diff --git a/services/inputflinger/dispatcher/Android.bp b/services/inputflinger/dispatcher/Android.bp
index 393f649..9750ef9 100644
--- a/services/inputflinger/dispatcher/Android.bp
+++ b/services/inputflinger/dispatcher/Android.bp
@@ -42,6 +42,7 @@
         "InputTarget.cpp",
         "Monitor.cpp",
         "TouchState.cpp",
+        "DragState.cpp",
     ],
 }
 
diff --git a/services/inputflinger/dispatcher/DragState.cpp b/services/inputflinger/dispatcher/DragState.cpp
new file mode 100644
index 0000000..2e2df43
--- /dev/null
+++ b/services/inputflinger/dispatcher/DragState.cpp
@@ -0,0 +1,38 @@
+/*
+ * Copyright (C) 2021 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+#include "DragState.h"
+#include <android-base/stringprintf.h>
+#include <input/InputWindow.h>
+
+using android::InputWindowHandle;
+using android::base::StringPrintf;
+
+namespace android::inputdispatcher {
+
+void DragState::dump(std::string& dump, const char* prefix) {
+    dump += prefix + StringPrintf("Drag Window: %s\n", dragWindow->getName().c_str());
+    if (dragHoverWindowHandle) {
+        dump += prefix +
+                StringPrintf("Drag Hover Window: %s\n", dragHoverWindowHandle->getName().c_str());
+    }
+    dump += prefix + StringPrintf("isStartDrag: %s\n", isStartDrag ? "true" : "false");
+    dump += prefix +
+            StringPrintf("isStylusButtonDownAtStart: %s\n",
+                         isStylusButtonDownAtStart ? "true" : "false");
+}
+
+} // namespace android::inputdispatcher
\ No newline at end of file
diff --git a/services/inputflinger/dispatcher/DragState.h b/services/inputflinger/dispatcher/DragState.h
new file mode 100644
index 0000000..06453d8
--- /dev/null
+++ b/services/inputflinger/dispatcher/DragState.h
@@ -0,0 +1,45 @@
+/*
+ * Copyright (C) 2021 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+#ifndef _UI_INPUT_INPUTDISPATCHER_DRAGSTATE_H
+#define _UI_INPUT_INPUTDISPATCHER_DRAGSTATE_H
+
+#include <utils/RefBase.h>
+#include <string>
+
+namespace android {
+
+class InputWindowHandle;
+
+namespace inputdispatcher {
+struct DragState {
+    DragState(const sp<android::InputWindowHandle>& windowHandle) : dragWindow(windowHandle) {}
+    void dump(std::string& dump, const char* prefix = "");
+
+    // The window being dragged.
+    const sp<InputWindowHandle> dragWindow;
+    // The last drag hover window which could receive the drag event.
+    sp<InputWindowHandle> dragHoverWindowHandle;
+    // Indicates the if received first event to check for button state.
+    bool isStartDrag = false;
+    // Indicate if the stylus button is down at the start of the drag.
+    bool isStylusButtonDownAtStart = false;
+};
+
+} // namespace inputdispatcher
+} // namespace android
+
+#endif // _UI_INPUT_INPUTDISPATCHER_DRAGSTATE_H
\ No newline at end of file
diff --git a/services/inputflinger/dispatcher/InputDispatcher.cpp b/services/inputflinger/dispatcher/InputDispatcher.cpp
index 397a9d7..6977396 100644
--- a/services/inputflinger/dispatcher/InputDispatcher.cpp
+++ b/services/inputflinger/dispatcher/InputDispatcher.cpp
@@ -961,7 +961,7 @@
     // Traverse windows from front to back to find touched window.
     const std::vector<sp<InputWindowHandle>>& windowHandles = getWindowHandlesLocked(displayId);
     for (const sp<InputWindowHandle>& windowHandle : windowHandles) {
-        if (ignoreDragWindow && haveSameToken(windowHandle, touchState->dragWindow)) {
+        if (ignoreDragWindow && haveSameToken(windowHandle, mDragState->dragWindow)) {
             continue;
         }
         const InputWindowInfo* windowInfo = windowHandle->getInfo();
@@ -2061,7 +2061,7 @@
             goto Failed;
         }
 
-        addDragEventLocked(entry, tempTouchState);
+        addDragEventLocked(entry);
 
         // Check whether touches should slip outside of the current foreground window.
         if (maskedAction == AMOTION_EVENT_ACTION_MOVE && entry.pointerCount == 1 &&
@@ -2318,39 +2318,61 @@
     return injectionResult;
 }
 
-void InputDispatcher::addDragEventLocked(const MotionEntry& entry, TouchState& state) {
-    if (entry.pointerCount != 1 || !state.dragWindow) {
+void InputDispatcher::finishDragAndDrop(int32_t displayId, float x, float y) {
+    const sp<InputWindowHandle> dropWindow =
+            findTouchedWindowAtLocked(displayId, x, y, nullptr /*touchState*/,
+                                      false /*addOutsideTargets*/, false /*addPortalWindows*/,
+                                      true /*ignoreDragWindow*/);
+    if (dropWindow) {
+        vec2 local = dropWindow->getInfo()->transform.transform(x, y);
+        notifyDropWindowLocked(dropWindow->getToken(), local.x, local.y);
+    }
+    mDragState.reset();
+}
+
+void InputDispatcher::addDragEventLocked(const MotionEntry& entry) {
+    if (entry.pointerCount != 1 || !mDragState) {
         return;
     }
 
+    if (!mDragState->isStartDrag) {
+        mDragState->isStartDrag = true;
+        mDragState->isStylusButtonDownAtStart =
+                (entry.buttonState & AMOTION_EVENT_BUTTON_STYLUS_PRIMARY) != 0;
+    }
+
     int32_t maskedAction = entry.action & AMOTION_EVENT_ACTION_MASK;
     int32_t x = static_cast<int32_t>(entry.pointerCoords[0].getAxisValue(AMOTION_EVENT_AXIS_X));
     int32_t y = static_cast<int32_t>(entry.pointerCoords[0].getAxisValue(AMOTION_EVENT_AXIS_Y));
     if (maskedAction == AMOTION_EVENT_ACTION_MOVE) {
+        // Handle the special case : stylus button no longer pressed.
+        bool isStylusButtonDown = (entry.buttonState & AMOTION_EVENT_BUTTON_STYLUS_PRIMARY) != 0;
+        if (mDragState->isStylusButtonDownAtStart && !isStylusButtonDown) {
+            finishDragAndDrop(entry.displayId, x, y);
+            return;
+        }
+
         const sp<InputWindowHandle> hoverWindowHandle =
-                findTouchedWindowAtLocked(entry.displayId, x, y, &state,
+                findTouchedWindowAtLocked(entry.displayId, x, y, nullptr /*touchState*/,
                                           false /*addOutsideTargets*/, false /*addPortalWindows*/,
                                           true /*ignoreDragWindow*/);
         // enqueue drag exit if needed.
-        if (hoverWindowHandle != state.dragHoverWindowHandle &&
-            !haveSameToken(hoverWindowHandle, state.dragHoverWindowHandle)) {
-            if (state.dragHoverWindowHandle != nullptr) {
-                enqueueDragEventLocked(state.dragHoverWindowHandle, true /*isExiting*/, entry);
+        if (hoverWindowHandle != mDragState->dragHoverWindowHandle &&
+            !haveSameToken(hoverWindowHandle, mDragState->dragHoverWindowHandle)) {
+            if (mDragState->dragHoverWindowHandle != nullptr) {
+                enqueueDragEventLocked(mDragState->dragHoverWindowHandle, true /*isExiting*/,
+                                       entry);
             }
-            state.dragHoverWindowHandle = hoverWindowHandle;
+            mDragState->dragHoverWindowHandle = hoverWindowHandle;
         }
         // enqueue drag location if needed.
         if (hoverWindowHandle != nullptr) {
             enqueueDragEventLocked(hoverWindowHandle, false /*isExiting*/, entry);
         }
-    } else if (maskedAction == AMOTION_EVENT_ACTION_UP ||
-               maskedAction == AMOTION_EVENT_ACTION_CANCEL) {
-        if (state.dragHoverWindowHandle && maskedAction == AMOTION_EVENT_ACTION_UP) {
-            vec2 local = state.dragHoverWindowHandle->getInfo()->transform.transform(x, y);
-            notifyDropWindowLocked(state.dragHoverWindowHandle->getToken(), local.x, local.y);
-        }
-        state.dragWindow = nullptr;
-        state.dragHoverWindowHandle = nullptr;
+    } else if (maskedAction == AMOTION_EVENT_ACTION_UP) {
+        finishDragAndDrop(entry.displayId, x, y);
+    } else if (maskedAction == AMOTION_EVENT_ACTION_CANCEL) {
+        mDragState.reset();
     }
 }
 
@@ -4445,13 +4467,12 @@
             }
         }
 
-        // If drag window is gone, it would receive a cancel event and broadcast the DRAG_END. we
+        // If drag window is gone, it would receive a cancel event and broadcast the DRAG_END. We
         // could just clear the state here.
-        if (state.dragWindow &&
-            std::find(windowHandles.begin(), windowHandles.end(), state.dragWindow) ==
+        if (mDragState &&
+            std::find(windowHandles.begin(), windowHandles.end(), mDragState->dragWindow) ==
                     windowHandles.end()) {
-            state.dragWindow = nullptr;
-            state.dragHoverWindowHandle = nullptr;
+            mDragState.reset();
         }
     }
 
@@ -4690,7 +4711,7 @@
 
                     // Store the dragging window.
                     if (isDragDrop) {
-                        state.dragWindow = toWindowHandle;
+                        mDragState = std::make_unique<DragState>(toWindowHandle);
                     }
 
                     found = true;
@@ -4833,6 +4854,11 @@
         dump += INDENT "TouchStates: <no displays touched>\n";
     }
 
+    if (mDragState) {
+        dump += StringPrintf(INDENT "DragState:\n");
+        mDragState->dump(dump, INDENT2);
+    }
+
     if (!mWindowHandlesByDisplay.empty()) {
         for (auto& it : mWindowHandlesByDisplay) {
             const std::vector<sp<InputWindowHandle>> windowHandles = it.second;
diff --git a/services/inputflinger/dispatcher/InputDispatcher.h b/services/inputflinger/dispatcher/InputDispatcher.h
index 593ec23..5708fac 100644
--- a/services/inputflinger/dispatcher/InputDispatcher.h
+++ b/services/inputflinger/dispatcher/InputDispatcher.h
@@ -19,6 +19,7 @@
 
 #include "AnrTracker.h"
 #include "CancelationOptions.h"
+#include "DragState.h"
 #include "Entry.h"
 #include "FocusResolver.h"
 #include "InjectionState.h"
@@ -340,6 +341,7 @@
             REQUIRES(mLock);
 
     std::unordered_map<int32_t, TouchState> mTouchStatesByDisplay GUARDED_BY(mLock);
+    std::unique_ptr<DragState> mDragState GUARDED_BY(mLock);
 
     // Focused applications.
     std::unordered_map<int32_t, std::shared_ptr<InputApplicationHandle>>
@@ -499,7 +501,8 @@
                                   const InjectionState* injectionState);
     // Enqueue a drag event if needed, and update the touch state.
     // Uses findTouchedWindowTargetsLocked to make the decision
-    void addDragEventLocked(const MotionEntry& entry, TouchState& state) REQUIRES(mLock);
+    void addDragEventLocked(const MotionEntry& entry) REQUIRES(mLock);
+    void finishDragAndDrop(int32_t displayId, float x, float y) REQUIRES(mLock);
 
     struct TouchOcclusionInfo {
         bool hasBlockingOcclusion;
diff --git a/services/inputflinger/dispatcher/TouchState.cpp b/services/inputflinger/dispatcher/TouchState.cpp
index 4165f49..81b3cf0 100644
--- a/services/inputflinger/dispatcher/TouchState.cpp
+++ b/services/inputflinger/dispatcher/TouchState.cpp
@@ -49,8 +49,6 @@
     windows = other.windows;
     portalWindows = other.portalWindows;
     gestureMonitors = other.gestureMonitors;
-    dragHoverWindowHandle = other.dragHoverWindowHandle;
-    dragWindow = other.dragWindow;
 }
 
 void TouchState::addOrUpdateWindow(const sp<InputWindowHandle>& windowHandle, int32_t targetFlags,
diff --git a/services/inputflinger/dispatcher/TouchState.h b/services/inputflinger/dispatcher/TouchState.h
index d7a561c..623c6a8 100644
--- a/services/inputflinger/dispatcher/TouchState.h
+++ b/services/inputflinger/dispatcher/TouchState.h
@@ -41,11 +41,6 @@
 
     std::vector<TouchedMonitor> gestureMonitors;
 
-    // The last drag hover window which could receive the drag event.
-    sp<InputWindowHandle> dragHoverWindowHandle;
-    // The window being dragged.
-    sp<InputWindowHandle> dragWindow;
-
     TouchState();
     ~TouchState();
     void reset();
diff --git a/services/inputflinger/tests/InputDispatcher_test.cpp b/services/inputflinger/tests/InputDispatcher_test.cpp
index cedda6e..485fc99 100644
--- a/services/inputflinger/tests/InputDispatcher_test.cpp
+++ b/services/inputflinger/tests/InputDispatcher_test.cpp
@@ -1165,8 +1165,8 @@
         return *this;
     }
 
-    MotionEventBuilder& buttonState(int32_t actionButton) {
-        mActionButton = actionButton;
+    MotionEventBuilder& buttonState(int32_t buttonState) {
+        mButtonState = buttonState;
         return *this;
     }
 
@@ -4761,6 +4761,32 @@
         mWindow->consumeMotionCancel();
         mDragWindow->consumeMotionDown();
     }
+
+    // Start performing drag, we will create a drag window and transfer touch to it.
+    void performStylusDrag() {
+        ASSERT_EQ(InputEventInjectionResult::SUCCEEDED,
+                  injectMotionEvent(mDispatcher,
+                                    MotionEventBuilder(AMOTION_EVENT_ACTION_DOWN,
+                                                       AINPUT_SOURCE_STYLUS)
+                                            .buttonState(AMOTION_EVENT_BUTTON_STYLUS_PRIMARY)
+                                            .pointer(PointerBuilder(0,
+                                                                    AMOTION_EVENT_TOOL_TYPE_STYLUS)
+                                                             .x(50)
+                                                             .y(50))
+                                            .build()));
+        mWindow->consumeMotionDown(ADISPLAY_ID_DEFAULT);
+
+        // The drag window covers the entire display
+        mDragWindow = new FakeWindowHandle(mApp, mDispatcher, "DragWindow", ADISPLAY_ID_DEFAULT);
+        mDispatcher->setInputWindows(
+                {{ADISPLAY_ID_DEFAULT, {mDragWindow, mWindow, mSecondWindow}}});
+
+        // Transfer touch focus to the drag window
+        mDispatcher->transferTouchFocus(mWindow->getToken(), mDragWindow->getToken(),
+                                        true /* isDragDrop */);
+        mWindow->consumeMotionCancel();
+        mDragWindow->consumeMotionDown();
+    }
 };
 
 TEST_F(InputDispatcherDragTests, DragEnterAndDragExit) {
@@ -4833,4 +4859,51 @@
     mSecondWindow->assertNoEvents();
 }
 
+TEST_F(InputDispatcherDragTests, StylusDragAndDrop) {
+    performStylusDrag();
+
+    // Move on window and keep button pressed.
+    ASSERT_EQ(InputEventInjectionResult::SUCCEEDED,
+              injectMotionEvent(mDispatcher,
+                                MotionEventBuilder(AMOTION_EVENT_ACTION_MOVE, AINPUT_SOURCE_STYLUS)
+                                        .buttonState(AMOTION_EVENT_BUTTON_STYLUS_PRIMARY)
+                                        .pointer(PointerBuilder(0, AMOTION_EVENT_TOOL_TYPE_STYLUS)
+                                                         .x(50)
+                                                         .y(50))
+                                        .build()))
+            << "Inject motion event should return InputEventInjectionResult::SUCCEEDED";
+    mDragWindow->consumeMotionMove(ADISPLAY_ID_DEFAULT);
+    mWindow->consumeDragEvent(false, 50, 50);
+    mSecondWindow->assertNoEvents();
+
+    // Move to another window and release button, expect to drop item.
+    ASSERT_EQ(InputEventInjectionResult::SUCCEEDED,
+              injectMotionEvent(mDispatcher,
+                                MotionEventBuilder(AMOTION_EVENT_ACTION_MOVE, AINPUT_SOURCE_STYLUS)
+                                        .buttonState(0)
+                                        .pointer(PointerBuilder(0, AMOTION_EVENT_TOOL_TYPE_STYLUS)
+                                                         .x(150)
+                                                         .y(50))
+                                        .build()))
+            << "Inject motion event should return InputEventInjectionResult::SUCCEEDED";
+    mDragWindow->consumeMotionMove(ADISPLAY_ID_DEFAULT);
+    mWindow->assertNoEvents();
+    mSecondWindow->assertNoEvents();
+    mFakePolicy->assertDropTargetEquals(mSecondWindow->getToken());
+
+    // nothing to the window.
+    ASSERT_EQ(InputEventInjectionResult::SUCCEEDED,
+              injectMotionEvent(mDispatcher,
+                                MotionEventBuilder(AMOTION_EVENT_ACTION_UP, AINPUT_SOURCE_STYLUS)
+                                        .buttonState(0)
+                                        .pointer(PointerBuilder(0, AMOTION_EVENT_TOOL_TYPE_STYLUS)
+                                                         .x(150)
+                                                         .y(50))
+                                        .build()))
+            << "Inject motion event should return InputEventInjectionResult::SUCCEEDED";
+    mDragWindow->consumeMotionUp(ADISPLAY_ID_DEFAULT);
+    mWindow->assertNoEvents();
+    mSecondWindow->assertNoEvents();
+}
+
 } // namespace android::inputdispatcher