diff --git a/packages/builder/src/components/design/AppPreview/CurrentItemPreview.svelte b/packages/builder/src/components/design/AppPreview/CurrentItemPreview.svelte
index 6bbf90e936..4929cf5db2 100644
--- a/packages/builder/src/components/design/AppPreview/CurrentItemPreview.svelte
+++ b/packages/builder/src/components/design/AppPreview/CurrentItemPreview.svelte
@@ -101,12 +101,12 @@
     overflow: hidden;
     margin: auto;
     height: 100%;
-    background-color: white;
   }
   .component-container iframe {
     border: 0;
     left: 0;
     top: 0;
     width: 100%;
+    background-color: transparent;
   }
 </style>
diff --git a/packages/builder/src/components/design/AppPreview/iframeTemplate.js b/packages/builder/src/components/design/AppPreview/iframeTemplate.js
index da39a6477b..f333359a26 100644
--- a/packages/builder/src/components/design/AppPreview/iframeTemplate.js
+++ b/packages/builder/src/components/design/AppPreview/iframeTemplate.js
@@ -14,10 +14,13 @@ export default `
     <style>
       html,
       body {
-        height: 100%;
-        width: 100%;
         margin: 0;
         padding: 0;
+        height: 100%;
+        width: 100%;
+      }
+      body {
+        padding: 2px;
       }
   
       *,
diff --git a/packages/client/src/components/ClientApp.svelte b/packages/client/src/components/ClientApp.svelte
index ea5c4cbea8..c1773facef 100644
--- a/packages/client/src/components/ClientApp.svelte
+++ b/packages/client/src/components/ClientApp.svelte
@@ -15,6 +15,8 @@
   } from "../store"
   import { TableNames, ActionTypes } from "../constants"
   import SettingsBar from "./SettingsBar.svelte"
+  import SelectionIndicator from "./SelectionIndicator.svelte"
+  import HoverIndicator from "./HoverIndicator.svelte"
 
   // Provide contexts
   setContext("sdk", SDK)
@@ -64,11 +66,13 @@
     <Provider key="user" data={$authStore} {actions}>
       <Component definition={$screenStore.activeLayout.props} />
       <NotificationDisplay />
-      {#if $builderStore.inBuilder && $builderStore.selectedComponent}
-        {#key $builderStore.selectedComponentId}
+      {#key $builderStore.selectedComponentId}
+        {#if $builderStore.inBuilder && $builderStore.selectedComponent}
           <SettingsBar />
-        {/key}
-      {/if}
+          <SelectionIndicator />
+          <HoverIndicator />
+        {/if}
+      {/key}
     </Provider>
   </div>
 {/if}
diff --git a/packages/client/src/components/Component.svelte b/packages/client/src/components/Component.svelte
index 61c4ea99f5..061b954342 100644
--- a/packages/client/src/components/Component.svelte
+++ b/packages/client/src/components/Component.svelte
@@ -32,6 +32,7 @@
   $: constructor = getComponentConstructor(definition._component)
   $: children = definition._children || []
   $: id = definition._id
+  $: name = definition._instanceName
   $: updateComponentProps(definition, $context)
   $: styles = definition._styles
   $: transition = definition._transition
@@ -99,9 +100,9 @@
   }
 </script>
 
-{#if constructor && componentProps}
+<div class={id} data-type="component" data-id={id} data-name={name}>
   {#key propsHash}
-    <div class={id}>
+    {#if constructor && componentProps}
       <svelte:component this={constructor} {...componentProps}>
         {#if children.length}
           {#each children as child (child._id)}
@@ -109,9 +110,9 @@
           {/each}
         {/if}
       </svelte:component>
-    </div>
+    {/if}
   {/key}
-{/if}
+</div>
 
 <style>
   div {
diff --git a/packages/client/src/components/HoverIndicator.svelte b/packages/client/src/components/HoverIndicator.svelte
new file mode 100644
index 0000000000..d9808f7d96
--- /dev/null
+++ b/packages/client/src/components/HoverIndicator.svelte
@@ -0,0 +1,74 @@
+<script>
+  import { onMount, onDestroy } from "svelte"
+  import { builderStore } from "../store"
+  import Indicator from "./Indicator.svelte"
+
+  const offset = 2
+  let indicators = []
+  let interval
+  let componentId
+  let componentName
+
+  const updatePosition = () => {
+    let newIndicators = []
+
+    if (componentId) {
+      const parents = document.getElementsByClassName(componentId)
+
+      // Batch reads to minimize reflow
+      const scrollX = window.scrollX
+      const scrollY = window.scrollY
+
+      for (let i = 0; i < parents.length; i++) {
+        const child = parents[i]?.childNodes?.[0]
+        if (child) {
+          const elBounds = child.getBoundingClientRect()
+          newIndicators.push({
+            top: elBounds.top + scrollY - offset * 2,
+            left: elBounds.left + scrollX - offset * 2,
+            width: elBounds.width + offset * 2,
+            height: elBounds.height + offset * 2,
+          })
+        }
+      }
+    }
+
+    indicators = newIndicators
+  }
+
+  const onMouseOver = e => {
+    const element = e.target.closest("[data-type='component']")
+    componentId = element?.dataset?.id
+    componentName = element?.dataset?.name
+  }
+
+  const onMouseLeave = () => {
+    componentId = null
+    componentName = null
+  }
+
+  onMount(() => {
+    interval = setInterval(updatePosition, 100)
+    window.addEventListener("mouseover", onMouseOver)
+    document.documentElement.addEventListener("mouseleave", onMouseLeave)
+  })
+
+  onDestroy(() => {
+    clearInterval(interval)
+    window.removeEventListener("mouseover", onMouseOver)
+    document.documentElement.removeEventListener("mouseleave", onMouseLeave)
+  })
+</script>
+
+{#if componentId !== $builderStore.selectedComponentId}
+  {#each indicators as indicator, idx}
+    <Indicator
+      top={indicator.top}
+      left={indicator.left}
+      width={indicator.width}
+      height={indicator.height}
+      text={idx === 0 ? componentName : null}
+      color="rgb(120, 170, 244)"
+    />
+  {/each}
+{/if}
diff --git a/packages/client/src/components/Indicator.svelte b/packages/client/src/components/Indicator.svelte
new file mode 100644
index 0000000000..5eb626bf9f
--- /dev/null
+++ b/packages/client/src/components/Indicator.svelte
@@ -0,0 +1,53 @@
+<script>
+  export let top
+  export let left
+  export let width
+  export let height
+  export let text
+  export let color
+</script>
+
+<div
+  class="indicator"
+  style="top: {top}px; left: {left}px; width: {width}px; height: {height}px; --color: {color};"
+>
+  {#if text}
+    <div class="text" class:flipped={top < 22}>
+      {text}
+    </div>
+  {/if}
+</div>
+
+<style>
+  .indicator {
+    position: absolute;
+    z-index: 910;
+    border: 2px solid var(--color);
+    pointer-events: none;
+    border-radius: 4px;
+  }
+  .text {
+    background-color: var(--color);
+    color: white;
+    position: absolute;
+    top: 0;
+    left: -2px;
+    height: 20px;
+    padding: 0 8px 2px 8px;
+    transform: translateY(-100%);
+    font-size: 11px;
+    border-top-left-radius: 2px;
+    border-top-right-radius: 2px;
+    border-bottom-right-radius: 2px;
+    white-space: nowrap;
+    display: flex;
+    flex-direction: row;
+    justify-content: flex-start;
+    align-items: center;
+  }
+  .flipped {
+    border-top-left-radius: 0;
+    transform: translateY(0%);
+    top: -2px;
+  }
+</style>
diff --git a/packages/client/src/components/SelectionIndicator.svelte b/packages/client/src/components/SelectionIndicator.svelte
new file mode 100644
index 0000000000..b34e6cab0d
--- /dev/null
+++ b/packages/client/src/components/SelectionIndicator.svelte
@@ -0,0 +1,52 @@
+<script>
+  import { onMount, onDestroy } from "svelte"
+  import { builderStore } from "../store"
+  import Indicator from "./Indicator.svelte"
+
+  const offset = 2
+  let indicators = []
+  let interval
+
+  const updatePosition = () => {
+    const id = $builderStore.selectedComponentId
+    const parents = document.getElementsByClassName(id)
+
+    // Batch reads to minimize reflow
+    const scrollX = window.scrollX
+    const scrollY = window.scrollY
+
+    let newIndicators = []
+    for (let i = 0; i < parents.length; i++) {
+      const child = parents[i]?.childNodes?.[0]
+      if (child) {
+        const elBounds = child.getBoundingClientRect()
+        newIndicators.push({
+          top: elBounds.top + scrollY - offset * 2,
+          left: elBounds.left + scrollX - offset * 2,
+          width: elBounds.width + offset * 2,
+          height: elBounds.height + offset * 2,
+        })
+      }
+    }
+    indicators = newIndicators
+  }
+
+  onMount(() => {
+    interval = setInterval(updatePosition, 100)
+  })
+
+  onDestroy(() => {
+    clearInterval(interval)
+  })
+</script>
+
+{#each indicators as indicator, idx}
+  <Indicator
+    top={indicator.top}
+    left={indicator.left}
+    width={indicator.width}
+    height={indicator.height}
+    text={idx === 0 ? $builderStore.selectedComponent._instanceName : null}
+    color="rgb(66, 133, 244)"
+  />
+{/each}
diff --git a/packages/client/src/components/SettingsBar.svelte b/packages/client/src/components/SettingsBar.svelte
index 41b546eff6..42d46bcbb2 100644
--- a/packages/client/src/components/SettingsBar.svelte
+++ b/packages/client/src/components/SettingsBar.svelte
@@ -3,11 +3,15 @@
   import SettingsButton from "./SettingsButton.svelte"
   import { builderStore } from "../store"
 
+  const verticalOffset = 28
+  const horizontalOffset = 2
+
   let top = 0
   let left = 0
   let interval
   let self
   let measured = false
+
   $: definition = $builderStore.selectedComponentDefinition
   $: showBar = definition?.showSettingsBar
   $: settings = definition?.settings?.filter(setting => setting.showInBar) ?? []
@@ -20,32 +24,35 @@
     const parent = document.getElementsByClassName(id)?.[0]
     const element = parent?.childNodes?.[0]
     if (element && self) {
+      // Batch reads to minimize reflow
       const elBounds = element.getBoundingClientRect()
       const width = self.offsetWidth
       const height = self.offsetHeight
+      const { scrollX, scrollY, innerWidth } = window
 
       // Vertically, always render above unless no room, then render inside
-      let newTop = elBounds.top + window.scrollY - 10 - height
+      let newTop = elBounds.top + scrollY - verticalOffset - height
       if (newTop < 0) {
-        newTop = elBounds.top + window.scrollY + 10
+        newTop = elBounds.top + scrollY + verticalOffset
       }
 
       // Horizontally, try to center first.
       // Failing that, render to left edge of component.
       // Failing that, render to right edge of component,
       // Failing that, render to window left edge and accept defeat.
-      let elCenter = elBounds.left + window.scrollX + elBounds.width / 2
+      let elCenter = elBounds.left + scrollX + elBounds.width / 2
       let newLeft = elCenter - width / 2
-      if (newLeft < 0 || newLeft + width > window.innerWidth) {
-        newLeft = elBounds.left + window.scrollX
-        if (newLeft < 0 || newLeft + width > window.innerWidth) {
-          newLeft = elBounds.left + window.scrollX + elBounds.width - width
-          if (newLeft < 0 || newLeft + width > window.innerWidth) {
+      if (newLeft < 0 || newLeft + width > innerWidth) {
+        newLeft = elBounds.left + scrollX - horizontalOffset
+        if (newLeft < 0 || newLeft + width > innerWidth) {
+          newLeft = innerWidth - width - 20
+          if (newLeft < 0 || newLeft + width > innerWidth) {
             newLeft = 0
           }
         }
       }
 
+      // Only update state when things changes to minimize renders
       if (Math.round(newTop) !== Math.round(top)) {
         top = newTop
       }
@@ -62,9 +69,7 @@
   })
 
   onDestroy(() => {
-    if (interval) {
-      clearInterval(interval)
-    }
+    clearInterval(interval)
   })
 </script>
 
@@ -97,8 +102,8 @@
   .bar {
     display: flex;
     position: absolute;
-    z-index: 999;
-    padding: 6px 10px;
+    z-index: 920;
+    padding: 6px 8px;
     opacity: 0;
     flex-direction: row;
     background: var(--background);
diff --git a/packages/client/src/utils/styleable.js b/packages/client/src/utils/styleable.js
index 9a89f1d273..4ea92a3acd 100644
--- a/packages/client/src/utils/styleable.js
+++ b/packages/client/src/utils/styleable.js
@@ -14,25 +14,6 @@ const buildStyleString = (styleObject, customStyles) => {
   return str + (customStyles || "")
 }
 
-/**
- * Applies styles to enrich the builder preview.
- * Applies styles to highlight the selected component, and allows pointer
- * events for any selectable components (overriding the blanket ban on pointer
- * events in the iframe HTML).
- */
-const addBuilderPreviewStyles = (node, styleString, componentId) => {
-  if (componentId === get(builderStore).selectedComponentId) {
-    const style = window.getComputedStyle(node)
-    const property = style?.display === "table-row" ? "outline" : "border"
-    return (
-      styleString +
-      `;${property}: 2px solid #4285f4 !important; border-radius: 4px !important;`
-    )
-  } else {
-    return styleString
-  }
-}
-
 /**
  * Svelte action to apply correct component styles.
  * This also applies handlers for selecting components from the builder preview.
@@ -54,7 +35,7 @@ export const styleable = (node, styles = {}) => {
 
     // Applies a style string to a DOM node
     const applyStyles = styleString => {
-      node.style = addBuilderPreviewStyles(node, styleString, componentId)
+      node.style = styleString
       node.dataset.componentId = componentId
     }