diff --git a/.changeset/cool-meals-appear.md b/.changeset/cool-meals-appear.md
new file mode 100644
index 0000000000..42c7a7a5ee
--- /dev/null
+++ b/.changeset/cool-meals-appear.md
@@ -0,0 +1,5 @@
+---
+"@primer/view-components": patch
+---
+
+Ensure Overlays that open dialogs do not close when the Dialog opens
diff --git a/app/components/primer/dialog_helper.ts b/app/components/primer/dialog_helper.ts
index 11444e0e40..b39ad5dac4 100644
--- a/app/components/primer/dialog_helper.ts
+++ b/app/components/primer/dialog_helper.ts
@@ -46,6 +46,20 @@ export class DialogHelperElement extends HTMLElement {
       for (const record of records) {
         if (record.target === this.dialog) {
           this.ownerDocument.body.classList.toggle('has-modal', this.dialog.hasAttribute('open'))
+          // In some older browsers, such as Chrome 122, when a top layer element (such as a dialog)
+          // opens from within a popover, the "hide all popovers" internal algorithm runs, hiding
+          // any popover that is currently open, regardless of whether or not another top layer element,
+          // such as a <dialog> is nested inside.
+          // See https://github.com/whatwg/html/issues/9998.
+          // This is fixed by https://github.com/whatwg/html/pull/10116, but while we still support browsers that present this bug,
+          // we must undo the work they did to hide ancestral popovers of the dialog:
+          if (this.dialog.hasAttribute('open')) {
+            let node: HTMLElement | null = this.dialog
+            while (node) {
+              node = node.closest('[popover]:not(:popover-open)')
+              if (node) node.showPopover()
+            }
+          }
         }
       }
     }).observe(this, {subtree: true, attributeFilter: ['open']})
diff --git a/previews/primer/alpha/dialog_preview.rb b/previews/primer/alpha/dialog_preview.rb
index c92bedcd7b..40032b41f6 100644
--- a/previews/primer/alpha/dialog_preview.rb
+++ b/previews/primer/alpha/dialog_preview.rb
@@ -248,6 +248,29 @@ def scroll_container(title: "Test Dialog", subtitle: nil, position: :center, siz
                                visually_hide_title: visually_hide_title
                              })
       end
+
+      # @label Dialog inside Overlay
+      #
+      # @param title [String] text
+      # @param subtitle [String] text
+      # @param size [Symbol] select [small, medium, medium_portrait, large, xlarge]
+      # @param position [Symbol] select [center, right, left]
+      # @param position_narrow [Symbol] select [inherit, bottom, fullscreen, left, right]
+      # @param visually_hide_title [Boolean] toggle
+      # @param button_text [String] text
+      # @param body_text [String] text
+      def dialog_inside_overlay(title: "Test Dialog", subtitle: nil, position: :center, size: :medium, button_text: "Show Dialog", body_text: "Content", position_narrow: :fullscreen, visually_hide_title: false)
+        render_with_template(locals: {
+                               title: title,
+                               subtitle: subtitle,
+                               position: position,
+                               size: size,
+                               button_text: button_text,
+                               body_text: body_text,
+                               position_narrow: position_narrow,
+                               visually_hide_title: visually_hide_title
+                             })
+      end
     end
   end
 end
diff --git a/previews/primer/alpha/dialog_preview/dialog_inside_overlay.html.erb b/previews/primer/alpha/dialog_preview/dialog_inside_overlay.html.erb
new file mode 100644
index 0000000000..198d2609b7
--- /dev/null
+++ b/previews/primer/alpha/dialog_preview/dialog_inside_overlay.html.erb
@@ -0,0 +1,9 @@
+<%= render(Primer::Alpha::Overlay.new(title: "An overlay")) do |o| %>
+  <% o.with_show_button() { "Show overlay" } %>
+  <% o.with_body() do %>
+    <%= render(Primer::Alpha::Dialog.new(id: "dialog-one", title: title, position: position, subtitle: subtitle, visually_hide_title: false)) do |d| %>
+      <% d.with_show_button { button_text } %>
+      <% d.with_body { body_text} %>
+    <% end %>
+  <% end %>
+<% end %>
diff --git a/test/system/alpha/dialog_test.rb b/test/system/alpha/dialog_test.rb
index bbaef33431..95e7f1389a 100644
--- a/test/system/alpha/dialog_test.rb
+++ b/test/system/alpha/dialog_test.rb
@@ -93,5 +93,13 @@ def test_outside_menu_click_does_not_close_dialog
       find(".ActionListItem", text: "Avocado").click
       assert_selector "dialog[open]"
     end
+
+    def test_dialog_inside_overlay_opens_when_clicked
+      visit_preview(:dialog_inside_overlay)
+
+      click_button("Show overlay")
+      click_button("Show Dialog")
+      assert_selector "dialog[open]"
+    end
   end
 end