diff --git a/client/src/components/Conversations/Convo.tsx b/client/src/components/Conversations/Convo.tsx
index a4d584a642..108755a291 100644
--- a/client/src/components/Conversations/Convo.tsx
+++ b/client/src/components/Conversations/Convo.tsx
@@ -47,6 +47,7 @@ export default function Conversation({
   const [hasInteracted, setHasInteracted] = useState(false);
 
   const previousTitle = useRef(title);
+  const containerRef = useRef<HTMLDivElement>(null);
 
   useEffect(() => {
     if (title !== previousTitle.current) {
@@ -109,6 +110,37 @@ export default function Conversation({
     }
   }, [hasInteracted]);
 
+  const handleMouseLeave = useCallback(() => {
+    if (!isPopoverActive) {
+      setHasInteracted(false);
+    }
+  }, [isPopoverActive]);
+
+  const handleBlur = useCallback(
+    (e: React.FocusEvent<HTMLDivElement>) => {
+      // Don't reset if focus is moving to a child element within this container
+      if (e.currentTarget.contains(e.relatedTarget as Node)) {
+        return;
+      }
+      if (!isPopoverActive) {
+        setHasInteracted(false);
+      }
+    },
+    [isPopoverActive],
+  );
+
+  const handlePopoverOpenChange = useCallback((open: boolean) => {
+    setIsPopoverActive(open);
+    if (!open) {
+      requestAnimationFrame(() => {
+        const container = containerRef.current;
+        if (container && !container.contains(document.activeElement)) {
+          setHasInteracted(false);
+        }
+      });
+    }
+  }, []);
+
   const handleNavigation = (ctrlOrMetaKey: boolean) => {
     if (ctrlOrMetaKey) {
       toggleNav();
@@ -141,12 +173,13 @@ export default function Conversation({
     isActiveConvo,
     conversationId,
     isPopoverActive,
-    setIsPopoverActive,
+    setIsPopoverActive: handlePopoverOpenChange,
     isShiftHeld: isActiveConvo ? isShiftHeld : false,
   };
 
   return (
     <div
+      ref={containerRef}
       className={cn(
         'group relative flex h-12 w-full items-center rounded-lg outline-none focus-visible:outline-none focus-visible:ring-2 focus-visible:ring-inset focus-visible:ring-black dark:focus-visible:ring-white md:h-9',
         isActiveConvo || isPopoverActive
@@ -159,7 +192,9 @@ export default function Conversation({
         title: title || localize('com_ui_untitled'),
       })}
       onMouseEnter={handleMouseEnter}
+      onMouseLeave={handleMouseLeave}
       onFocus={handleMouseEnter}
+      onBlur={handleBlur}
       onClick={(e) => {
         if (renaming) {
           return;
diff --git a/client/src/components/Conversations/ConvoOptions/ConvoOptions.tsx b/client/src/components/Conversations/ConvoOptions/ConvoOptions.tsx
index a7b0a780e7..25889e0e67 100644
--- a/client/src/components/Conversations/ConvoOptions/ConvoOptions.tsx
+++ b/client/src/components/Conversations/ConvoOptions/ConvoOptions.tsx
@@ -35,7 +35,7 @@ function ConvoOptions({
   retainView: () => void;
   renameHandler: (e: MouseEvent) => void;
   isPopoverActive: boolean;
-  setIsPopoverActive: React.Dispatch<React.SetStateAction<boolean>>;
+  setIsPopoverActive: (open: boolean) => void;
   isActiveConvo: boolean;
   isShiftHeld?: boolean;
 }) {
diff --git a/client/src/components/Conversations/ConvoOptions/DeleteButton.tsx b/client/src/components/Conversations/ConvoOptions/DeleteButton.tsx
index 002d555455..17691b4a08 100644
--- a/client/src/components/Conversations/ConvoOptions/DeleteButton.tsx
+++ b/client/src/components/Conversations/ConvoOptions/DeleteButton.tsx
@@ -25,7 +25,7 @@ type DeleteButtonProps = {
   showDeleteDialog?: boolean;
   setShowDeleteDialog?: (value: boolean) => void;
   triggerRef?: React.RefObject<HTMLButtonElement>;
-  setMenuOpen?: React.Dispatch<React.SetStateAction<boolean>>;
+  setMenuOpen?: (open: boolean) => void;
 };
 
 export function DeleteConversationDialog({
@@ -35,7 +35,7 @@ export function DeleteConversationDialog({
   retainView,
   title,
 }: {
-  setMenuOpen?: React.Dispatch<React.SetStateAction<boolean>>;
+  setMenuOpen?: (open: boolean) => void;
   setShowDeleteDialog: (value: boolean) => void;
   conversationId: string;
   retainView: () => void;