diff --git a/src/workspaces/components/Workspace/DragOverlay.tsx b/src/workspaces/components/Workspace/DragOverlay.tsx
new file mode 100644
index 00000000..0de1dff7
--- /dev/null
+++ b/src/workspaces/components/Workspace/DragOverlay.tsx
@@ -0,0 +1,99 @@
+import { useCallback, useEffect, useRef, useState } from 'react';
+import type { DropPosition } from './layout-utils';
+import { useWorkspace } from './WorkspaceContext';
+
+type DropTarget = {
+  panelId: string;
+  zone: DropPosition;
+  rect: DOMRect;
+};
+
+function getDropZone(rect: DOMRect, x: number, y: number): DropPosition {
+  const fx = (x - rect.left) / rect.width;
+  const fy = (y - rect.top) / rect.height;
+
+  if (fx > 0.3 && fx < 0.7 && fy > 0.3 && fy < 0.7) return 'center';
+
+  const edges: [DropPosition, number][] = [
+    ['left', fx],
+    ['right', 1 - fx],
+    ['top', fy],
+    ['bottom', 1 - fy],
+  ];
+
+  return edges.reduce((min, cur) => (cur[1] < min[1] ? cur : min))[0];
+}
+
+function getIndicatorStyle(rect: DOMRect, zone: DropPosition): React.CSSProperties {
+  switch (zone) {
+    case 'center':
+      return { left: rect.left, top: rect.top, width: rect.width, height: rect.height };
+    case 'top':
+      return { left: rect.left, top: rect.top, width: rect.width, height: rect.height / 2 };
+    case 'bottom':
+      return { left: rect.left, top: rect.top + rect.height / 2, width: rect.width, height: rect.height / 2 };
+    case 'left':
+      return { left: rect.left, top: rect.top, width: rect.width / 2, height: rect.height };
+    case 'right':
+      return { left: rect.left + rect.width / 2, top: rect.top, width: rect.width / 2, height: rect.height };
+  }
+}
+
+export const DragOverlay = () => {
+  const { dragSourceId, setDragSourceId, onMove } = useWorkspace();
+  const [target, setTarget] = useState<DropTarget | null>(null);
+  const panelRectsRef = useRef<Map<string, DOMRect>>(new Map());
+
+  useEffect(() => {
+    if (!dragSourceId) {
+      panelRectsRef.current.clear();
+      setTarget(null);
+      return;
+    }
+    const panels = document.querySelectorAll<HTMLElement>('[data-panel-id]');
+    const map = new Map<string, DOMRect>();
+    panels.forEach((el) => {
+      const id = el.dataset.panelId!;
+      if (id !== dragSourceId) map.set(id, el.getBoundingClientRect());
+    });
+    panelRectsRef.current = map;
+  }, [dragSourceId]);
+
+  const handlePointerMove = useCallback((ev: React.PointerEvent) => {
+    const { clientX: x, clientY: y } = ev;
+    let found: DropTarget | null = null;
+
+    for (const [panelId, rect] of panelRectsRef.current) {
+      if (x >= rect.left && x <= rect.right && y >= rect.top && y <= rect.bottom) {
+        found = { panelId, zone: getDropZone(rect, x, y), rect };
+        break;
+      }
+    }
+
+    setTarget(found);
+  }, []);
+
+  const handlePointerUp = useCallback(() => {
+    if (dragSourceId && target) {
+      onMove(dragSourceId, target.panelId, target.zone);
+    }
+    setDragSourceId(null);
+  }, [dragSourceId, target, onMove, setDragSourceId]);
+
+  if (!dragSourceId) return null;
+
+  return (
+    <div
+      className="fixed inset-0 z-50 cursor-grabbing"
+      onPointerMove={handlePointerMove}
+      onPointerUp={handlePointerUp}
+    >
+      {target && (
+        <div
+          className="absolute rounded-lg border-2 border-duck-teal/60 bg-duck-teal/15 pointer-events-none"
+          style={{ ...getIndicatorStyle(target.rect, target.zone), transition: 'all 75ms ease-out' }}
+        />
+      )}
+    </div>
+  );
+};
diff --git a/src/workspaces/components/Workspace/PanelSlot.tsx b/src/workspaces/components/Workspace/PanelSlot.tsx
index 8587248a..7c860768 100644
--- a/src/workspaces/components/Workspace/PanelSlot.tsx
+++ b/src/workspaces/components/Workspace/PanelSlot.tsx
@@ -1,4 +1,5 @@
-import { ArrowLeftRight } from 'lucide-react';
+import { useCallback } from 'react';
+import { ArrowLeftRight, GripVertical } from 'lucide-react';
 import type { LayoutPanel, AppRegistry, PanelComponents } from './types';
 import { useWorkspace } from './WorkspaceContext';
 import { Card } from '../Card';
@@ -48,9 +49,7 @@ const PanelContextMenu = ({ panelId, hasApp, isLastPanel, onSplit, onRemove, onC
           </ContextMenuItem>
         )}
         <ContextMenuSeparator />
-        {swapSourceId === panelId ? (
-          <ContextMenuItem onClick={() => setSwapSourceId(null)}>Cancel swap</ContextMenuItem>
-        ) : swapSourceId ? (
+        {swapSourceId ? (
           <ContextMenuItem onClick={() => setSwapSourceId(null)}>Cancel swap</ContextMenuItem>
         ) : (
           <ContextMenuItem onClick={() => setSwapSourceId(panelId)}>Swap with...</ContextMenuItem>
@@ -61,7 +60,7 @@ const PanelContextMenu = ({ panelId, hasApp, isLastPanel, onSplit, onRemove, onC
 };
 
 const SwapOverlay = ({ panelId }: { panelId: string }) => {
-  const { swapSourceId, setSwapSourceId, onSwap } = useWorkspace();
+  const { swapSourceId, onSwap } = useWorkspace();
 
   if (!swapSourceId || swapSourceId === panelId) return null;
 
@@ -99,6 +98,35 @@ const SwapSourceIndicator = ({ panelId }: { panelId: string }) => {
   );
 };
 
+const DragHandle = ({ panelId }: { panelId: string }) => {
+  const { setDragSourceId, dragSourceId } = useWorkspace();
+
+  const onPointerDown = useCallback(
+    (ev: React.PointerEvent) => {
+      ev.preventDefault();
+      setDragSourceId(panelId);
+    },
+    [panelId, setDragSourceId],
+  );
+
+  if (dragSourceId) return null;
+
+  return (
+    <div
+      className="absolute top-2 right-2 z-10 p-1.5 rounded-md bg-duck-dark/5 text-duck-dark/30 opacity-0 group-hover/panel:opacity-100 hover:!bg-duck-dark/10 hover:!text-duck-dark/60 transition-all cursor-grab"
+      onPointerDown={onPointerDown}
+    >
+      <GripVertical className="h-5 w-5" />
+    </div>
+  );
+};
+
+const DragSourceDimmer = ({ panelId }: { panelId: string }) => {
+  const { dragSourceId } = useWorkspace();
+  if (dragSourceId !== panelId) return null;
+  return <div className="absolute inset-0 z-20 rounded-lg bg-duck-dark/10 pointer-events-none" />;
+};
+
 export const PanelSlot = ({ panel, registry, components, interactive, isLastPanel, onSetApp, onSplit, onRemove }: PanelSlotProps) => {
   const PanelComponent = components?.[panel.id];
   const entry = panel.appType ? registry[panel.appType] : null;
@@ -112,14 +140,14 @@ export const PanelSlot = ({ panel, registry, components, interactive, isLastPane
       )
     : (content: React.ReactNode) => <>{content}</>;
 
-  const swapOverlays = interactive
-    ? (
-        <>
-          <SwapOverlay panelId={panel.id} />
-          <SwapSourceIndicator panelId={panel.id} />
-        </>
-      )
-    : null;
+  const overlays = interactive ? (
+    <>
+      <SwapOverlay panelId={panel.id} />
+      <SwapSourceIndicator panelId={panel.id} />
+      <DragHandle panelId={panel.id} />
+      <DragSourceDimmer panelId={panel.id} />
+    </>
+  ) : null;
 
   if (!AppComponent) {
     if (!interactive) {
@@ -131,28 +159,28 @@ export const PanelSlot = ({ panel, registry, components, interactive, isLastPane
     }
 
     return contextMenu(
-      <div className="relative h-full w-full p-1">
+      <div data-panel-id={panel.id} className="group/panel relative h-full w-full p-1">
         <Card className="relative h-full w-full flex flex-col items-center justify-center gap-3 p-4">
           <AppPicker registry={registry} onSelect={(type) => onSetApp(panel.id, type)} />
         </Card>
-        {swapOverlays}
+        {overlays}
       </div>,
     );
   }
 
   if (entry?.transparent) {
     return contextMenu(
-      <div className="relative h-full w-full p-1">
+      <div data-panel-id={panel.id} className="group/panel relative h-full w-full p-1">
         <div className="relative h-full w-full overflow-hidden">
           <AppComponent panelId={panel.id} />
         </div>
-        {swapOverlays}
+        {overlays}
       </div>,
     );
   }
 
   return contextMenu(
-    <div className="relative h-full w-full p-1">
+    <div data-panel-id={panel.id} className="group/panel relative h-full w-full p-1">
       <div
         className="relative h-full w-full overflow-hidden rounded-lg border backdrop-blur-xl p-2"
         style={{ backgroundColor: 'rgba(255, 255, 255, 0.12)', borderColor: 'rgba(255, 255, 255, 0.2)' }}
@@ -161,7 +189,7 @@ export const PanelSlot = ({ panel, registry, components, interactive, isLastPane
           <AppComponent panelId={panel.id} />
         </Card>
       </div>
-      {swapOverlays}
+      {overlays}
     </div>,
   );
 };
diff --git a/src/workspaces/components/Workspace/WorkspaceContext.ts b/src/workspaces/components/Workspace/WorkspaceContext.ts
index c9a9f8f6..42527d45 100644
--- a/src/workspaces/components/Workspace/WorkspaceContext.ts
+++ b/src/workspaces/components/Workspace/WorkspaceContext.ts
@@ -1,11 +1,16 @@
 import { createContext, useContext } from 'react';
 
+import type { DropPosition } from './layout-utils';
+
 type WorkspaceContextValue = {
   workspaceId: string | null;
   cwd: string;
   swapSourceId: string | null;
   setSwapSourceId: (id: string | null) => void;
   onSwap: (sourceId: string, targetId: string) => void;
+  dragSourceId: string | null;
+  setDragSourceId: (id: string | null) => void;
+  onMove: (sourceId: string, targetId: string, position: DropPosition) => void;
 };
 
 const noop = () => {};
@@ -16,6 +21,9 @@ const WorkspaceContext = createContext<WorkspaceContextValue>({
   swapSourceId: null,
   setSwapSourceId: noop,
   onSwap: noop,
+  dragSourceId: null,
+  setDragSourceId: noop,
+  onMove: noop,
 });
 
 export const WorkspaceProvider = WorkspaceContext.Provider;
diff --git a/src/workspaces/components/Workspace/WorkspaceLayout.tsx b/src/workspaces/components/Workspace/WorkspaceLayout.tsx
index 48978d7a..35627954 100644
--- a/src/workspaces/components/Workspace/WorkspaceLayout.tsx
+++ b/src/workspaces/components/Workspace/WorkspaceLayout.tsx
@@ -24,7 +24,7 @@ export const WorkspaceLayout = ({ layout, onLayoutChange, registry, components,
   );
 
   return (
-    <WorkspaceProvider value={{ workspaceId: workspaceId ?? null, cwd: cwd ?? '~', swapSourceId: null, setSwapSourceId: noop, onSwap: noop }}>
+    <WorkspaceProvider value={{ workspaceId: workspaceId ?? null, cwd: cwd ?? '~', swapSourceId: null, setSwapSourceId: noop, onSwap: noop, dragSourceId: null, setDragSourceId: noop, onMove: noop }}>
       <WorkspaceRenderer
         layout={layout}
         registry={registry}
diff --git a/src/workspaces/components/Workspace/WorkspaceView.tsx b/src/workspaces/components/Workspace/WorkspaceView.tsx
index dfec3147..5d68958d 100644
--- a/src/workspaces/components/Workspace/WorkspaceView.tsx
+++ b/src/workspaces/components/Workspace/WorkspaceView.tsx
@@ -1,8 +1,10 @@
 import { useState, useCallback, useEffect } from 'react';
 import type { LayoutNode, WorkspaceDefinition, AppRegistry } from './types';
-import { splitPanel, removePanel, setApp, updateSizes, swapPanels, countPanels } from './layout-utils';
+import type { DropPosition } from './layout-utils';
+import { splitPanel, removePanel, setApp, updateSizes, swapPanels, movePanel, countPanels } from './layout-utils';
 import { WorkspaceProvider } from './WorkspaceContext';
 import { WorkspaceRenderer } from './WorkspaceRenderer';
+import { DragOverlay } from './DragOverlay';
 
 type WorkspaceViewProps = {
   workspace: WorkspaceDefinition | null;
@@ -13,6 +15,7 @@ type WorkspaceViewProps = {
 
 export const WorkspaceView = ({ workspace, layout, onLayoutChange, registry }: WorkspaceViewProps) => {
   const [swapSourceId, setSwapSourceId] = useState<string | null>(null);
+  const [dragSourceId, setDragSourceId] = useState<string | null>(null);
 
   const handleSetApp = useCallback(
     (panelId: string, appType: string | null) => {
@@ -51,14 +54,33 @@ export const WorkspaceView = ({ workspace, layout, onLayoutChange, registry }: W
     [layout, onLayoutChange],
   );
 
+  const handleMove = useCallback(
+    (sourceId: string, targetId: string, position: DropPosition) => {
+      onLayoutChange(movePanel(layout, sourceId, targetId, position));
+      setDragSourceId(null);
+    },
+    [layout, onLayoutChange],
+  );
+
+  const startDrag = useCallback(
+    (id: string | null) => {
+      setSwapSourceId(null);
+      setDragSourceId(id);
+    },
+    [],
+  );
+
   useEffect(() => {
-    if (!swapSourceId) return;
+    if (!swapSourceId && !dragSourceId) return;
     const onKeyDown = (ev: KeyboardEvent) => {
-      if (ev.key === 'Escape') setSwapSourceId(null);
+      if (ev.key === 'Escape') {
+        setSwapSourceId(null);
+        setDragSourceId(null);
+      }
     };
     window.addEventListener('keydown', onKeyDown);
     return () => window.removeEventListener('keydown', onKeyDown);
-  }, [swapSourceId]);
+  }, [swapSourceId, dragSourceId]);
 
   return (
     <WorkspaceProvider
@@ -68,6 +90,9 @@ export const WorkspaceView = ({ workspace, layout, onLayoutChange, registry }: W
         swapSourceId,
         setSwapSourceId,
         onSwap: handleSwap,
+        dragSourceId,
+        setDragSourceId: startDrag,
+        onMove: handleMove,
       }}
     >
       <WorkspaceRenderer
@@ -79,6 +104,7 @@ export const WorkspaceView = ({ workspace, layout, onLayoutChange, registry }: W
         onRemove={handleRemove}
         onResized={handleResized}
       />
+      <DragOverlay />
     </WorkspaceProvider>
   );
 };
diff --git a/src/workspaces/components/Workspace/index.ts b/src/workspaces/components/Workspace/index.ts
index 9716515a..7af99951 100644
--- a/src/workspaces/components/Workspace/index.ts
+++ b/src/workspaces/components/Workspace/index.ts
@@ -1,5 +1,6 @@
 export type { LayoutNode, LayoutGroup, LayoutPanel, WorkspaceDefinition, AppRegistry, AppRegistryEntry, PanelComponents } from './types';
-export { createDefaultLayout, splitPanel, removePanel, setApp, updateSizes, swapPanels, pruneEmptyPanels, countPanels, hasAnyApp } from './layout-utils';
+export type { DropPosition } from './layout-utils';
+export { createDefaultLayout, splitPanel, removePanel, setApp, updateSizes, swapPanels, movePanel, pruneEmptyPanels, countPanels, hasAnyApp } from './layout-utils';
 export { WorkspaceProvider, useWorkspace } from './WorkspaceContext';
 export { WorkspaceView } from './WorkspaceView';
 export { WorkspaceLayout } from './WorkspaceLayout';
diff --git a/src/workspaces/components/Workspace/layout-utils.ts b/src/workspaces/components/Workspace/layout-utils.ts
index 5c2274c5..82e8c261 100644
--- a/src/workspaces/components/Workspace/layout-utils.ts
+++ b/src/workspaces/components/Workspace/layout-utils.ts
@@ -139,6 +139,54 @@ export function pruneEmptyPanels(root: LayoutNode): LayoutNode | null {
   };
 }
 
+export type DropPosition = 'top' | 'bottom' | 'left' | 'right' | 'center';
+
+export function movePanel(root: LayoutNode, sourceId: string, targetId: string, position: DropPosition): LayoutNode {
+  if (sourceId === targetId) return root;
+  if (position === 'center') return swapPanels(root, sourceId, targetId);
+
+  const sourceApp = findPanelApp(root, sourceId);
+  if (sourceApp === undefined) return root;
+
+  let result = removePanel(root, sourceId);
+  const direction = position === 'top' || position === 'bottom' ? 'vertical' : 'horizontal';
+  const before = position === 'top' || position === 'left';
+  return insertPanel(result, targetId, direction, before, sourceApp);
+}
+
+function insertPanel(node: LayoutNode, targetId: string, direction: 'horizontal' | 'vertical', before: boolean, appType: string | null): LayoutNode {
+  if (node.type === 'panel') {
+    if (node.id !== targetId) return node;
+    const newPanel: LayoutPanel = { type: 'panel', id: uid(), appType };
+    const children = before
+      ? [{ node: newPanel, size: 50 }, { node, size: 50 }]
+      : [{ node, size: 50 }, { node: newPanel, size: 50 }];
+    return { type: 'group', id: uid(), direction, children };
+  }
+
+  const childIdx = node.children.findIndex((c) => c.node.type === 'panel' && c.node.id === targetId);
+  if (childIdx !== -1 && node.direction === direction) {
+    const newPanel: LayoutPanel = { type: 'panel', id: uid(), appType };
+    const insertIdx = before ? childIdx : childIdx + 1;
+    const newChildren = [
+      ...node.children.slice(0, insertIdx),
+      { node: newPanel, size: 0 },
+      ...node.children.slice(insertIdx),
+    ];
+    const size = 100 / newChildren.length;
+    return { ...node, children: newChildren.map((c) => ({ ...c, size })) };
+  }
+
+  const newChildren = node.children.map((child) => ({
+    ...child,
+    node: insertPanel(child.node, targetId, direction, before, appType),
+  }));
+  if (newChildren.some((c, i) => c.node !== node.children[i]!.node)) {
+    return { ...node, children: newChildren };
+  }
+  return node;
+}
+
 export function swapPanels(root: LayoutNode, idA: string, idB: string): LayoutNode {
   const appA = findPanelApp(root, idA);
   const appB = findPanelApp(root, idB);