diff --git a/packages/app/src/components/Root/Root.tsx b/packages/app/src/components/Root/Root.tsx
index b0318cdaf8..7a666a020a 100644
--- a/packages/app/src/components/Root/Root.tsx
+++ b/packages/app/src/components/Root/Root.tsx
@@ -40,7 +40,6 @@ import {
   SidebarDivider,
   SidebarSpace,
   SidebarScrollWrapper,
-  SidebarExpandButton,
 } from '@backstage/core-components';
 
 const useSidebarLogoStyles = makeStyles({
@@ -99,7 +98,6 @@ export const Root = ({ children }: PropsWithChildren<{}>) => (
       <SidebarDivider />
       <Shortcuts />
       <SidebarSpace />
-      <SidebarExpandButton />
       <SidebarDivider />
       <SidebarSettings />
     </Sidebar>
diff --git a/packages/core-components/src/layout/Sidebar/Bar.test.tsx b/packages/core-components/src/layout/Sidebar/Bar.test.tsx
index 74a4fb468e..2039210c2d 100644
--- a/packages/core-components/src/layout/Sidebar/Bar.test.tsx
+++ b/packages/core-components/src/layout/Sidebar/Bar.test.tsx
@@ -28,7 +28,7 @@ import { SubmenuItem } from './SubmenuItem';
 
 async function renderScalableSidebar() {
   await renderInTestApp(
-    <Sidebar>
+    <Sidebar disableExpandOnHover>
       <SidebarSearchField onSearch={() => {}} to="/search" />
       <SidebarItem
         icon={CatalogSidebarLogo}
@@ -71,6 +71,10 @@ describe('Sidebar', () => {
       userEvent.click(screen.getByTestId('sidebar-expand-button'));
       expect(await screen.findByText('Create...')).toBeInTheDocument();
     });
+    it('Sidebar should not show expanded items when hovered on', async () => {
+      userEvent.hover(screen.getByTestId('sidebar-root'));
+      expect(await screen.queryByText('Create...')).not.toBeInTheDocument();
+    });
   });
   describe('Submenu Items', () => {
     it('Extended sidebar with submenu content hidden by default', async () => {
diff --git a/packages/core-components/src/layout/Sidebar/Bar.tsx b/packages/core-components/src/layout/Sidebar/Bar.tsx
index 23a4ae1286..1fb8dc5fc6 100644
--- a/packages/core-components/src/layout/Sidebar/Bar.tsx
+++ b/packages/core-components/src/layout/Sidebar/Bar.tsx
@@ -17,12 +17,7 @@
 import { makeStyles } from '@material-ui/core/styles';
 import useMediaQuery from '@material-ui/core/useMediaQuery';
 import clsx from 'clsx';
-import React, {
-  useState,
-  useContext,
-  PropsWithChildren,
-  useEffect,
-} from 'react';
+import React, { useState, useContext, PropsWithChildren, useRef } from 'react';
 import { sidebarConfig, SidebarContext } from './config';
 import { BackstageTheme } from '@backstage/theme';
 import { SidebarPinStateContext } from './Page';
@@ -88,24 +83,85 @@ const useStyles = makeStyles<BackstageTheme>(
   { name: 'BackstageSidebar' },
 );
 
-export function Sidebar({ children }: PropsWithChildren<{}>) {
+enum State {
+  Closed,
+  Idle,
+  Open,
+}
+
+type Props = {
+  openDelayMs?: number;
+  closeDelayMs?: number;
+  disableExpandOnHover?: boolean;
+};
+
+export function Sidebar(props: PropsWithChildren<Props>) {
+  const {
+    disableExpandOnHover = false,
+    openDelayMs = sidebarConfig.defaultOpenDelayMs,
+    closeDelayMs = sidebarConfig.defaultCloseDelayMs,
+    children,
+  } = props;
   const classes = useStyles();
-
+  const isSmallScreen = useMediaQuery<BackstageTheme>(theme =>
+    theme.breakpoints.down('md'),
+  );
+  const [state, setState] = useState(State.Closed);
+  const hoverTimerRef = useRef<number>();
   const { isPinned } = useContext(SidebarPinStateContext);
-  const [isOpen, setIsOpen] = useState(isPinned);
 
-  useEffect(() => {
+  const handleOpen = () => {
     if (isPinned) {
-      setIsOpen(true);
+      return;
     }
-  }, [isPinned]);
+    if (hoverTimerRef.current) {
+      clearTimeout(hoverTimerRef.current);
+      hoverTimerRef.current = undefined;
+    }
+    if (state !== State.Open && !isSmallScreen) {
+      hoverTimerRef.current = window.setTimeout(() => {
+        hoverTimerRef.current = undefined;
+        setState(State.Open);
+      }, openDelayMs);
+
+      setState(State.Idle);
+    }
+  };
+
+  const handleClose = () => {
+    if (isPinned) {
+      return;
+    }
+    if (hoverTimerRef.current) {
+      clearTimeout(hoverTimerRef.current);
+      hoverTimerRef.current = undefined;
+    }
+    if (state === State.Idle) {
+      setState(State.Closed);
+    } else if (state === State.Open) {
+      hoverTimerRef.current = window.setTimeout(() => {
+        hoverTimerRef.current = undefined;
+        setState(State.Closed);
+      }, closeDelayMs);
+    }
+  };
+
+  const isOpen = (state === State.Open && !isSmallScreen) || isPinned;
 
   return (
-    <div className={classes.root} data-testid="sidebar-root">
+    <div
+      className={classes.root}
+      data-testid="sidebar-root"
+      onMouseEnter={disableExpandOnHover ? () => {} : handleOpen}
+      onFocus={disableExpandOnHover ? () => {} : handleOpen}
+      onMouseLeave={disableExpandOnHover ? () => {} : handleClose}
+      onBlur={disableExpandOnHover ? () => {} : handleClose}
+    >
       <SidebarContext.Provider
         value={{
           isOpen,
-          setIsOpen,
+          handleOpen,
+          handleClose,
         }}
       >
         <div
@@ -122,26 +178,21 @@ export function Sidebar({ children }: PropsWithChildren<{}>) {
 
 export const SidebarExpandButton = () => {
   const classes = useStyles();
+  const { isOpen, handleOpen, handleClose } = useContext(SidebarContext);
+  const { isPinned } = useContext(SidebarPinStateContext);
   const isSmallScreen = useMediaQuery<BackstageTheme>(theme =>
     theme.breakpoints.down('md'),
   );
-  const { isPinned } = useContext(SidebarPinStateContext);
-  const { isOpen, setIsOpen } = useContext(SidebarContext);
-
-  const openDelayMs = sidebarConfig.defaultOpenDelayMs;
-  const closeDelayMs = sidebarConfig.defaultCloseDelayMs;
 
   const handleClick = () => {
-    if (isPinned || isSmallScreen) {
-      return;
+    if (isOpen) {
+      handleClose();
+    } else {
+      handleOpen();
     }
-    const delayMs = isOpen ? openDelayMs : closeDelayMs;
-    setTimeout(async () => {
-      setIsOpen(!isOpen);
-    }, delayMs);
   };
 
-  if (isSmallScreen || isPinned) {
+  if (isPinned || isSmallScreen) {
     return null;
   }
 
diff --git a/packages/core-components/src/layout/Sidebar/Items.test.tsx b/packages/core-components/src/layout/Sidebar/Items.test.tsx
index 34bc454fec..f4d699d09c 100644
--- a/packages/core-components/src/layout/Sidebar/Items.test.tsx
+++ b/packages/core-components/src/layout/Sidebar/Items.test.tsx
@@ -47,7 +47,7 @@ async function renderSidebar() {
       <SidebarExpandButton />
     </Sidebar>,
   );
-  userEvent.click(screen.getByTestId('sidebar-expand-button'));
+  userEvent.hover(screen.getByTestId('sidebar-root'));
 }
 
 describe('Items', () => {
diff --git a/packages/core-components/src/layout/Sidebar/Sidebar.stories.tsx b/packages/core-components/src/layout/Sidebar/Sidebar.stories.tsx
index 18bfb120e3..c95460553c 100644
--- a/packages/core-components/src/layout/Sidebar/Sidebar.stories.tsx
+++ b/packages/core-components/src/layout/Sidebar/Sidebar.stories.tsx
@@ -53,6 +53,18 @@ const handleSearch = (input: string) => {
 
 export const SampleSidebar = () => (
   <Sidebar>
+    <SidebarSearchField onSearch={handleSearch} to="/search" />
+    <SidebarDivider />
+    <SidebarItem icon={HomeOutlinedIcon} to="#" text="Plugins" />
+    <SidebarItem icon={AddCircleOutlineIcon} to="#" text="Create..." />
+    <SidebarDivider />
+    <SidebarIntro />
+    <SidebarSpace />
+  </Sidebar>
+);
+
+export const SampleScalableSidebar = () => (
+  <Sidebar disableExpandOnHover>
     <SidebarSearchField onSearch={handleSearch} to="/search" />
     <SidebarDivider />
     <SidebarItem
diff --git a/packages/core-components/src/layout/Sidebar/config.ts b/packages/core-components/src/layout/Sidebar/config.ts
index e7a9e26e1d..f9eea08ec2 100644
--- a/packages/core-components/src/layout/Sidebar/config.ts
+++ b/packages/core-components/src/layout/Sidebar/config.ts
@@ -59,12 +59,14 @@ export const SIDEBAR_INTRO_LOCAL_STORAGE =
 
 export type SidebarContextType = {
   isOpen: boolean;
-  setIsOpen: Dispatch<SetStateAction<boolean>>;
+  handleOpen: () => any;
+  handleClose: () => any;
 };
 
 export const SidebarContext = createContext<SidebarContextType>({
   isOpen: false,
-  setIsOpen: () => {},
+  handleOpen: () => {},
+  handleClose: () => {},
 });
 
 export type ItemWithSubmenuContextType = {
diff --git a/packages/core-components/src/layout/Sidebar/icons/CatalogSidebarLogo.tsx b/packages/core-components/src/layout/Sidebar/icons/CatalogSidebarLogo.tsx
index 02415d6fbc..fe37c9c74f 100644
--- a/packages/core-components/src/layout/Sidebar/icons/CatalogSidebarLogo.tsx
+++ b/packages/core-components/src/layout/Sidebar/icons/CatalogSidebarLogo.tsx
@@ -24,6 +24,7 @@ export const CatalogSidebarLogo = () => {
       height="21"
       fill="none"
       viewBox="0 0 20 21"
+      fontSize="small"
     >
       <path
         fillRule="evenodd"
diff --git a/packages/theme/src/themes.ts b/packages/theme/src/themes.ts
index dedd0ce095..b048c70fec 100644
--- a/packages/theme/src/themes.ts
+++ b/packages/theme/src/themes.ts
@@ -81,9 +81,6 @@ export const lightTheme = createTheme({
       },
       submenu: {
         background: '#404040',
-        indicator: '#9BF0E1',
-        color: '#b5b5b5',
-        selectedColor: '#FFF',
       },
     },
     pinSidebarButton: {
@@ -165,9 +162,6 @@ export const darkTheme = createTheme({
       },
       submenu: {
         background: '#404040',
-        indicator: '#9BF0E1',
-        color: '#b5b5b5',
-        selectedColor: '#FFF',
       },
     },
     pinSidebarButton: {
diff --git a/packages/theme/src/types.ts b/packages/theme/src/types.ts
index bb5f23e3af..eb04bf933e 100644
--- a/packages/theme/src/types.ts
+++ b/packages/theme/src/types.ts
@@ -58,9 +58,6 @@ export type BackstagePaletteAdditions = {
     };
     submenu: {
       background: string;
-      indicator: string;
-      color: string;
-      selectedColor: string;
     };
   };
   tabbar: {