diff --git a/Sources/arm/App.hx b/Sources/arm/App.hx
index 68d20719..b9126c01 100644
--- a/Sources/arm/App.hx
+++ b/Sources/arm/App.hx
@@ -16,6 +16,7 @@ import arm.ui.UIView2D;
 import arm.ui.UIMenu;
 import arm.ui.UIBox;
 import arm.ui.UIFiles;
+import arm.ui.TabLayers;
 import arm.io.ImportAsset;
 import arm.sys.Path;
 import arm.util.RenderUtil;
@@ -24,6 +25,7 @@ import arm.data.MaterialSlot;
 import arm.data.LayerSlot;
 import arm.data.ConstData;
 import arm.plugin.Camera;
+import arm.node.MaterialParser;
 import arm.Config;
 import arm.Tool;
 import arm.Project;
@@ -376,6 +378,11 @@ class App {
 					}
 					UINodes.inst.acceptLayerDrag(index);
 				}
+				else if (inLayers && isDragging) {
+					Project.layers.remove(dragLayer);
+					Project.layers.insert(TabLayers.dragDestination, dragLayer);
+					MaterialParser.parseMeshMaterial();
+				}
 				dragLayer = null;
 			}
 			else if (dragFile != null) {
diff --git a/Sources/arm/ui/TabLayers.hx b/Sources/arm/ui/TabLayers.hx
index 831c4022..c4369f55 100644
--- a/Sources/arm/ui/TabLayers.hx
+++ b/Sources/arm/ui/TabLayers.hx
@@ -10,6 +10,8 @@ import arm.util.UVUtil;
 
 class TabLayers {
 
+	public static var dragDestination = 1;
+
 	@:access(zui.Zui)
 	public static function draw() {
 		var ui = UITrait.inst.ui;
@@ -80,6 +82,16 @@ class TabLayers {
 					}
 				}
 
+				// Highlight drag destination
+				var mouse = Input.getMouse();
+				var mx = mouse.x;
+				var my = mouse.y;
+				var inLayers = mx > UITrait.inst.tabx && my < UITrait.inst.tabh;
+				if (App.isDragging && App.dragLayer != null && my > ui._y - step && my < ui._y + step) {
+					ui.fill(checkw, 0, (ui._windowW / ui.SCALE() - 2) - checkw, 2 * ui.SCALE(), ui.t.HIGHLIGHT_COL);
+					dragDestination = Project.layers.indexOf(App.dragLayer) < i ? i : i + 1;
+				}
+
 				if (l.texpaint_mask != null) {
 					ui.row([8 / 100, 16 / 100, 16 / 100, 20 / 100, 30 / 100, 10 / 100]);
 				}