diff --git a/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.spec.ts b/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.spec.ts
index 1d571d68fbbb..34e3e808cf20 100644
--- a/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.spec.ts
+++ b/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.spec.ts
@@ -180,6 +180,79 @@ describe('OverlayOutsideClickDispatcher', () => {
     overlayRef.dispose();
   });
 
+  it('should dispatch an event when a click is started outside the overlay and ' +
+    'released outside of it', () => {
+    const portal = new ComponentPortal(TestComponent);
+    const overlayRef = overlay.create();
+    overlayRef.attach(portal);
+    const context = document.createElement('div');
+    document.body.appendChild(context);
+
+    const spy = jasmine.createSpy('overlay mouse click event spy');
+    overlayRef.outsidePointerEvents().subscribe(spy);
+
+    dispatchMouseEvent(context, 'pointerdown');
+    context.click();
+    expect(spy).toHaveBeenCalled();
+
+    context.remove();
+    overlayRef.dispose();
+  });
+
+  it('should not dispatch an event when a click is started inside the overlay and ' +
+    'released inside of it', () => {
+    const portal = new ComponentPortal(TestComponent);
+    const overlayRef = overlay.create();
+    overlayRef.attach(portal);
+
+    const spy = jasmine.createSpy('overlay mouse click event spy');
+    overlayRef.outsidePointerEvents().subscribe(spy);
+
+    dispatchMouseEvent(overlayRef.overlayElement, 'pointerdown');
+    overlayRef.overlayElement.click();
+    expect(spy).not.toHaveBeenCalled();
+
+    overlayRef.dispose();
+  });
+
+  it('should not dispatch an event when a click is started inside the overlay and ' +
+    'released outside of it', () => {
+    const portal = new ComponentPortal(TestComponent);
+    const overlayRef = overlay.create();
+    overlayRef.attach(portal);
+    const context = document.createElement('div');
+    document.body.appendChild(context);
+
+    const spy = jasmine.createSpy('overlay mouse click event spy');
+    overlayRef.outsidePointerEvents().subscribe(spy);
+
+    dispatchMouseEvent(overlayRef.overlayElement, 'pointerdown');
+    context.click();
+    expect(spy).not.toHaveBeenCalled();
+
+    context.remove();
+    overlayRef.dispose();
+  });
+
+  it('should not dispatch an event when a click is started outside the overlay and ' +
+    'released inside of it', () => {
+    const portal = new ComponentPortal(TestComponent);
+    const overlayRef = overlay.create();
+    overlayRef.attach(portal);
+    const context = document.createElement('div');
+    document.body.appendChild(context);
+
+    const spy = jasmine.createSpy('overlay mouse click event spy');
+    overlayRef.outsidePointerEvents().subscribe(spy);
+
+    dispatchMouseEvent(context, 'pointerdown');
+    overlayRef.overlayElement.click();
+    expect(spy).not.toHaveBeenCalled();
+
+    context.remove();
+    overlayRef.dispose();
+  });
+
   it('should dispatch an event when a context menu is triggered outside the overlay', () => {
     const portal = new ComponentPortal(TestComponent);
     const overlayRef = overlay.create();
diff --git a/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.ts b/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.ts
index 38f06362543f..b2a4217a2844 100644
--- a/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.ts
+++ b/src/cdk/overlay/dispatchers/overlay-outside-click-dispatcher.ts
@@ -21,6 +21,7 @@ import {BaseOverlayDispatcher} from './base-overlay-dispatcher';
 export class OverlayOutsideClickDispatcher extends BaseOverlayDispatcher {
   private _cursorOriginalValue: string;
   private _cursorStyleIsSet = false;
+  private _pointerDownEventTarget: EventTarget | null;
 
   constructor(@Inject(DOCUMENT) document: any, private _platform: Platform) {
     super(document);
@@ -38,6 +39,7 @@ export class OverlayOutsideClickDispatcher extends BaseOverlayDispatcher {
     // https://developer.apple.com/library/archive/documentation/AppleApplications/Reference/SafariWebContent/HandlingEvents/HandlingEvents.html
     if (!this._isAttached) {
       const body = this._document.body;
+      body.addEventListener('pointerdown', this._pointerDownListener, true);
       body.addEventListener('click', this._clickListener, true);
       body.addEventListener('auxclick', this._clickListener, true);
       body.addEventListener('contextmenu', this._clickListener, true);
@@ -58,6 +60,7 @@ export class OverlayOutsideClickDispatcher extends BaseOverlayDispatcher {
   protected detach() {
     if (this._isAttached) {
       const body = this._document.body;
+      body.removeEventListener('pointerdown', this._pointerDownListener, true);
       body.removeEventListener('click', this._clickListener, true);
       body.removeEventListener('auxclick', this._clickListener, true);
       body.removeEventListener('contextmenu', this._clickListener, true);
@@ -69,9 +72,26 @@ export class OverlayOutsideClickDispatcher extends BaseOverlayDispatcher {
     }
   }
 
+  /** Store pointerdown event target to track origin of click. */
+  private _pointerDownListener = (event: PointerEvent) => {
+    this._pointerDownEventTarget = _getEventTarget(event);
+  }
+
   /** Click event listener that will be attached to the body propagate phase. */
   private _clickListener = (event: MouseEvent) => {
     const target = _getEventTarget(event);
+    // In case of a click event, we want to check the origin of the click
+    // (e.g. in case where a user starts a click inside the overlay and
+    // releases the click outside of it).
+    // This is done by using the event target of the preceding pointerdown event.
+    // Every click event caused by a pointer device has a preceding pointerdown
+    // event, unless the click was programmatically triggered (e.g. in a unit test).
+    const origin = event.type === 'click' && this._pointerDownEventTarget
+      ? this._pointerDownEventTarget : target;
+    // Reset the stored pointerdown event target, to avoid having it interfere
+    // in subsequent events.
+    this._pointerDownEventTarget = null;
+
     // We copy the array because the original may be modified asynchronously if the
     // outsidePointerEvents listener decides to detach overlays resulting in index errors inside
     // the for loop.
@@ -88,8 +108,10 @@ export class OverlayOutsideClickDispatcher extends BaseOverlayDispatcher {
       }
 
       // If it's a click inside the overlay, just break - we should do nothing
-      // If it's an outside click dispatch the mouse event, and proceed with the next overlay
-      if (overlayRef.overlayElement.contains(target as Node)) {
+      // If it's an outside click (both origin and target of the click) dispatch the mouse event,
+      // and proceed with the next overlay
+      if (overlayRef.overlayElement.contains(target as Node) ||
+          overlayRef.overlayElement.contains(origin as Node)) {
         break;
       }