diff --git a/public/app/core/components/NavBar/Next/NavBarItem.tsx b/public/app/core/components/NavBar/Next/NavBarItem.tsx
index 752e8807431..fb4731ce773 100644
--- a/public/app/core/components/NavBar/Next/NavBarItem.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarItem.tsx
@@ -12,6 +12,7 @@ import { NavBarItemMenu } from './NavBarItemMenu';
 import { getNavModelItemKey } from '../utils';
 import { useLingui } from '@lingui/react';
 import menuItemTranslations from '../navBarItem-translations';
+import { useNavBarContext } from '../context';
 
 export interface Props {
   isActive?: boolean;
@@ -33,6 +34,7 @@ const NavBarItem = ({
   const { i18n } = useLingui();
   const theme = useTheme2();
   const menuItems = link.children ?? [];
+  const { menuIdOpen } = useNavBarContext();
 
   // Spreading `menuItems` here as otherwise we'd be mutating props
   const menuItemsSorted = reverseMenuDirection ? [...menuItems].reverse() : menuItems;
@@ -81,7 +83,7 @@ const NavBarItem = ({
     );
   } else {
     return (
-      <li className={cx(styles.container, className)}>
+      <li className={cx(styles.container, { [styles.containerHover]: section.id === menuIdOpen }, className)}>
         <NavBarItemMenuTrigger
           item={section}
           isActive={isActive}
@@ -126,6 +128,10 @@ export default NavBarItem;
 
 const getStyles = (theme: GrafanaTheme2, adjustHeightForBorder: boolean, isActive?: boolean) => ({
   ...getNavBarItemWithoutMenuStyles(theme, isActive),
+  containerHover: css({
+    backgroundColor: theme.colors.action.hover,
+    color: theme.colors.text.primary,
+  }),
   primaryText: css({
     color: theme.colors.text.primary,
   }),
diff --git a/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx b/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
index 9d81447e735..0d266ac2165 100644
--- a/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarItemMenuTrigger.tsx
@@ -47,9 +47,10 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
     onHoverChange: (isHovering) => {
       if (isHovering) {
         state.open();
-        setMenuIdOpen(ref.current?.id || null);
+        setMenuIdOpen(item.id);
       } else {
         state.close();
+        setMenuIdOpen(undefined);
       }
     },
   });
@@ -57,13 +58,13 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
   useEffect(() => {
     // close the menu when changing submenus
     // or when the state of the overlay changes (i.e hovering outside)
-    if (menuIdOpen !== ref.current?.id || !state.isOpen) {
+    if (menuIdOpen !== item.id || !state.isOpen) {
       state.close();
       setMenuHasFocus(false);
     } else {
       state.open();
     }
-  }, [menuIdOpen, state]);
+  }, [menuIdOpen, state, item.id]);
 
   const { keyboardProps } = useKeyboard({
     onKeyDown: (e) => {
@@ -71,11 +72,12 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
         case 'ArrowRight':
           if (!state.isOpen) {
             state.open();
+            setMenuIdOpen(item.id);
           }
           setMenuHasFocus(true);
           break;
         case 'Tab':
-          setMenuIdOpen(null);
+          setMenuIdOpen(undefined);
           break;
         default:
           break;
@@ -142,7 +144,10 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
   const { dialogProps } = useDialog({}, overlayRef);
   const { overlayProps } = useOverlay(
     {
-      onClose: () => state.close(),
+      onClose: () => {
+        state.close();
+        setMenuIdOpen(undefined);
+      },
       isOpen: state.isOpen,
       isDismissable: true,
     },
@@ -160,7 +165,7 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
     onFocusWithin: (e) => {
       if (e.target.id === ref.current?.id) {
         // If focussing on the trigger itself, set the menu id that is open
-        setMenuIdOpen(ref.current?.id);
+        setMenuIdOpen(item.id);
         state.open();
       }
     },
@@ -168,7 +173,7 @@ export function NavBarItemMenuTrigger(props: NavBarItemMenuTriggerProps): ReactE
       if (e.target?.getAttribute('role') === 'menuitem' && !overlayRef.current?.contains(e.relatedTarget)) {
         // If it is blurring from a menuitem to an element outside the current overlay
         // close the menu that is open
-        setMenuIdOpen(null);
+        setMenuIdOpen(undefined);
       }
     },
   });
diff --git a/public/app/core/components/NavBar/Next/NavBarNext.tsx b/public/app/core/components/NavBar/Next/NavBarNext.tsx
index 63cf25fcb27..a2a07fbac5e 100644
--- a/public/app/core/components/NavBar/Next/NavBarNext.tsx
+++ b/public/app/core/components/NavBar/Next/NavBarNext.tsx
@@ -59,7 +59,7 @@ export const NavBarNext = React.memo(() => {
   const activeItem = isSearchActive(location) ? searchItem : getActiveItem(navTree, location.pathname);
   const [menuOpen, setMenuOpen] = useState(false);
   const [menuAnimationInProgress, setMenuAnimationInProgress] = useState(false);
-  const [menuIdOpen, setMenuIdOpen] = useState<string | null>(null);
+  const [menuIdOpen, setMenuIdOpen] = useState<string | undefined>(undefined);
 
   if (kiosk !== KioskMode.Off) {
     return null;
diff --git a/public/app/core/components/NavBar/context.tsx b/public/app/core/components/NavBar/context.tsx
index 2beb99d8ab6..e7baf632b4c 100644
--- a/public/app/core/components/NavBar/context.tsx
+++ b/public/app/core/components/NavBar/context.tsx
@@ -18,12 +18,12 @@ export function useNavBarItemMenuContext(): NavBarItemMenuContextProps {
 }
 
 export interface NavBarContextProps {
-  menuIdOpen: string | null;
-  setMenuIdOpen: (id: string | null) => void;
+  menuIdOpen: string | undefined;
+  setMenuIdOpen: (id: string | undefined) => void;
 }
 
 export const NavBarContext = createContext<NavBarContextProps>({
-  menuIdOpen: null,
+  menuIdOpen: undefined,
   setMenuIdOpen: () => undefined,
 });