diff --git a/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java b/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
index 990f04b58f95e..2c5c3cdf3554a 100644
--- a/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
+++ b/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
@@ -142,6 +142,9 @@ public class BouncerSwipeTouchHandler implements DreamTouchHandler {
 
     private void setPanelExpansion(float expansion) {
         mCurrentExpansion = expansion;
+
+        mCentralSurfaces.setBouncerShowing(expansion != KeyguardBouncer.EXPANSION_HIDDEN);
+
         mStatusBarKeyguardViewManager.onPanelExpansionChanged(mCurrentExpansion, false, true);
     }
 
diff --git a/packages/SystemUI/src/com/android/systemui/statusbar/phone/CentralSurfaces.java b/packages/SystemUI/src/com/android/systemui/statusbar/phone/CentralSurfaces.java
index 1625d9b7f486c..ae26160e35aa7 100644
--- a/packages/SystemUI/src/com/android/systemui/statusbar/phone/CentralSurfaces.java
+++ b/packages/SystemUI/src/com/android/systemui/statusbar/phone/CentralSurfaces.java
@@ -3468,9 +3468,7 @@ public class CentralSurfaces extends CoreStartable implements
         mStatusBarHideIconsForBouncerManager.setBouncerShowingAndTriggerUpdate(bouncerShowing);
         mCommandQueue.recomputeDisableFlags(mDisplayId, true /* animate */);
         updateScrimController();
-        if (!mBouncerShowing) {
-            updatePanelExpansionForKeyguard();
-        }
+        updateNotificationPanelTouchState();
     }
 
     /**
@@ -3614,10 +3612,13 @@ public class CentralSurfaces extends CoreStartable implements
      * collapse the panel after we expanded it, and thus we would end up with a blank
      * Keyguard.
      */
-    void updateNotificationPanelTouchState() {
+    public void updateNotificationPanelTouchState() {
         boolean goingToSleepWithoutAnimation = isGoingToSleep()
                 && !mDozeParameters.shouldControlScreenOff();
-        boolean disabled = (!mDeviceInteractive && !mDozeServiceHost.isPulsing())
+        boolean bouncerShowingOverDream = isBouncerShowing()
+                && mDreamOverlayStateController.isOverlayActive();
+        boolean disabled = bouncerShowingOverDream
+                || (!mDeviceInteractive && !mDozeServiceHost.isPulsing())
                 || goingToSleepWithoutAnimation;
         mNotificationPanelViewController.setTouchAndAnimationDisabled(disabled);
         mNotificationIconAreaController.setAnimationsEnabled(!disabled);
diff --git a/packages/SystemUI/src/com/android/systemui/statusbar/phone/PanelViewController.java b/packages/SystemUI/src/com/android/systemui/statusbar/phone/PanelViewController.java
index 71f199f330a5e..303b2585cb624 100644
--- a/packages/SystemUI/src/com/android/systemui/statusbar/phone/PanelViewController.java
+++ b/packages/SystemUI/src/com/android/systemui/statusbar/phone/PanelViewController.java
@@ -419,6 +419,8 @@ public abstract class PanelViewController {
                     expand = false;
                 } else if (onKeyguard) {
                     expand = true;
+                } else if (mCentralSurfaces.isBouncerShowingOverDream()) {
+                    expand = false;
                 } else if (mKeyguardStateController.isKeyguardFadingAway()) {
                     // If we're in the middle of dismissing the keyguard, don't expand due to the
                     // cancelled gesture. Gesture cancellation during an unlock is expected in some
diff --git a/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java b/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
index a016a1d8ca70f..761a2c2c8e048 100644
--- a/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
+++ b/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
@@ -160,6 +160,28 @@ public class BouncerSwipeTouchHandlerTest extends SysuiTestCase {
                         2)).isTrue();
     }
 
+    /**
+     * Ensures {@link CentralSurfaces}
+     */
+    @Test
+    public void testInformBouncerShowingOnExpand() {
+        swipeToPosition(1f, Direction.UP, 0);
+        verify(mCentralSurfaces).setBouncerShowing(true);
+    }
+
+    /**
+     * Ensures {@link CentralSurfaces}
+     */
+    @Test
+    public void testInformBouncerHidingOnCollapse() {
+        // Must swipe up to set initial state.
+        swipeToPosition(1f, Direction.UP, 0);
+        Mockito.clearInvocations(mCentralSurfaces);
+
+        swipeToPosition(0f, Direction.DOWN, 0);
+        verify(mCentralSurfaces).setBouncerShowing(false);
+    }
+
     private enum Direction {
         DOWN,
         UP,
@@ -397,6 +419,7 @@ public class BouncerSwipeTouchHandlerTest extends SysuiTestCase {
     }
 
     private void swipeToPosition(float percent, Direction direction, float velocityY) {
+        Mockito.clearInvocations(mTouchSession);
         mTouchHandler.onSessionStart(mTouchSession);
         ArgumentCaptor<GestureDetector.OnGestureListener> gestureListenerCaptor =
                 ArgumentCaptor.forClass(GestureDetector.OnGestureListener.class);