,7 +262,22 @@ where
         self.content.draw(renderer, theme, style, layout, cursor)
     }
 
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
-        self.content.is_over(layout, cursor_position)
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
+        self.content.is_over(layout, renderer, cursor_position)
+    }
+
+    fn overlay<'b>(
+        &'b mut self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+    ) -> Option<Element<'b, B, Renderer>> {
+        self.content
+            .overlay(layout, renderer)
+            .map(|overlay| overlay.map(self.mapper))
     }
 }
diff --git a/core/src/overlay/group.rs b/core/src/overlay/group.rs
index e770abf838..deffaad030 100644
--- a/core/src/overlay/group.rs
+++ b/core/src/overlay/group.rs
@@ -147,11 +147,33 @@ where
         });
     }
 
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
         self.children
             .iter()
             .zip(layout.children())
-            .any(|(child, layout)| child.is_over(layout, cursor_position))
+            .any(|(child, layout)| {
+                child.is_over(layout, renderer, cursor_position)
+            })
+    }
+
+    fn overlay<'b>(
+        &'b mut self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+    ) -> Option<overlay::Element<'b, Message, Renderer>> {
+        let children = self
+            .children
+            .iter_mut()
+            .zip(layout.children())
+            .filter_map(|(child, layout)| child.overlay(layout, renderer))
+            .collect::<Vec<_>>();
+
+        (!children.is_empty()).then(|| Group::with_children(children).overlay())
     }
 }
 
diff --git a/examples/modal/src/main.rs b/examples/modal/src/main.rs
index 5c43c20340..7fcbbfe4ff 100644
--- a/examples/modal/src/main.rs
+++ b/examples/modal/src/main.rs
@@ -3,11 +3,13 @@ use iced::keyboard;
 use iced::subscription::{self, Subscription};
 use iced::theme;
 use iced::widget::{
-    self, button, column, container, horizontal_space, row, text, text_input,
+    self, button, column, container, horizontal_space, pick_list, row, text,
+    text_input,
 };
 use iced::{Alignment, Application, Command, Element, Event, Length, Settings};
 
-use self::modal::Modal;
+use modal::Modal;
+use std::fmt;
 
 pub fn main() -> iced::Result {
     App::run(Settings::default())
@@ -18,6 +20,7 @@ struct App {
     show_modal: bool,
     email: String,
     password: String,
+    plan: Plan,
 }
 
 #[derive(Debug, Clone)]
@@ -26,6 +29,7 @@ enum Message {
     HideModal,
     Email(String),
     Password(String),
+    Plan(Plan),
     Submit,
     Event(Event),
 }
@@ -66,6 +70,10 @@ impl Application for App {
                 self.password = password;
                 Command::none()
             }
+            Message::Plan(plan) => {
+                self.plan = plan;
+                Command::none()
+            }
             Message::Submit => {
                 if !self.email.is_empty() && !self.password.is_empty() {
                     self.hide_modal();
@@ -149,6 +157,16 @@ impl Application for App {
                                 .padding(5),
                         ]
                         .spacing(5),
+                        column![
+                            text("Plan").size(12),
+                            pick_list(
+                                Plan::ALL,
+                                Some(self.plan),
+                                Message::Plan
+                            )
+                            .padding(5),
+                        ]
+                        .spacing(5),
                         button(text("Submit")).on_press(Message::HideModal),
                     ]
                     .spacing(10)
@@ -176,6 +194,29 @@ impl App {
     }
 }
 
+#[derive(Debug, Clone, Copy, PartialEq, Eq, Default)]
+enum Plan {
+    #[default]
+    Basic,
+    Pro,
+    Enterprise,
+}
+
+impl Plan {
+    pub const ALL: &[Self] = &[Self::Basic, Self::Pro, Self::Enterprise];
+}
+
+impl fmt::Display for Plan {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        match self {
+            Plan::Basic => "Basic",
+            Plan::Pro => "Pro",
+            Plan::Enterprise => "Enterprise",
+        }
+        .fmt(f)
+    }
+}
+
 mod modal {
     use iced::advanced::layout::{self, Layout};
     use iced::advanced::overlay;
@@ -469,6 +510,18 @@ mod modal {
                 renderer,
             )
         }
+
+        fn overlay<'c>(
+            &'c mut self,
+            layout: Layout<'_>,
+            renderer: &Renderer,
+        ) -> Option<overlay::Element<'c, Message, Renderer>> {
+            self.content.as_widget_mut().overlay(
+                self.tree,
+                layout.children().next().unwrap(),
+                renderer,
+            )
+        }
     }
 
     impl<'a, Message, Renderer> From<Modal<'a, Message, Renderer>>
diff --git a/examples/toast/src/main.rs b/examples/toast/src/main.rs
index 395cbc1075..4282ddcf61 100644
--- a/examples/toast/src/main.rs
+++ b/examples/toast/src/main.rs
@@ -650,7 +650,12 @@ mod toast {
                 .unwrap_or_default()
         }
 
-        fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+        fn is_over(
+            &self,
+            layout: Layout<'_>,
+            _renderer: &Renderer,
+            cursor_position: Point,
+        ) -> bool {
             layout
                 .children()
                 .any(|layout| layout.bounds().contains(cursor_position))
diff --git a/runtime/src/lib.rs b/runtime/src/lib.rs
index 50abf7b27e..4bbf9687bc 100644
--- a/runtime/src/lib.rs
+++ b/runtime/src/lib.rs
@@ -47,6 +47,7 @@ pub mod clipboard;
 pub mod command;
 pub mod font;
 pub mod keyboard;
+pub mod overlay;
 pub mod program;
 pub mod system;
 pub mod user_interface;
diff --git a/runtime/src/overlay.rs b/runtime/src/overlay.rs
new file mode 100644
index 0000000000..03390980bb
--- /dev/null
+++ b/runtime/src/overlay.rs
@@ -0,0 +1,4 @@
+//! Overlays for user interfaces.
+mod nested;
+
+pub use nested::Nested;
diff --git a/runtime/src/overlay/nested.rs b/runtime/src/overlay/nested.rs
new file mode 100644
index 0000000000..cd258ab687
--- /dev/null
+++ b/runtime/src/overlay/nested.rs
@@ -0,0 +1,353 @@
+use crate::core::event;
+use crate::core::layout;
+use crate::core::mouse;
+use crate::core::overlay;
+use crate::core::renderer;
+use crate::core::widget;
+use crate::core::{Clipboard, Event, Layout, Point, Rectangle, Shell, Size};
+
+/// An [`Overlay`] container that displays nested overlays
+#[allow(missing_debug_implementations)]
+pub struct Nested<'a, Message, Renderer> {
+    overlay: overlay::Element<'a, Message, Renderer>,
+}
+
+impl<'a, Message, Renderer> Nested<'a, Message, Renderer>
+where
+    Renderer: renderer::Renderer,
+{
+    /// Creates a nested overlay from the provided [`overlay::Element`]
+    pub fn new(element: overlay::Element<'a, Message, Renderer>) -> Self {
+        Self { overlay: element }
+    }
+
+    /// Returns the position of the [`Nested`] overlay.
+    pub fn position(&self) -> Point {
+        self.overlay.position()
+    }
+
+    /// Returns the layout [`Node`] of the [`Nested`] overlay.
+    pub fn layout(
+        &mut self,
+        renderer: &Renderer,
+        bounds: Size,
+        position: Point,
+    ) -> layout::Node {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            renderer: &Renderer,
+            bounds: Size,
+            position: Point,
+        ) -> layout::Node
+        where
+            Renderer: renderer::Renderer,
+        {
+            let translation = position - element.position();
+
+            let node = element.layout(renderer, bounds, translation);
+
+            if let Some(mut nested) =
+                element.overlay(Layout::new(&node), renderer)
+            {
+                layout::Node::with_children(
+                    node.size(),
+                    vec![
+                        node,
+                        recurse(&mut nested, renderer, bounds, position),
+                    ],
+                )
+            } else {
+                layout::Node::with_children(node.size(), vec![node])
+            }
+        }
+
+        recurse(&mut self.overlay, renderer, bounds, position)
+    }
+
+    /// Draws the [`Nested`] overlay using the associated `Renderer`.
+    pub fn draw(
+        &mut self,
+        renderer: &mut Renderer,
+        theme: &<Renderer as renderer::Renderer>::Theme,
+        style: &renderer::Style,
+        layout: Layout<'_>,
+        cursor: mouse::Cursor,
+    ) {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            layout: Layout<'_>,
+            renderer: &mut Renderer,
+            theme: &<Renderer as renderer::Renderer>::Theme,
+            style: &renderer::Style,
+            cursor: mouse::Cursor,
+        ) where
+            Renderer: renderer::Renderer,
+        {
+            let mut layouts = layout.children();
+
+            if let Some(layout) = layouts.next() {
+                let nested_layout = layouts.next();
+
+                let is_over = cursor
+                    .position()
+                    .zip(nested_layout)
+                    .and_then(|(cursor_position, nested_layout)| {
+                        element.overlay(layout, renderer).map(|nested| {
+                            nested.is_over(
+                                nested_layout.children().next().unwrap(),
+                                renderer,
+                                cursor_position,
+                            )
+                        })
+                    })
+                    .unwrap_or_default();
+
+                renderer.with_layer(layout.bounds(), |renderer| {
+                    element.draw(
+                        renderer,
+                        theme,
+                        style,
+                        layout,
+                        if is_over {
+                            mouse::Cursor::Unavailable
+                        } else {
+                            cursor
+                        },
+                    );
+                });
+
+                if let Some((mut nested, nested_layout)) =
+                    element.overlay(layout, renderer).zip(nested_layout)
+                {
+                    recurse(
+                        &mut nested,
+                        nested_layout,
+                        renderer,
+                        theme,
+                        style,
+                        cursor,
+                    );
+                }
+            }
+        }
+
+        recurse(&mut self.overlay, layout, renderer, theme, style, cursor);
+    }
+
+    /// Applies a [`widget::Operation`] to the [`Nested`] overlay.
+    pub fn operate(
+        &mut self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        operation: &mut dyn widget::Operation<Message>,
+    ) {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            layout: Layout<'_>,
+            renderer: &Renderer,
+            operation: &mut dyn widget::Operation<Message>,
+        ) where
+            Renderer: renderer::Renderer,
+        {
+            let mut layouts = layout.children();
+
+            if let Some(layout) = layouts.next() {
+                element.operate(layout, renderer, operation);
+
+                if let Some((mut nested, nested_layout)) =
+                    element.overlay(layout, renderer).zip(layouts.next())
+                {
+                    recurse(&mut nested, nested_layout, renderer, operation);
+                }
+            }
+        }
+
+        recurse(&mut self.overlay, layout, renderer, operation)
+    }
+
+    /// Processes a runtime [`Event`].
+    pub fn on_event(
+        &mut self,
+        event: Event,
+        layout: Layout<'_>,
+        cursor: mouse::Cursor,
+        renderer: &Renderer,
+        clipboard: &mut dyn Clipboard,
+        shell: &mut Shell<'_, Message>,
+    ) -> event::Status {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            layout: Layout<'_>,
+            event: Event,
+            cursor: mouse::Cursor,
+            renderer: &Renderer,
+            clipboard: &mut dyn Clipboard,
+            shell: &mut Shell<'_, Message>,
+        ) -> (event::Status, bool)
+        where
+            Renderer: renderer::Renderer,
+        {
+            let mut layouts = layout.children();
+
+            if let Some(layout) = layouts.next() {
+                let (nested_status, nested_is_over) =
+                    if let Some((mut nested, nested_layout)) =
+                        element.overlay(layout, renderer).zip(layouts.next())
+                    {
+                        recurse(
+                            &mut nested,
+                            nested_layout,
+                            event.clone(),
+                            cursor,
+                            renderer,
+                            clipboard,
+                            shell,
+                        )
+                    } else {
+                        (event::Status::Ignored, false)
+                    };
+
+                if matches!(nested_status, event::Status::Ignored) {
+                    let is_over = nested_is_over
+                        || cursor
+                            .position()
+                            .map(|cursor_position| {
+                                element.is_over(
+                                    layout,
+                                    renderer,
+                                    cursor_position,
+                                )
+                            })
+                            .unwrap_or_default();
+
+                    (
+                        element.on_event(
+                            event,
+                            layout,
+                            if nested_is_over {
+                                mouse::Cursor::Unavailable
+                            } else {
+                                cursor
+                            },
+                            renderer,
+                            clipboard,
+                            shell,
+                        ),
+                        is_over,
+                    )
+                } else {
+                    (nested_status, nested_is_over)
+                }
+            } else {
+                (event::Status::Ignored, false)
+            }
+        }
+
+        let (status, _) = recurse(
+            &mut self.overlay,
+            layout,
+            event,
+            cursor,
+            renderer,
+            clipboard,
+            shell,
+        );
+
+        status
+    }
+
+    /// Returns the current [`mouse::Interaction`] of the [`Nested`] overlay.
+    pub fn mouse_interaction(
+        &mut self,
+        layout: Layout<'_>,
+        cursor: mouse::Cursor,
+        viewport: &Rectangle,
+        renderer: &Renderer,
+    ) -> mouse::Interaction {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            layout: Layout<'_>,
+            cursor: mouse::Cursor,
+            viewport: &Rectangle,
+            renderer: &Renderer,
+        ) -> Option<mouse::Interaction>
+        where
+            Renderer: renderer::Renderer,
+        {
+            let mut layouts = layout.children();
+
+            let layout = layouts.next()?;
+            let cursor_position = cursor.position()?;
+
+            if !element.is_over(layout, renderer, cursor_position) {
+                return None;
+            }
+
+            Some(
+                element
+                    .overlay(layout, renderer)
+                    .zip(layouts.next())
+                    .and_then(|(mut overlay, layout)| {
+                        recurse(
+                            &mut overlay,
+                            layout,
+                            cursor,
+                            viewport,
+                            renderer,
+                        )
+                    })
+                    .unwrap_or_else(|| {
+                        element.mouse_interaction(
+                            layout, cursor, viewport, renderer,
+                        )
+                    }),
+            )
+        }
+
+        recurse(&mut self.overlay, layout, cursor, viewport, renderer)
+            .unwrap_or_default()
+    }
+
+    /// Returns true if the cursor is over the [`Nested`] overlay.
+    pub fn is_over(
+        &mut self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
+        fn recurse<Message, Renderer>(
+            element: &mut overlay::Element<'_, Message, Renderer>,
+            layout: Layout<'_>,
+            renderer: &Renderer,
+            cursor_position: Point,
+        ) -> bool
+        where
+            Renderer: renderer::Renderer,
+        {
+            let mut layouts = layout.children();
+
+            if let Some(layout) = layouts.next() {
+                if element.is_over(layout, renderer, cursor_position) {
+                    return true;
+                }
+
+                if let Some((mut nested, nested_layout)) =
+                    element.overlay(layout, renderer).zip(layouts.next())
+                {
+                    recurse(
+                        &mut nested,
+                        nested_layout,
+                        renderer,
+                        cursor_position,
+                    )
+                } else {
+                    false
+                }
+            } else {
+                false
+            }
+        }
+
+        recurse(&mut self.overlay, layout, renderer, cursor_position)
+    }
+}
diff --git a/runtime/src/user_interface.rs b/runtime/src/user_interface.rs
index 68ff6158f0..619423fdf6 100644
--- a/runtime/src/user_interface.rs
+++ b/runtime/src/user_interface.rs
@@ -5,8 +5,8 @@ use crate::core::mouse;
 use crate::core::renderer;
 use crate::core::widget;
 use crate::core::window;
-use crate::core::{Clipboard, Rectangle, Size, Vector};
-use crate::core::{Element, Layout, Shell};
+use crate::core::{Clipboard, Element, Layout, Point, Rectangle, Shell, Size};
+use crate::overlay;
 
 /// A set of interactive graphical elements with a specific [`Layout`].
 ///
@@ -185,18 +185,18 @@ where
         let mut outdated = false;
         let mut redraw_request = None;
 
-        let mut manual_overlay =
-            ManuallyDrop::new(self.root.as_widget_mut().overlay(
-                &mut self.state,
-                Layout::new(&self.base),
-                renderer,
-            ));
+        let mut manual_overlay = ManuallyDrop::new(
+            self.root
+                .as_widget_mut()
+                .overlay(&mut self.state, Layout::new(&self.base), renderer)
+                .map(overlay::Nested::new),
+        );
 
         let (base_cursor, overlay_statuses) = if manual_overlay.is_some() {
             let bounds = self.bounds;
 
             let mut overlay = manual_overlay.as_mut().unwrap();
-            let mut layout = overlay.layout(renderer, bounds, Vector::ZERO);
+            let mut layout = overlay.layout(renderer, bounds, Point::ORIGIN);
             let mut event_statuses = Vec::new();
 
             for event in events.iter().cloned() {
@@ -231,12 +231,16 @@ where
                         &layout::Limits::new(Size::ZERO, self.bounds),
                     );
 
-                    manual_overlay =
-                        ManuallyDrop::new(self.root.as_widget_mut().overlay(
-                            &mut self.state,
-                            Layout::new(&self.base),
-                            renderer,
-                        ));
+                    manual_overlay = ManuallyDrop::new(
+                        self.root
+                            .as_widget_mut()
+                            .overlay(
+                                &mut self.state,
+                                Layout::new(&self.base),
+                                renderer,
+                            )
+                            .map(overlay::Nested::new),
+                    );
 
                     if manual_overlay.is_none() {
                         break;
@@ -245,7 +249,8 @@ where
                     overlay = manual_overlay.as_mut().unwrap();
 
                     shell.revalidate_layout(|| {
-                        layout = overlay.layout(renderer, bounds, Vector::ZERO);
+                        layout =
+                            overlay.layout(renderer, bounds, Point::ORIGIN);
                     });
                 }
 
@@ -254,19 +259,23 @@ where
                 }
             }
 
-            let base_cursor = manual_overlay
-                .as_ref()
-                .filter(|overlay| {
-                    cursor
-                        .position()
-                        .map(|cursor_position| {
-                            overlay
-                                .is_over(Layout::new(&layout), cursor_position)
-                        })
-                        .unwrap_or_default()
+            let base_cursor = if manual_overlay
+                .as_mut()
+                .and_then(|overlay| {
+                    cursor.position().map(|cursor_position| {
+                        overlay.is_over(
+                            Layout::new(&layout),
+                            renderer,
+                            cursor_position,
+                        )
+                    })
                 })
-                .map(|_| mouse::Cursor::Unavailable)
-                .unwrap_or(cursor);
+                .unwrap_or_default()
+            {
+                mouse::Cursor::Unavailable
+            } else {
+                cursor
+            };
 
             self.overlay = Some(layout);
 
@@ -424,20 +433,24 @@ where
 
         let viewport = Rectangle::with_size(self.bounds);
 
-        let base_cursor = if let Some(overlay) = self
+        let base_cursor = if let Some(mut overlay) = self
             .root
             .as_widget_mut()
             .overlay(&mut self.state, Layout::new(&self.base), renderer)
+            .map(overlay::Nested::new)
         {
             let overlay_layout = self.overlay.take().unwrap_or_else(|| {
-                overlay.layout(renderer, self.bounds, Vector::ZERO)
+                overlay.layout(renderer, self.bounds, Point::ORIGIN)
             });
 
             let cursor = if cursor
                 .position()
                 .map(|cursor_position| {
-                    overlay
-                        .is_over(Layout::new(&overlay_layout), cursor_position)
+                    overlay.is_over(
+                        Layout::new(&overlay_layout),
+                        renderer,
+                        cursor_position,
+                    )
                 })
                 .unwrap_or_default()
             {
@@ -488,7 +501,8 @@ where
             .and_then(|layout| {
                 root.as_widget_mut()
                     .overlay(&mut self.state, Layout::new(base), renderer)
-                    .map(|overlay| {
+                    .map(overlay::Nested::new)
+                    .map(|mut overlay| {
                         let overlay_interaction = overlay.mouse_interaction(
                             Layout::new(layout),
                             cursor,
@@ -513,6 +527,7 @@ where
                             .map(|cursor_position| {
                                 overlay.is_over(
                                     Layout::new(layout),
+                                    renderer,
                                     cursor_position,
                                 )
                             })
@@ -540,14 +555,15 @@ where
             operation,
         );
 
-        if let Some(mut overlay) = self.root.as_widget_mut().overlay(
-            &mut self.state,
-            Layout::new(&self.base),
-            renderer,
-        ) {
+        if let Some(mut overlay) = self
+            .root
+            .as_widget_mut()
+            .overlay(&mut self.state, Layout::new(&self.base), renderer)
+            .map(overlay::Nested::new)
+        {
             if self.overlay.is_none() {
                 self.overlay =
-                    Some(overlay.layout(renderer, self.bounds, Vector::ZERO));
+                    Some(overlay.layout(renderer, self.bounds, Point::ORIGIN));
             }
 
             overlay.operate(
diff --git a/widget/src/lazy.rs b/widget/src/lazy.rs
index 92a611c30e..4903d0ed12 100644
--- a/widget/src/lazy.rs
+++ b/widget/src/lazy.rs
@@ -20,6 +20,7 @@ use crate::core::Element;
 use crate::core::{
     self, Clipboard, Hasher, Length, Point, Rectangle, Shell, Size,
 };
+use crate::runtime::overlay::Nested;
 
 use ouroboros::self_referencing;
 use std::cell::RefCell;
@@ -260,14 +261,17 @@ where
                     .unwrap(),
                 tree: &mut tree.children[0],
                 overlay_builder: |element, tree| {
-                    element.as_widget_mut().overlay(tree, layout, renderer)
+                    element
+                        .as_widget_mut()
+                        .overlay(tree, layout, renderer)
+                        .map(|overlay| RefCell::new(Nested::new(overlay)))
                 },
             }
             .build(),
         ));
 
-        let has_overlay = overlay
-            .with_overlay_maybe(|overlay| overlay::Element::position(overlay));
+        let has_overlay =
+            overlay.with_overlay_maybe(|overlay| overlay.position());
 
         has_overlay
             .map(|position| overlay::Element::new(position, Box::new(overlay)))
@@ -285,8 +289,8 @@ where
     tree: &'a mut Tree,
 
     #[borrows(mut element, mut tree)]
-    #[covariant]
-    overlay: Option<overlay::Element<'this, Message, Renderer>>,
+    #[not_covariant]
+    overlay: Option<RefCell<Nested<'this, Message, Renderer>>>,
 }
 
 struct Overlay<'a, Message, Renderer>(Option<Inner<'a, Message, Renderer>>);
@@ -301,19 +305,20 @@ impl<'a, Message, Renderer> Drop for Overlay<'a, Message, Renderer> {
 impl<'a, Message, Renderer> Overlay<'a, Message, Renderer> {
     fn with_overlay_maybe<T>(
         &self,
-        f: impl FnOnce(&overlay::Element<'_, Message, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Message, Renderer>) -> T,
     ) -> Option<T> {
-        self.0.as_ref().unwrap().borrow_overlay().as_ref().map(f)
+        self.0.as_ref().unwrap().with_overlay(|overlay| {
+            overlay.as_ref().map(|nested| (f)(&mut nested.borrow_mut()))
+        })
     }
 
     fn with_overlay_mut_maybe<T>(
         &mut self,
-        f: impl FnOnce(&mut overlay::Element<'_, Message, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Message, Renderer>) -> T,
     ) -> Option<T> {
-        self.0
-            .as_mut()
-            .unwrap()
-            .with_overlay_mut(|overlay| overlay.as_mut().map(f))
+        self.0.as_mut().unwrap().with_overlay_mut(|overlay| {
+            overlay.as_mut().map(|nested| (f)(nested.get_mut()))
+        })
     }
 }
 
@@ -329,9 +334,7 @@ where
         position: Point,
     ) -> layout::Node {
         self.with_overlay_maybe(|overlay| {
-            let translation = position - overlay.position();
-
-            overlay.layout(renderer, bounds, translation)
+            overlay.layout(renderer, bounds, position)
         })
         .unwrap_or_default()
     }
@@ -377,9 +380,14 @@ where
         .unwrap_or(event::Status::Ignored)
     }
 
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
         self.with_overlay_maybe(|overlay| {
-            overlay.is_over(layout, cursor_position)
+            overlay.is_over(layout, renderer, cursor_position)
         })
         .unwrap_or_default()
     }
diff --git a/widget/src/lazy/component.rs b/widget/src/lazy/component.rs
index f462c8cfdb..f955d9dd65 100644
--- a/widget/src/lazy/component.rs
+++ b/widget/src/lazy/component.rs
@@ -9,6 +9,7 @@ use crate::core::widget::tree::{self, Tree};
 use crate::core::{
     self, Clipboard, Element, Length, Point, Rectangle, Shell, Size, Widget,
 };
+use crate::runtime::overlay::Nested;
 
 use ouroboros::self_referencing;
 use std::cell::RefCell;
@@ -455,11 +456,18 @@ where
                 overlay_builder: |instance, tree| {
                     instance.state.get_mut().as_mut().unwrap().with_element_mut(
                         move |element| {
-                            element.as_mut().unwrap().as_widget_mut().overlay(
-                                &mut tree.children[0],
-                                layout,
-                                renderer,
-                            )
+                            element
+                                .as_mut()
+                                .unwrap()
+                                .as_widget_mut()
+                                .overlay(
+                                    &mut tree.children[0],
+                                    layout,
+                                    renderer,
+                                )
+                                .map(|overlay| {
+                                    RefCell::new(Nested::new(overlay))
+                                })
                         },
                     )
                 },
@@ -468,7 +476,7 @@ where
         ));
 
         let has_overlay = overlay.0.as_ref().unwrap().with_overlay(|overlay| {
-            overlay.as_ref().map(overlay::Element::position)
+            overlay.as_ref().map(|nested| nested.borrow().position())
         });
 
         has_overlay.map(|position| {
@@ -503,8 +511,8 @@ struct Inner<'a, 'b, Message, Renderer, Event, S> {
     types: PhantomData<(Message, Event, S)>,
 
     #[borrows(mut instance, mut tree)]
-    #[covariant]
-    overlay: Option<overlay::Element<'this, Event, Renderer>>,
+    #[not_covariant]
+    overlay: Option<RefCell<Nested<'this, Event, Renderer>>>,
 }
 
 struct OverlayInstance<'a, 'b, Message, Renderer, Event, S> {
@@ -516,7 +524,7 @@ impl<'a, 'b, Message, Renderer, Event, S>
 {
     fn with_overlay_maybe<T>(
         &self,
-        f: impl FnOnce(&overlay::Element<'_, Event, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Event, Renderer>) -> T,
     ) -> Option<T> {
         self.overlay
             .as_ref()
@@ -524,14 +532,14 @@ impl<'a, 'b, Message, Renderer, Event, S>
             .0
             .as_ref()
             .unwrap()
-            .borrow_overlay()
-            .as_ref()
-            .map(f)
+            .with_overlay(|overlay| {
+                overlay.as_ref().map(|nested| (f)(&mut nested.borrow_mut()))
+            })
     }
 
     fn with_overlay_mut_maybe<T>(
         &mut self,
-        f: impl FnOnce(&mut overlay::Element<'_, Event, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Event, Renderer>) -> T,
     ) -> Option<T> {
         self.overlay
             .as_mut()
@@ -539,7 +547,9 @@ impl<'a, 'b, Message, Renderer, Event, S>
             .0
             .as_mut()
             .unwrap()
-            .with_overlay_mut(|overlay| overlay.as_mut().map(f))
+            .with_overlay_mut(|overlay| {
+                overlay.as_mut().map(|nested| (f)(nested.get_mut()))
+            })
     }
 }
 
@@ -556,9 +566,7 @@ where
         position: Point,
     ) -> layout::Node {
         self.with_overlay_maybe(|overlay| {
-            let translation = position - overlay.position();
-
-            overlay.layout(renderer, bounds, translation)
+            overlay.layout(renderer, bounds, position)
         })
         .unwrap_or_default()
     }
@@ -655,9 +663,14 @@ where
         event_status
     }
 
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
         self.with_overlay_maybe(|overlay| {
-            overlay.is_over(layout, cursor_position)
+            overlay.is_over(layout, renderer, cursor_position)
         })
         .unwrap_or_default()
     }
diff --git a/widget/src/lazy/responsive.rs b/widget/src/lazy/responsive.rs
index bd6385bcec..07300857ab 100644
--- a/widget/src/lazy/responsive.rs
+++ b/widget/src/lazy/responsive.rs
@@ -9,6 +9,7 @@ use crate::core::{
     self, Clipboard, Element, Length, Point, Rectangle, Shell, Size, Widget,
 };
 use crate::horizontal_space;
+use crate::runtime::overlay::Nested;
 
 use ouroboros::self_referencing;
 use std::cell::{RefCell, RefMut};
@@ -298,13 +299,13 @@ where
                 element
                     .as_widget_mut()
                     .overlay(tree, content_layout, renderer)
+                    .map(|overlay| RefCell::new(Nested::new(overlay)))
             },
         }
         .build();
 
-        let has_overlay = overlay.with_overlay(|overlay| {
-            overlay.as_ref().map(overlay::Element::position)
-        });
+        let has_overlay =
+            overlay.with_overlay_maybe(|overlay| overlay.position());
 
         has_overlay
             .map(|position| overlay::Element::new(position, Box::new(overlay)))
@@ -329,23 +330,27 @@ struct Overlay<'a, 'b, Message, Renderer> {
     types: PhantomData<Message>,
 
     #[borrows(mut content, mut tree)]
-    #[covariant]
-    overlay: Option<overlay::Element<'this, Message, Renderer>>,
+    #[not_covariant]
+    overlay: Option<RefCell<Nested<'this, Message, Renderer>>>,
 }
 
 impl<'a, 'b, Message, Renderer> Overlay<'a, 'b, Message, Renderer> {
     fn with_overlay_maybe<T>(
         &self,
-        f: impl FnOnce(&overlay::Element<'_, Message, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Message, Renderer>) -> T,
     ) -> Option<T> {
-        self.borrow_overlay().as_ref().map(f)
+        self.with_overlay(|overlay| {
+            overlay.as_ref().map(|nested| (f)(&mut nested.borrow_mut()))
+        })
     }
 
     fn with_overlay_mut_maybe<T>(
         &mut self,
-        f: impl FnOnce(&mut overlay::Element<'_, Message, Renderer>) -> T,
+        f: impl FnOnce(&mut Nested<'_, Message, Renderer>) -> T,
     ) -> Option<T> {
-        self.with_overlay_mut(|overlay| overlay.as_mut().map(f))
+        self.with_overlay_mut(|overlay| {
+            overlay.as_mut().map(|nested| (f)(nested.get_mut()))
+        })
     }
 }
 
@@ -361,9 +366,7 @@ where
         position: Point,
     ) -> layout::Node {
         self.with_overlay_maybe(|overlay| {
-            let translation = position - overlay.position();
-
-            overlay.layout(renderer, bounds, translation)
+            overlay.layout(renderer, bounds, position)
         })
         .unwrap_or_default()
     }
@@ -409,9 +412,14 @@ where
         .unwrap_or(event::Status::Ignored)
     }
 
-    fn is_over(&self, layout: Layout<'_>, cursor_position: Point) -> bool {
+    fn is_over(
+        &self,
+        layout: Layout<'_>,
+        renderer: &Renderer,
+        cursor_position: Point,
+    ) -> bool {
         self.with_overlay_maybe(|overlay| {
-            overlay.is_over(layout, cursor_position)
+            overlay.is_over(layout, renderer, cursor_position)
         })
         .unwrap_or_default()
     }
diff --git a/widget/src/overlay/menu.rs b/widget/src/overlay/menu.rs
index b699def0e6..ccf4dfb56d 100644
--- a/widget/src/overlay/menu.rs
+++ b/widget/src/overlay/menu.rs
@@ -19,7 +19,7 @@ pub use iced_style::menu::{Appearance, StyleSheet};
 
 /// A list of selectable options.
 #[allow(missing_debug_implementations)]
-pub struct Menu<'a, T, Renderer = crate::Renderer>
+pub struct Menu<'a, T, Message, Renderer = crate::Renderer>
 where
     Renderer: text::Renderer,
     Renderer::Theme: StyleSheet,
@@ -27,7 +27,7 @@ where
     state: &'a mut State,
     options: &'a [T],
     hovered_option: &'a mut Option<usize>,
-    last_selection: &'a mut Option<T>,
+    on_selected: Box<dyn FnMut(T) -> Message + 'a>,
     width: f32,
     padding: Padding,
     text_size: Option<f32>,
@@ -37,9 +37,10 @@ where
     style: <Renderer::Theme as StyleSheet>::Style,
 }
 
-impl<'a, T, Renderer> Menu<'a, T, Renderer>
+impl<'a, T, Message, Renderer> Menu<'a, T, Message, Renderer>
 where
     T: ToString + Clone,
+    Message: 'a,
     Renderer: text::Renderer + 'a,
     Renderer::Theme:
         StyleSheet + container::StyleSheet + scrollable::StyleSheet,
@@ -50,13 +51,13 @@ where
         state: &'a mut State,
         options: &'a [T],
         hovered_option: &'a mut Option<usize>,
-        last_selection: &'a mut Option<T>,
+        on_selected: impl FnMut(T) -> Message + 'a,
     ) -> Self {
         Menu {
             state,
             options,
             hovered_option,
-            last_selection,
+            on_selected: Box::new(on_selected),
             width: 0.0,
             padding: Padding::ZERO,
             text_size: None,
@@ -121,7 +122,7 @@ where
     /// The `target_height` will be used to display the menu either on top
     /// of the target or under it, depending on the screen position and the
     /// dimensions of the [`Menu`].
-    pub fn overlay<Message: 'a>(
+    pub fn overlay(
         self,
         position: Point,
         target_height: f32,
@@ -174,7 +175,10 @@ where
     Renderer::Theme:
         StyleSheet + container::StyleSheet + scrollable::StyleSheet,
 {
-    pub fn new<T>(menu: Menu<'a, T, Renderer>, target_height: f32) -> Self
+    pub fn new<T>(
+        menu: Menu<'a, T, Message, Renderer>,
+        target_height: f32,
+    ) -> Self
     where
         T: Clone + ToString,
     {
@@ -182,7 +186,7 @@ where
             state,
             options,
             hovered_option,
-            last_selection,
+            on_selected,
             width,
             padding,
             font,
@@ -195,7 +199,7 @@ where
         let container = Container::new(Scrollable::new(List {
             options,
             hovered_option,
-            last_selection,
+            on_selected,
             font,
             text_size,
             text_line_height,
@@ -306,14 +310,14 @@ where
     }
 }
 
-struct List<'a, T, Renderer>
+struct List<'a, T, Message, Renderer>
 where
     Renderer: text::Renderer,
     Renderer::Theme: StyleSheet,
 {
     options: &'a [T],
     hovered_option: &'a mut Option<usize>,
-    last_selection: &'a mut Option<T>,
+    on_selected: Box<dyn FnMut(T) -> Message + 'a>,
     padding: Padding,
     text_size: Option<f32>,
     text_line_height: text::LineHeight,
@@ -323,7 +327,7 @@ where
 }
 
 impl<'a, T, Message, Renderer> Widget<Message, Renderer>
-    for List<'a, T, Renderer>
+    for List<'a, T, Message, Renderer>
 where
     T: Clone + ToString,
     Renderer: text::Renderer,
@@ -372,14 +376,15 @@ where
         cursor: mouse::Cursor,
         renderer: &Renderer,
         _clipboard: &mut dyn Clipboard,
-        _shell: &mut Shell<'_, Message>,
+        shell: &mut Shell<'_, Message>,
     ) -> event::Status {
         match event {
             Event::Mouse(mouse::Event::ButtonPressed(mouse::Button::Left)) => {
                 if cursor.is_over(layout.bounds()) {
                     if let Some(index) = *self.hovered_option {
                         if let Some(option) = self.options.get(index) {
-                            *self.last_selection = Some(option.clone());
+                            shell.publish((self.on_selected)(option.clone()));
+                            return event::Status::Captured;
                         }
                     }
                 }
@@ -417,7 +422,8 @@ where
 
                     if let Some(index) = *self.hovered_option {
                         if let Some(option) = self.options.get(index) {
-                            *self.last_selection = Some(option.clone());
+                            shell.publish((self.on_selected)(option.clone()));
+                            return event::Status::Captured;
                         }
                     }
                 }
@@ -521,7 +527,7 @@ where
     }
 }
 
-impl<'a, T, Message, Renderer> From<List<'a, T, Renderer>>
+impl<'a, T, Message, Renderer> From<List<'a, T, Message, Renderer>>
     for Element<'a, Message, Renderer>
 where
     T: ToString + Clone,
@@ -529,7 +535,7 @@ where
     Renderer: 'a + text::Renderer,
     Renderer::Theme: StyleSheet,
 {
-    fn from(list: List<'a, T, Renderer>) -> Self {
+    fn from(list: List<'a, T, Message, Renderer>) -> Self {
         Element::new(list)
     }
 }
diff --git a/widget/src/pick_list.rs b/widget/src/pick_list.rs
index dc53a9c86f..832aae6b60 100644
--- a/widget/src/pick_list.rs
+++ b/widget/src/pick_list.rs
@@ -157,11 +157,11 @@ where
         From<<Renderer::Theme as StyleSheet>::Style>,
 {
     fn tag(&self) -> tree::Tag {
-        tree::Tag::of::<State<T>>()
+        tree::Tag::of::<State>()
     }
 
     fn state(&self) -> tree::State {
-        tree::State::new(State::<T>::new())
+        tree::State::new(State::new())
     }
 
     fn width(&self) -> Length {
@@ -209,7 +209,7 @@ where
             self.on_selected.as_ref(),
             self.selected.as_ref(),
             &self.options,
-            || tree.state.downcast_mut::<State<T>>(),
+            || tree.state.downcast_mut::<State>(),
         )
     }
 
@@ -249,7 +249,7 @@ where
             self.selected.as_ref(),
             &self.handle,
             &self.style,
-            || tree.state.downcast_ref::<State<T>>(),
+            || tree.state.downcast_ref::<State>(),
         )
     }
 
@@ -259,7 +259,7 @@ where
         layout: Layout<'_>,
         renderer: &Renderer,
     ) -> Option<overlay::Element<'b, Message, Renderer>> {
-        let state = tree.state.downcast_mut::<State<T>>();
+        let state = tree.state.downcast_mut::<State>();
 
         overlay(
             layout,
@@ -269,6 +269,7 @@ where
             self.text_shaping,
             self.font.unwrap_or_else(|| renderer.default_font()),
             &self.options,
+            &self.on_selected,
             self.style.clone(),
         )
     }
@@ -295,15 +296,14 @@ where
 
 /// The local state of a [`PickList`].
 #[derive(Debug)]
-pub struct State<T> {
+pub struct State {
     menu: menu::State,
     keyboard_modifiers: keyboard::Modifiers,
     is_open: bool,
     hovered_option: Option<usize>,
-    last_selection: Option<T>,
 }
 
-impl<T> State<T> {
+impl State {
     /// Creates a new [`State`] for a [`PickList`].
     pub fn new() -> Self {
         Self {
@@ -311,12 +311,11 @@ impl<T> State<T> {
             keyboard_modifiers: keyboard::Modifiers::default(),
             is_open: bool::default(),
             hovered_option: Option::default(),
-            last_selection: Option::default(),
         }
     }
 }
 
-impl<T> Default for State<T> {
+impl Default for State {
     fn default() -> Self {
         Self::new()
     }
@@ -436,7 +435,7 @@ pub fn update<'a, T, Message>(
     on_selected: &dyn Fn(T) -> Message,
     selected: Option<&T>,
     options: &[T],
-    state: impl FnOnce() -> &'a mut State<T>,
+    state: impl FnOnce() -> &'a mut State,
 ) -> event::Status
 where
     T: PartialEq + Clone + 'a,
@@ -446,7 +445,7 @@ where
         | Event::Touch(touch::Event::FingerPressed { .. }) => {
             let state = state();
 
-            let event_status = if state.is_open {
+            if state.is_open {
                 // Event wasn't processed by overlay, so cursor was clicked either outside it's
                 // bounds or on the drop-down, either way we close the overlay.
                 state.is_open = false;
@@ -460,16 +459,6 @@ where
                 event::Status::Captured
             } else {
                 event::Status::Ignored
-            };
-
-            if let Some(last_selection) = state.last_selection.take() {
-                shell.publish((on_selected)(last_selection));
-
-                state.is_open = false;
-
-                event::Status::Captured
-            } else {
-                event_status
             }
         }
         Event::Mouse(mouse::Event::WheelScrolled {
@@ -544,12 +533,13 @@ pub fn mouse_interaction(
 /// Returns the current overlay of a [`PickList`].
 pub fn overlay<'a, T, Message, Renderer>(
     layout: Layout<'_>,
-    state: &'a mut State<T>,
+    state: &'a mut State,
     padding: Padding,
     text_size: Option<f32>,
     text_shaping: text::Shaping,
     font: Renderer::Font,
     options: &'a [T],
+    on_selected: &'a dyn Fn(T) -> Message,
     style: <Renderer::Theme as StyleSheet>::Style,
 ) -> Option<overlay::Element<'a, Message, Renderer>>
 where
@@ -570,7 +560,11 @@ where
             &mut state.menu,
             options,
             &mut state.hovered_option,
-            &mut state.last_selection,
+            |option| {
+                state.is_open = false;
+
+                (on_selected)(option)
+            },
         )
         .width(bounds.width)
         .padding(padding)
@@ -603,7 +597,7 @@ pub fn draw<'a, T, Renderer>(
     selected: Option<&T>,
     handle: &Handle<Renderer::Font>,
     style: &<Renderer::Theme as StyleSheet>::Style,
-    state: impl FnOnce() -> &'a State<T>,
+    state: impl FnOnce() -> &'a State,
 ) where
     Renderer: text::Renderer,
     Renderer::Theme: StyleSheet,