diff --git a/packages/components/CHANGELOG.md b/packages/components/CHANGELOG.md
index f7f22160c2187..0bf9776d01a5d 100644
--- a/packages/components/CHANGELOG.md
+++ b/packages/components/CHANGELOG.md
@@ -18,6 +18,7 @@
 -   `ToggleGroupControl`: indicator doesn't jump around when the layout around it changes ([#65175](https://github.com/WordPress/gutenberg/pull/65175)).
 -   `Composite`: fix legacy support for the store prop ([#65821](https://github.com/WordPress/gutenberg/pull/65821)).
 -   `Composite`: make items tabbable if active element gets removed ([#65720](https://github.com/WordPress/gutenberg/pull/65720)).
+-   `DropZone`: fix class names on drop ([#65798](https://github.com/WordPress/gutenberg/pull/65798)).
 
 ### Deprecations
 
diff --git a/packages/components/src/drop-zone/index.tsx b/packages/components/src/drop-zone/index.tsx
index d0aef35b09d4d..b1bd0199e877d 100644
--- a/packages/components/src/drop-zone/index.tsx
+++ b/packages/components/src/drop-zone/index.tsx
@@ -99,6 +99,7 @@ export function DropZoneComponent( {
 			setType( _type );
 		},
 		onDragEnd() {
+			setIsDraggingOverElement( false );
 			setIsDraggingOverDocument( false );
 			setType( undefined );
 		},
@@ -116,8 +117,6 @@ export function DropZoneComponent( {
 			( ( type === 'file' && onFilesDrop ) ||
 				( type === 'html' && onHTMLDrop ) ||
 				( type === 'default' && onDrop ) ),
-		'has-dragged-out': ! isDraggingOverElement,
-		// Keeping the following classnames for legacy purposes
 		'is-dragging-over-document': isDraggingOverDocument,
 		'is-dragging-over-element': isDraggingOverElement,
 		[ `is-dragging-${ type }` ]: !! type,
diff --git a/packages/components/src/drop-zone/style.scss b/packages/components/src/drop-zone/style.scss
index d3cd18a75b1f8..d66eaee87b8a1 100644
--- a/packages/components/src/drop-zone/style.scss
+++ b/packages/components/src/drop-zone/style.scss
@@ -42,7 +42,7 @@
 		transform: scale(0.9);
 	}
 
-	&.is-active:not(.has-dragged-out) {
+	&.is-active.is-dragging-over-element {
 		.components-drop-zone__content {
 			opacity: 1;