diff --git a/packages/react/src/components/DropdownSelector/__snapshots__/index.story.storyshot b/packages/react/src/components/DropdownSelector/__snapshots__/index.story.storyshot
index 3b5149c07..7c1a7a831 100644
--- a/packages/react/src/components/DropdownSelector/__snapshots__/index.story.storyshot
+++ b/packages/react/src/components/DropdownSelector/__snapshots__/index.story.storyshot
@@ -703,6 +703,7 @@ exports[`Storybook Tests DropdownSelector InModal 1`] = `
     </button>
     <div
       className="c0"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={
         Object {
diff --git a/packages/react/src/components/Modal/__snapshots__/index.story.storyshot b/packages/react/src/components/Modal/__snapshots__/index.story.storyshot
index 9ae063db6..5aee68ba7 100644
--- a/packages/react/src/components/Modal/__snapshots__/index.story.storyshot
+++ b/packages/react/src/components/Modal/__snapshots__/index.story.storyshot
@@ -411,6 +411,7 @@ exports[`Storybook Tests Modal BottomSheet 1`] = `
     </button>
     <div
       className="c2"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={
         Object {
@@ -1200,6 +1201,7 @@ exports[`Storybook Tests Modal Default 1`] = `
     </button>
     <div
       className="c2"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={Object {}}
     >
@@ -2024,6 +2026,7 @@ exports[`Storybook Tests Modal FullBottomSheet 1`] = `
     </button>
     <div
       className="c2"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={
         Object {
@@ -2491,6 +2494,7 @@ exports[`Storybook Tests Modal InternalScroll 1`] = `
     </button>
     <div
       className="c2"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={Object {}}
     >
@@ -2870,6 +2874,7 @@ exports[`Storybook Tests Modal NotDismmissableStory 1`] = `
     </button>
     <div
       className="c2"
+      onClick={[Function]}
       onPointerDown={[Function]}
       style={Object {}}
     >
diff --git a/packages/react/src/components/Modal/index.tsx b/packages/react/src/components/Modal/index.tsx
index 55d89a766..d0d3dda6e 100644
--- a/packages/react/src/components/Modal/index.tsx
+++ b/packages/react/src/components/Modal/index.tsx
@@ -1,10 +1,6 @@
 import { useContext, forwardRef, memo } from 'react'
 import * as React from 'react'
-import {
-  AriaModalOverlayProps,
-  Overlay,
-  useModalOverlay,
-} from '@react-aria/overlays'
+import { AriaModalOverlayProps, Overlay } from '@react-aria/overlays'
 import styled, { css, useTheme } from 'styled-components'
 import { AriaDialogProps } from '@react-types/dialog'
 import { maxWidth } from '@charcoal-ui/utils'
@@ -15,6 +11,7 @@ import IconButton from '../IconButton'
 import { useObjectRef } from '@react-aria/utils'
 import { Dialog } from './Dialog'
 import { ModalBackgroundContext } from './ModalBackgroundContext'
+import { useCharcoalModalOverlay } from './useCustomModalOverlay'
 
 export type BottomSheet = boolean | 'full'
 export type Size = 'S' | 'M' | 'L'
@@ -81,27 +78,15 @@ const Modal = forwardRef<HTMLDivElement, ModalProps>(function ModalInner(
 
   const ref = useObjectRef<HTMLDivElement>(external)
 
-  const { modalProps, underlayProps } = useModalOverlay(
+  const { modalProps, underlayProps } = useCharcoalModalOverlay(
     {
       ...props,
       isKeyboardDismissDisabled:
         isDismissable === undefined || isDismissable === false,
     },
-
     {
-      close: onClose,
-      isOpen: isOpen,
-      // these props are not used actually.
-      // https://github.com/adobe/react-spectrum/blob/df14e3fb129b94b310f0397a701b83f006b51dfe/packages/%40react-aria/overlays/src/useModalOverlay.ts
-      open: () => {
-        // nope
-      },
-      setOpen: () => {
-        // nope
-      },
-      toggle: () => {
-        // nope
-      },
+      onClose,
+      isOpen,
     },
     ref
   )
@@ -136,6 +121,15 @@ const Modal = forwardRef<HTMLDivElement, ModalProps>(function ModalInner(
 
   const bgRef = React.useRef<HTMLElement>(null)
 
+  const handleClick = React.useCallback(
+    (e: MouseEvent) => {
+      if (e.currentTarget === e.target) {
+        onClose()
+      }
+    },
+    [onClose]
+  )
+
   return transition(
     ({ backgroundColor, overflow, transform }, item) =>
       item && (
@@ -146,6 +140,7 @@ const Modal = forwardRef<HTMLDivElement, ModalProps>(function ModalInner(
             {...underlayProps}
             style={transitionEnabled ? { backgroundColor, overflow } : {}}
             $bottomSheet={bottomSheet}
+            onClick={handleClick}
           >
             <ModalBackgroundContext.Provider value={bgRef.current}>
               <Dialog
diff --git a/packages/react/src/components/Modal/useCustomModalOverlay.tsx b/packages/react/src/components/Modal/useCustomModalOverlay.tsx
new file mode 100644
index 000000000..e41bbb74c
--- /dev/null
+++ b/packages/react/src/components/Modal/useCustomModalOverlay.tsx
@@ -0,0 +1,42 @@
+import * as React from 'react'
+import {
+  AriaModalOverlayProps,
+  ModalOverlayAria,
+  ariaHideOutside,
+  useOverlay,
+  useOverlayFocusContain,
+} from '@react-aria/overlays'
+
+/**
+ * We want to enable scrolling on the modal background,
+ * but `useModalOverlay` (specifically, `useOverlay` within it) detects pointer events on the scrollbar.
+ * Therefore, to prevent this issue, we need to override `shouldCloseOnInteractOutside` in `useModalOverlay`.
+ */
+export function useCharcoalModalOverlay(
+  props: AriaModalOverlayProps,
+  state: { isOpen: boolean; onClose: () => void },
+  ref: React.RefObject<HTMLElement>
+): ModalOverlayAria {
+  const { overlayProps, underlayProps } = useOverlay(
+    {
+      ...props,
+      isOpen: state.isOpen,
+      onClose: state.onClose,
+      shouldCloseOnInteractOutside: () => false,
+    },
+    ref
+  )
+
+  useOverlayFocusContain()
+
+  React.useEffect(() => {
+    if (state.isOpen && ref.current) {
+      return ariaHideOutside([ref.current])
+    }
+  }, [state.isOpen, ref])
+
+  return {
+    modalProps: overlayProps,
+    underlayProps,
+  }
+}