diff --git a/src/evdev-mt-touchpad.c b/src/evdev-mt-touchpad.c
index 1325355c..830e9fee 100644
--- a/src/evdev-mt-touchpad.c
+++ b/src/evdev-mt-touchpad.c
@@ -148,7 +148,7 @@ tp_end_touch(struct tp_dispatch *tp, struct tp_touch *t)
 
 	t->dirty = true;
 	t->is_pointer = false;
-	t->is_palm = false;
+	t->palm.is_palm = false;
 	t->state = TOUCH_END;
 	t->pinned.is_pinned = false;
 	assert(tp->nfingers_down >= 1);
@@ -340,7 +340,7 @@ static int
 tp_touch_active(struct tp_dispatch *tp, struct tp_touch *t)
 {
 	return (t->state == TOUCH_BEGIN || t->state == TOUCH_UPDATE) &&
-		!t->is_palm &&
+		!t->palm.is_palm &&
 		!t->pinned.is_pinned && tp_button_touch_active(tp, t);
 }
 
@@ -360,11 +360,21 @@ tp_set_pointer(struct tp_dispatch *tp, struct tp_touch *t)
 }
 
 static void
-tp_palm_detect(struct tp_dispatch *tp, struct tp_touch *t)
+tp_palm_detect(struct tp_dispatch *tp, struct tp_touch *t, uint64_t time)
 {
-	/* once a palm, always a palm */
-	if (t->is_palm)
+	const int PALM_TIMEOUT = 200; /* ms */
+
+	/* If labelled a touch as palm, we unlabel as palm when
+	   we move out of the palm edge zone within the timeout.
+	 */
+	if (t->palm.is_palm) {
+		if (time < t->palm.time + PALM_TIMEOUT &&
+		    (t->x > tp->palm.left_edge && t->x < tp->palm.right_edge)) {
+			t->palm.is_palm = false;
+			tp_set_pointer(tp, t);
+		}
 		return;
+	}
 
 	/* palm must start in exclusion zone, it's ok to move into
 	   the zone without being a palm */
@@ -379,7 +389,8 @@ tp_palm_detect(struct tp_dispatch *tp, struct tp_touch *t)
 	    tp_button_is_inside_softbutton_area(tp, t))
 		return;
 
-	t->is_palm = true;
+	t->palm.is_palm = true;
+	t->palm.time = time;
 }
 
 static void
@@ -398,7 +409,7 @@ tp_process_state(struct tp_dispatch *tp, uint64_t time)
 			continue;
 		}
 
-		tp_palm_detect(tp, t);
+		tp_palm_detect(tp, t, time);
 
 		tp_motion_hysteresis(tp, t);
 		tp_motion_history_push(t);
diff --git a/src/evdev-mt-touchpad.h b/src/evdev-mt-touchpad.h
index 689687ee..8255a1cd 100644
--- a/src/evdev-mt-touchpad.h
+++ b/src/evdev-mt-touchpad.h
@@ -103,7 +103,6 @@ struct tp_touch {
 	bool dirty;
 	bool fake;				/* a fake touch */
 	bool is_pointer;			/* the pointer-controlling touch */
-	bool is_palm;
 	int32_t x;
 	int32_t y;
 	uint64_t millis;
@@ -140,6 +139,11 @@ struct tp_touch {
 	struct {
 		enum tp_tap_touch_state state;
 	} tap;
+
+	struct {
+		bool is_palm;
+		uint32_t time; /* first timestamp if is_palm == true */
+	} palm;
 };
 
 struct tp_dispatch {
diff --git a/test/touchpad.c b/test/touchpad.c
index 672cbf9b..18427c1a 100644
--- a/test/touchpad.c
+++ b/test/touchpad.c
@@ -1302,17 +1302,31 @@ START_TEST(touchpad_palm_detect_at_top_corners)
 }
 END_TEST
 
-START_TEST(touchpad_palm_detect_palm_stays_palm)
+START_TEST(touchpad_palm_detect_palm_becomes_pointer)
 {
 	struct litest_device *dev = litest_current_device();
 	struct libinput *li = dev->libinput;
+	struct libinput_event *ev;
+	enum libinput_event_type type;
 
 	litest_drain_events(li);
 
 	litest_touch_down(dev, 0, 99, 50);
-	litest_touch_move_to(dev, 0, 99, 50, 0, 70, 5);
+	litest_touch_move_to(dev, 0, 99, 70, 0, 70, 5);
 	litest_touch_up(dev, 0);
 
+	libinput_dispatch(li);
+
+	ev = libinput_get_event(li);
+	ck_assert_notnull(ev);
+	do {
+		type = libinput_event_get_type(ev);
+		ck_assert_int_eq(type, LIBINPUT_EVENT_POINTER_MOTION);
+
+		libinput_event_destroy(ev);
+		ev = libinput_get_event(li);
+	} while (ev);
+
 	litest_assert_empty_queue(li);
 }
 END_TEST
@@ -1404,7 +1418,7 @@ int main(int argc, char **argv) {
 	litest_add("touchpad:palm", touchpad_palm_detect_at_edge, LITEST_TOUCHPAD, LITEST_ANY);
 	litest_add("touchpad:palm", touchpad_palm_detect_at_bottom_corners, LITEST_TOUCHPAD, LITEST_CLICKPAD);
 	litest_add("touchpad:palm", touchpad_palm_detect_at_top_corners, LITEST_TOUCHPAD, LITEST_TOPBUTTONPAD);
-	litest_add("touchpad:palm", touchpad_palm_detect_palm_stays_palm, LITEST_TOUCHPAD, LITEST_ANY);
+	litest_add("touchpad:palm", touchpad_palm_detect_palm_becomes_pointer, LITEST_TOUCHPAD, LITEST_ANY);
 	litest_add("touchpad:palm", touchpad_palm_detect_no_palm_moving_into_edges, LITEST_TOUCHPAD, LITEST_ANY);
 
 	return litest_run(argc, argv);