diff --git a/editor/editor_properties.cpp b/editor/editor_properties.cpp
index c134786b893..c3ccaf22a4c 100644
--- a/editor/editor_properties.cpp
+++ b/editor/editor_properties.cpp
@@ -610,6 +610,7 @@ public:
 	Vector<Rect2> flag_rects;
 	Vector<String> names;
 	Vector<String> tooltips;
+	int hovered_index;
 
 	virtual Size2 get_minimum_size() const {
 		Ref<Font> font = get_font("font", "Label");
@@ -625,57 +626,79 @@ public:
 		return String();
 	}
 	void _gui_input(const Ref<InputEvent> &p_ev) {
-		Ref<InputEventMouseButton> mb = p_ev;
-		if (mb.is_valid() && mb->get_button_index() == BUTTON_LEFT && mb->is_pressed()) {
+		const Ref<InputEventMouseMotion> mm = p_ev;
+
+		if (mm.is_valid()) {
 			for (int i = 0; i < flag_rects.size(); i++) {
-				if (flag_rects[i].has_point(mb->get_position())) {
-					//toggle
-					if (value & (1 << i)) {
-						value &= ~(1 << i);
-					} else {
-						value |= (1 << i);
-					}
-					emit_signal("flag_changed", value);
+				if (flag_rects[i].has_point(mm->get_position())) {
+					// Used to highlight the hovered flag in the layers grid.
+					hovered_index = i;
 					update();
+					break;
 				}
 			}
 		}
+
+		const Ref<InputEventMouseButton> mb = p_ev;
+
+		if (mb.is_valid() && mb->get_button_index() == BUTTON_LEFT && mb->is_pressed()) {
+			// Toggle the flag.
+			// We base our choice on the hovered flag, so that it always matches the hovered flag.
+			if (value & (1 << hovered_index)) {
+				value &= ~(1 << hovered_index);
+			} else {
+				value |= (1 << hovered_index);
+			}
+
+			emit_signal("flag_changed", value);
+			update();
+		}
 	}
 
 	void _notification(int p_what) {
-		if (p_what == NOTIFICATION_DRAW) {
+		switch (p_what) {
+			case NOTIFICATION_DRAW: {
+				Rect2 rect;
+				rect.size = get_size();
+				flag_rects.clear();
 
-			Rect2 rect;
-			rect.size = get_size();
-			flag_rects.clear();
+				const int bsize = (rect.size.height * 80 / 100) / 2;
+				const int h = bsize * 2 + 1;
+				const int vofs = (rect.size.height - h) / 2;
 
-			int bsize = (rect.size.height * 80 / 100) / 2;
+				Color color = get_color("highlight_color", "Editor");
+				for (int i = 0; i < 2; i++) {
+					Point2 ofs(4, vofs);
+					if (i == 1)
+						ofs.y += bsize + 1;
 
-			int h = bsize * 2 + 1;
-			int vofs = (rect.size.height - h) / 2;
+					ofs += rect.position;
+					for (int j = 0; j < 10; j++) {
+						Point2 o = ofs + Point2(j * (bsize + 1), 0);
+						if (j >= 5)
+							o.x += 1;
 
-			Color color = get_color("highlight_color", "Editor");
-			for (int i = 0; i < 2; i++) {
+						const int idx = i * 10 + j;
+						const bool on = value & (1 << idx);
+						Rect2 rect2 = Rect2(o, Size2(bsize, bsize));
 
-				Point2 ofs(4, vofs);
-				if (i == 1)
-					ofs.y += bsize + 1;
+						color.a = on ? 0.6 : 0.2;
+						if (idx == hovered_index) {
+							// Add visual feedback when hovering a flag.
+							color.a += 0.15;
+						}
 
-				ofs += rect.position;
-				for (int j = 0; j < 10; j++) {
-
-					Point2 o = ofs + Point2(j * (bsize + 1), 0);
-					if (j >= 5)
-						o.x += 1;
-
-					uint32_t idx = i * 10 + j;
-					bool on = value & (1 << idx);
-					Rect2 rect2 = Rect2(o, Size2(bsize, bsize));
-					color.a = on ? 0.6 : 0.2;
-					draw_rect(rect2, color);
-					flag_rects.push_back(rect2);
+						draw_rect(rect2, color);
+						flag_rects.push_back(rect2);
+					}
 				}
-			}
+			} break;
+			case NOTIFICATION_MOUSE_EXIT: {
+				hovered_index = -1;
+				update();
+			} break;
+			default:
+				break;
 		}
 	}
 
@@ -692,6 +715,7 @@ public:
 
 	EditorPropertyLayersGrid() {
 		value = 0;
+		hovered_index = -1; // Nothing is hovered.
 	}
 };
 void EditorPropertyLayers::_grid_changed(uint32_t p_grid) {
@@ -792,7 +816,7 @@ EditorPropertyLayers::EditorPropertyLayers() {
 	hb->add_child(grid);
 	button = memnew(Button);
 	button->set_toggle_mode(true);
-	button->set_text("..");
+	button->set_text("...");
 	button->connect("pressed", this, "_button_pressed");
 	hb->add_child(button);
 	set_bottom_editor(hb);