diff --git a/crates/outline/src/outline.rs b/crates/outline/src/outline.rs
index 8c5e78d77bce76e62ef94d2501dbef588cd76f00..1f85d08cee850f18a30cca9b56061854f7cbc7b1 100644
--- a/crates/outline/src/outline.rs
+++ b/crates/outline/src/outline.rs
@@ -81,8 +81,19 @@ impl ModalView for OutlineView {
 }
 
 impl Render for OutlineView {
-    fn render(&mut self, _window: &mut Window, _cx: &mut Context<Self>) -> impl IntoElement {
-        v_flex().w(rems(34.)).child(self.picker.clone())
+    fn render(&mut self, _window: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
+        v_flex()
+            .w(rems(34.))
+            .on_action(cx.listener(
+                |_this: &mut OutlineView,
+                 _: &zed_actions::outline::ToggleOutline,
+                 _window: &mut Window,
+                 cx: &mut Context<OutlineView>| {
+                    // When outline::Toggle is triggered while the outline is open, dismiss it
+                    cx.emit(DismissEvent);
+                },
+            ))
+            .child(self.picker.clone())
     }
 }