diff --git a/docs/pages/components/dropdown.md b/docs/pages/components/dropdown.md
index da08f881..b1876056 100644
--- a/docs/pages/components/dropdown.md
+++ b/docs/pages/components/dropdown.md
@@ -310,6 +310,96 @@ const App = () => (
 );
 ```
 
+### Submenus
+
+To create a submenu, nest an `<sl-menu slot="submenu">` element in a [menu item](/components/menu-item).
+
+```html:preview
+<sl-dropdown>
+  <sl-button slot="trigger" caret>Edit</sl-button>
+
+  <sl-menu style="max-width: 200px;">
+    <sl-menu-item value="undo">Undo</sl-menu-item>
+    <sl-menu-item value="redo">Redo</sl-menu-item>
+    <sl-divider></sl-divider>
+    <sl-menu-item value="cut">Cut</sl-menu-item>
+    <sl-menu-item value="copy">Copy</sl-menu-item>
+    <sl-menu-item value="paste">Paste</sl-menu-item>
+    <sl-divider></sl-divider>
+    <sl-menu-item>
+      Find
+      <sl-menu slot="submenu">
+        <sl-menu-item value="find">Find…</sl-menu-item>
+        <sl-menu-item value="find-previous">Find Next</sl-menu-item>
+        <sl-menu-item value="find-next">Find Previous</sl-menu-item>
+      </sl-menu>
+    </sl-menu-item>
+    <sl-menu-item>
+      Transformations
+      <sl-menu slot="submenu">
+        <sl-menu-item value="uppercase">Make uppercase</sl-menu-item>
+        <sl-menu-item value="lowercase">Make lowercase</sl-menu-item>
+        <sl-menu-item value="capitalize">Capitalize</sl-menu-item>
+      </sl-menu>
+    </sl-menu-item>
+  </sl-menu>
+</sl-dropdown>
+```
+
+```jsx:react
+import SlButton from '@shoelace-style/shoelace/dist/react/button';
+import SlDivider from '@shoelace-style/shoelace/dist/react/divider';
+import SlDropdown from '@shoelace-style/shoelace/dist/react/dropdown';
+import SlMenu from '@shoelace-style/shoelace/dist/react/menu';
+import SlMenuItem from '@shoelace-style/shoelace/dist/react/menu-item';
+
+const css = `
+  .dropdown-hoist {
+    border: solid 2px var(--sl-panel-border-color);
+    padding: var(--sl-spacing-medium);
+    overflow: hidden;
+  }
+`;
+
+const App = () => (
+  <>
+    <SlDropdown>
+      <SlButton slot="trigger" caret>Edit</SlButton>
+
+      <SlMenu style="max-width: 200px;">
+        <SlMenuItem value="undo">Undo</SlMenuItem>
+        <SlMenuItem value="redo">Redo</SlMenuItem>
+        <SlDivider />
+        <SlMenuItem value="cut">Cut</SlMenuItem>
+        <SlMenuItem value="copy">Copy</SlMenuItem>
+        <SlMenuItem value="paste">Paste</SlMenuItem>
+        <SlDivider />
+        <SlMenuItem>
+          Find
+          <SlMenu slot="submenu">
+            <SlMenuItem value="find">Find…</SlMenuItem>
+            <SlMenuItem value="find-previous">Find Next</SlMenuItem>
+            <SlMenuItem value="find-next">Find Previous</SlMenuItem>
+          </SlMenu>
+        </SlMenuItem>
+        <SlMenuItem>
+          Transformations
+          <SlMenu slot="submenu">
+            <SlMenuItem value="uppercase">Make uppercase</SlMenuItem>
+            <SlMenuItem value="lowercase">Make lowercase</SlMenuItem>
+            <SlMenuItem value="capitalize">Capitalize</SlMenuItem>
+          </SlMenu>
+        </SlMenuItem>
+      </SlMenu>
+    </SlDropdown>
+  </>
+);
+```
+
+:::warning
+As a UX best practice, avoid using more than one level of submenu when possible.
+:::
+
 ### Hoisting
 
 Dropdown panels will be clipped if they're inside a container that has `overflow: auto|hidden`. The `hoist` attribute forces the panel to use a fixed positioning strategy, allowing it to break out of the container. In this case, the panel will be positioned relative to its [containing block](https://developer.mozilla.org/en-US/docs/Web/CSS/Containing_block#Identifying_the_containing_block), which is usually the viewport unless an ancestor uses a `transform`, `perspective`, or `filter`. [Refer to this page](https://developer.mozilla.org/en-US/docs/Web/CSS/position#fixed) for more details.
@@ -349,7 +439,6 @@ Dropdown panels will be clipped if they're inside a container that has `overflow
 import SlButton from '@shoelace-style/shoelace/dist/react/button';
 import SlDivider from '@shoelace-style/shoelace/dist/react/divider';
 import SlDropdown from '@shoelace-style/shoelace/dist/react/dropdown';
-import SlIcon from '@shoelace-style/shoelace/dist/react/icon';
 import SlMenu from '@shoelace-style/shoelace/dist/react/menu';
 import SlMenuItem from '@shoelace-style/shoelace/dist/react/menu-item';
 
diff --git a/docs/pages/components/menu.md b/docs/pages/components/menu.md
index 2039960a..dd9c662d 100644
--- a/docs/pages/components/menu.md
+++ b/docs/pages/components/menu.md
@@ -44,3 +44,112 @@ const App = () => (
 :::tip
 Menus are intended for system menus (dropdown menus, select menus, context menus, etc.). They should not be mistaken for navigation menus which serve a different purpose and have a different semantic meaning. If you're building navigation, use `<nav>` and `<a>` elements instead.
 :::
+
+## Examples
+
+### In Dropdowns
+
+Menus work really well when used inside [dropdowns](/components/dropdown).
+
+```html:preview
+<sl-dropdown>
+  <sl-button slot="trigger" caret>Edit</sl-button>
+  <sl-menu>
+    <sl-menu-item value="cut">Cut</sl-menu-item>
+    <sl-menu-item value="copy">Copy</sl-menu-item>
+    <sl-menu-item value="paste">Paste</sl-menu-item>
+  </sl-menu>
+</sl-dropdown>
+```
+
+```jsx:react
+import SlButton from '@shoelace-style/shoelace/dist/react/button';
+import SlDropdown from '@shoelace-style/shoelace/dist/react/dropdown';
+import SlMenu from '@shoelace-style/shoelace/dist/react/menu';
+import SlMenuItem from '@shoelace-style/shoelace/dist/react/menu-item';
+
+const App = () => (
+  <SlDropdown>
+    <SlButton slot="trigger" caret>Edit</SlButton>
+    <SlMenu>
+      <SlMenuItem value="cut">Cut</SlMenuItem>
+      <SlMenuItem value="copy">Copy</SlMenuItem>
+      <SlMenuItem value="paste">Paste</SlMenuItem>
+    </SlMenu>
+  </SlDropdown>
+);
+```
+
+### Submenus
+
+To create a submenu, nest an `<sl-menu slot="submenu">` in any [menu item](/components/menu-item).
+
+```html:preview
+<sl-menu style="max-width: 200px;">
+  <sl-menu-item value="undo">Undo</sl-menu-item>
+  <sl-menu-item value="redo">Redo</sl-menu-item>
+  <sl-divider></sl-divider>
+  <sl-menu-item value="cut">Cut</sl-menu-item>
+  <sl-menu-item value="copy">Copy</sl-menu-item>
+  <sl-menu-item value="paste">Paste</sl-menu-item>
+  <sl-divider></sl-divider>
+  <sl-menu-item>
+    Find
+    <sl-menu slot="submenu">
+      <sl-menu-item value="find">Find…</sl-menu-item>
+      <sl-menu-item value="find-previous">Find Next</sl-menu-item>
+      <sl-menu-item value="find-next">Find Previous</sl-menu-item>
+    </sl-menu>
+  </sl-menu-item>
+  <sl-menu-item>
+    Transformations
+    <sl-menu slot="submenu">
+      <sl-menu-item value="uppercase">Make uppercase</sl-menu-item>
+      <sl-menu-item value="lowercase">Make lowercase</sl-menu-item>
+      <sl-menu-item value="capitalize">Capitalize</sl-menu-item>
+    </sl-menu>
+  </sl-menu-item>
+</sl-menu>
+```
+
+{% raw %}
+
+```jsx:react
+import SlDivider from '@shoelace-style/shoelace/dist/react/divider';
+import SlMenu from '@shoelace-style/shoelace/dist/react/menu';
+import SlMenuItem from '@shoelace-style/shoelace/dist/react/menu-item';
+
+const App = () => (
+  <SlMenu style={{ maxWidth: '200px' }}>
+    <SlMenuItem value="undo">Undo</SlMenuItem>
+    <SlMenuItem value="redo">Redo</SlMenuItem>
+    <SlDivider />
+    <SlMenuItem value="cut">Cut</SlMenuItem>
+    <SlMenuItem value="copy">Copy</SlMenuItem>
+    <SlMenuItem value="paste">Paste</SlMenuItem>
+    <SlDivider />
+    <SlMenuItem>
+      Find
+      <SlMenu slot="submenu">
+        <SlMenuItem value="find">Find…</SlMenuItem>
+        <SlMenuItem value="find-previous">Find Next</SlMenuItem>
+        <SlMenuItem value="find-next">Find Previous</SlMenuItem>
+      </SlMenu>
+    </SlMenuItem>
+    <SlMenuItem>
+      Transformations
+      <SlMenu slot="submenu">
+        <SlMenuItem value="uppercase">Make uppercase</SlMenuItem>
+        <SlMenuItem value="lowercase">Make lowercase</SlMenuItem>
+        <SlMenuItem value="capitalize">Capitalize</SlMenuItem>
+      </SlMenu>
+    </SlMenuItem>
+  </SlMenu>
+);
+```
+
+:::warning
+As a UX best practice, avoid using more than one level of submenus when possible.
+:::
+
+{% endraw %}
diff --git a/docs/pages/components/select.md b/docs/pages/components/select.md
index 4705dc07..f71750a2 100644
--- a/docs/pages/components/select.md
+++ b/docs/pages/components/select.md
@@ -383,10 +383,8 @@ The preferred placement of the select's listbox can be set with the `placement`
 ```
 
 ```jsx:react
-import {
-  SlOption,
-  SlSelect
-} from '@shoelace-style/shoelace/dist/react';
+import SlOption from '@shoelace-style/shoelace/dist/react/option';
+import SlSelect from '@shoelace-style/shoelace/dist/react/select';
 
 const App = () => (
   <SlSelect placement="top">
diff --git a/docs/pages/resources/changelog.md b/docs/pages/resources/changelog.md
index 1463fb5f..0342e603 100644
--- a/docs/pages/resources/changelog.md
+++ b/docs/pages/resources/changelog.md
@@ -14,9 +14,12 @@ New versions of Shoelace are released as-needed and generally occur when a criti
 
 ## Next
 
+- Added support for submenus in `<sl-menu-item>` [#1410]
+- Added the `--submenu-offset` custom property to `<sl-menu-item>` [#1410]
 - Fixed type issues with the `ref` attribute in React Wrappers. [#1526]
 - Fixed a regression that caused `<sl-radio-button>` to render incorrectly with gaps [#1523]
 - Improved expand/collapse behavior of `<sl-tree>` to work more like users expect [#1521]
+- Improved `<sl-menu-item>` so labels truncate properly instead of getting chopped and overflowing
 
 ## 2.7.0
 
diff --git a/src/components/menu-item/menu-item.component.ts b/src/components/menu-item/menu-item.component.ts
index 32829dfd..ebb92eef 100644
--- a/src/components/menu-item/menu-item.component.ts
+++ b/src/components/menu-item/menu-item.component.ts
@@ -1,10 +1,13 @@
 import { classMap } from 'lit/directives/class-map.js';
-import { getTextContent } from '../../internal/slot.js';
+import { getTextContent, HasSlotController } from '../../internal/slot.js';
 import { html } from 'lit';
+import { LocalizeController } from '../../utilities/localize.js';
 import { property, query } from 'lit/decorators.js';
+import { SubmenuController } from './submenu-controller.js';
 import { watch } from '../../internal/watch.js';
 import ShoelaceElement from '../../internal/shoelace-element.js';
 import SlIcon from '../icon/icon.component.js';
+import SlPopup from '../popup/popup.component.js';
 import styles from './menu-item.styles.js';
 import type { CSSResultGroup } from 'lit';
 
@@ -15,10 +18,12 @@ import type { CSSResultGroup } from 'lit';
  * @since 2.0
  *
  * @dependency sl-icon
+ * @dependency sl-popup
  *
  * @slot - The menu item's label.
  * @slot prefix - Used to prepend an icon or similar element to the menu item.
  * @slot suffix - Used to append an icon or similar element to the menu item.
+ * @slot submenu - Used to denote a nested menu.
  *
  * @csspart base - The component's base wrapper.
  * @csspart checked-icon - The checked icon, which is only visible when the menu item is checked.
@@ -26,10 +31,15 @@ import type { CSSResultGroup } from 'lit';
  * @csspart label - The menu item label.
  * @csspart suffix - The suffix container.
  * @csspart submenu-icon - The submenu icon, visible only when the menu item has a submenu (not yet implemented).
+ *
+ * @cssproperty [--submenu-offset=-2px] - The distance submenus shift to overlap the parent menu.
  */
 export default class SlMenuItem extends ShoelaceElement {
   static styles: CSSResultGroup = styles;
-  static dependencies = { 'sl-icon': SlIcon };
+  static dependencies = {
+    'sl-icon': SlIcon,
+    'sl-popup': SlPopup
+  };
 
   private cachedTextLabel: string;
 
@@ -48,6 +58,22 @@ export default class SlMenuItem extends ShoelaceElement {
   /** Draws the menu item in a disabled state, preventing selection. */
   @property({ type: Boolean, reflect: true }) disabled = false;
 
+  private readonly localize = new LocalizeController(this);
+  private readonly hasSlotController = new HasSlotController(this, 'submenu');
+  private submenuController: SubmenuController = new SubmenuController(this, this.hasSlotController, this.localize);
+
+  connectedCallback() {
+    super.connectedCallback();
+    this.addEventListener('click', this.handleHostClick);
+    this.addEventListener('mouseover', this.handleMouseOver);
+  }
+
+  disconnectedCallback() {
+    super.disconnectedCallback();
+    this.removeEventListener('click', this.handleHostClick);
+    this.removeEventListener('mouseover', this.handleMouseOver);
+  }
+
   private handleDefaultSlotChange() {
     const textLabel = this.getTextLabel();
 
@@ -64,6 +90,19 @@ export default class SlMenuItem extends ShoelaceElement {
     }
   }
 
+  private handleHostClick = (event: MouseEvent) => {
+    // Prevent the click event from being emitted when the button is disabled or loading
+    if (this.disabled) {
+      event.preventDefault();
+      event.stopImmediatePropagation();
+    }
+  };
+
+  private handleMouseOver = (event: MouseEvent) => {
+    this.focus();
+    event.stopPropagation();
+  };
+
   @watch('checked')
   handleCheckedChange() {
     // For proper accessibility, users have to use type="checkbox" to use the checked attribute
@@ -102,16 +141,28 @@ export default class SlMenuItem extends ShoelaceElement {
     return getTextContent(this.defaultSlot);
   }
 
+  isSubmenu() {
+    return this.hasSlotController.test('submenu');
+  }
+
   render() {
+    const isRtl = this.localize.dir() === 'rtl';
+    const isSubmenuExpanded = this.submenuController.isExpanded();
+
     return html`
       <div
+        id="anchor"
         part="base"
         class=${classMap({
           'menu-item': true,
+          'menu-item--rtl': isRtl,
           'menu-item--checked': this.checked,
           'menu-item--disabled': this.disabled,
-          'menu-item--has-submenu': false // reserved for future use
+          'menu-item--has-submenu': this.isSubmenu(),
+          'menu-item--submenu-expanded': isSubmenuExpanded
         })}
+        ?aria-haspopup="${this.isSubmenu()}"
+        ?aria-expanded="${isSubmenuExpanded ? true : false}"
       >
         <span part="checked-icon" class="menu-item__check">
           <sl-icon name="check" library="system" aria-hidden="true"></sl-icon>
@@ -124,8 +175,10 @@ export default class SlMenuItem extends ShoelaceElement {
         <slot name="suffix" part="suffix" class="menu-item__suffix"></slot>
 
         <span part="submenu-icon" class="menu-item__chevron">
-          <sl-icon name="chevron-right" library="system" aria-hidden="true"></sl-icon>
+          <sl-icon name=${isRtl ? 'chevron-left' : 'chevron-right'} library="system" aria-hidden="true"></sl-icon>
         </span>
+
+        ${this.submenuController.renderSubmenu()}
       </div>
     `;
   }
diff --git a/src/components/menu-item/menu-item.styles.ts b/src/components/menu-item/menu-item.styles.ts
index 55c9e2ff..0fccba26 100644
--- a/src/components/menu-item/menu-item.styles.ts
+++ b/src/components/menu-item/menu-item.styles.ts
@@ -5,6 +5,8 @@ export default css`
   ${componentStyles}
 
   :host {
+    --submenu-offset: -2px;
+
     display: block;
   }
 
@@ -38,6 +40,8 @@ export default css`
   .menu-item .menu-item__label {
     flex: 1 1 auto;
     display: inline-block;
+    text-overflow: ellipsis;
+    overflow: hidden;
   }
 
   .menu-item .menu-item__prefix {
@@ -64,7 +68,8 @@ export default css`
     outline: none;
   }
 
-  :host(:hover:not([aria-disabled='true'], :focus-visible)) .menu-item {
+  :host(:hover:not([aria-disabled='true'], :focus-visible)) .menu-item,
+  .menu-item--submenu-expanded {
     background-color: var(--sl-color-neutral-100);
     color: var(--sl-color-neutral-1000);
   }
@@ -91,6 +96,17 @@ export default css`
     visibility: visible;
   }
 
+  /* Add elevation and z-index to submenus */
+  sl-popup::part(popup) {
+    box-shadow: var(--sl-shadow-large);
+    z-index: var(--sl-z-index-dropdown);
+    margin-left: var(--submenu-offset);
+  }
+
+  .menu-item--rtl sl-popup::part(popup) {
+    margin-left: calc(-1 * var(--submenu-offset));
+  }
+
   @media (forced-colors: active) {
     :host(:hover:not([aria-disabled='true'])) .menu-item,
     :host(:focus-visible) .menu-item {
diff --git a/src/components/menu-item/menu-item.test.ts b/src/components/menu-item/menu-item.test.ts
index 45c92dda..40070ce9 100644
--- a/src/components/menu-item/menu-item.test.ts
+++ b/src/components/menu-item/menu-item.test.ts
@@ -1,7 +1,9 @@
 import '../../../dist/shoelace.js';
 import { expect, fixture, html, waitUntil } from '@open-wc/testing';
+import { sendKeys } from '@web/test-runner-commands';
 import sinon from 'sinon';
 import type SlMenuItem from './menu-item';
+import type SlSelectEvent from '../../events/sl-select';
 
 describe('<sl-menu-item>', () => {
   it('should pass accessibility tests', async () => {
@@ -18,6 +20,21 @@ describe('<sl-menu-item>', () => {
     await expect(el).to.be.accessible();
   });
 
+  it('should pass accessibility tests when using a submenu', async () => {
+    const el = await fixture<SlMenuItem>(html`
+      <sl-menu>
+        <sl-menu-item>
+          Submenu
+          <sl-menu slot="submenu">
+            <sl-menu-item>Submenu Item 1</sl-menu-item>
+            <sl-menu-item>Submenu Item 2</sl-menu-item>
+          </sl-menu>
+        </sl-menu-item>
+      </sl-menu>
+    `);
+    await expect(el).to.be.accessible();
+  });
+
   it('should have the correct default properties', async () => {
     const el = await fixture<SlMenuItem>(html` <sl-menu-item>Test</sl-menu-item> `);
 
@@ -59,4 +76,98 @@ describe('<sl-menu-item>', () => {
 
     expect(getComputedStyle(item1).display).to.equal('none');
   });
+
+  it('should not render a sl-popup if the slot="submenu" attribute is missing, but the slot should exist in the component and be hidden.', async () => {
+    const menu = await fixture<SlMenuItem>(html`
+      <sl-menu>
+        <sl-menu-item>
+          Item 1
+          <sl-menu>
+            <sl-menu-item> Nested Item 1 </sl-menu-item>
+          </sl-menu>
+        </sl-menu-item>
+      </sl-menu>
+    `);
+
+    const menuItem: HTMLElement = menu.querySelector('sl-menu-item')!;
+    expect(menuItem.shadowRoot!.querySelector('sl-popup')).to.be.null;
+    const submenuSlot: HTMLElement = menuItem.shadowRoot!.querySelector('slot[name="submenu"]')!;
+    expect(submenuSlot.hidden).to.be.true;
+  });
+
+  it('should render an sl-popup if the slot="submenu" attribute is present', async () => {
+    const menu = await fixture<SlMenuItem>(html`
+      <sl-menu>
+        <sl-menu-item id="test">
+          Item 1
+          <sl-menu slot="submenu">
+            <sl-menu-item> Nested Item 1 </sl-menu-item>
+          </sl-menu>
+        </sl-menu-item>
+      </sl-menu>
+    `);
+
+    const menuItem = menu.querySelector('sl-menu-item')!;
+    expect(menuItem.shadowRoot!.querySelector('sl-popup')).to.be.not.null;
+    const submenuSlot: HTMLElement = menuItem.shadowRoot!.querySelector('slot[name="submenu"]')!;
+    expect(submenuSlot.hidden).to.be.false;
+  });
+
+  it('should focus on first menuitem of submenu if ArrowRight is pressed on parent menuitem', async () => {
+    const menu = await fixture<SlMenuItem>(html`
+      <sl-menu>
+        <sl-menu-item id="item-1">
+          Submenu
+          <sl-menu slot="submenu">
+            <sl-menu-item value="submenu-item-1"> Nested Item 1 </sl-menu-item>
+          </sl-menu>
+        </sl-menu-item>
+      </sl-menu>
+    `);
+
+    const selectHandler = sinon.spy((event: SlSelectEvent) => {
+      const item = event.detail.item;
+      expect(item.value).to.equal('submenu-item-1');
+    });
+    menu.addEventListener('sl-select', selectHandler);
+
+    const submenu = menu.querySelector('sl-menu-item');
+    submenu!.focus();
+    await menu.updateComplete;
+    await sendKeys({ press: 'ArrowRight' });
+    await menu.updateComplete;
+    await sendKeys({ press: 'Enter' });
+    await menu.updateComplete;
+    // Once for each menu element.
+    expect(selectHandler).to.have.been.calledTwice;
+  });
+
+  it('should focus on outer menu if ArrowRight is pressed on nested menuitem', async () => {
+    const menu = await fixture<SlMenuItem>(html`
+      <sl-menu>
+        <sl-menu-item value="outer-item-1">
+          Submenu
+          <sl-menu slot="submenu">
+            <sl-menu-item value="inner-item-1"> Nested Item 1 </sl-menu-item>
+          </sl-menu>
+        </sl-menu-item>
+      </sl-menu>
+    `);
+
+    const focusHandler = sinon.spy((event: FocusEvent) => {
+      expect(event.target.value).to.equal('outer-item-1');
+      expect(event.relatedTarget.value).to.equal('inner-item-1');
+    });
+
+    const outerItem = menu.querySelector('sl-menu-item');
+    outerItem!.focus();
+    await menu.updateComplete;
+    await sendKeys({ press: 'ArrowRight' });
+
+    outerItem.addEventListener('focus', focusHandler);
+    await menu.updateComplete;
+    await sendKeys({ press: 'ArrowLeft' });
+    await menu.updateComplete;
+    expect(focusHandler).to.have.been.calledOnce;
+  });
 });
diff --git a/src/components/menu-item/submenu-controller.ts b/src/components/menu-item/submenu-controller.ts
new file mode 100644
index 00000000..5a62c32c
--- /dev/null
+++ b/src/components/menu-item/submenu-controller.ts
@@ -0,0 +1,262 @@
+import { createRef, ref, type Ref } from 'lit/directives/ref.js';
+import { type HasSlotController } from '../../internal/slot.js';
+import { html } from 'lit';
+import { type LocalizeController } from '../../utilities/localize.js';
+import type { ReactiveController, ReactiveControllerHost } from 'lit';
+import type SlMenuItem from './menu-item.js';
+import type SlPopup from '../popup/popup.js';
+
+/** A reactive controller to manage the registration of event listeners for submenus. */
+export class SubmenuController implements ReactiveController {
+  private host: ReactiveControllerHost & SlMenuItem;
+  private popupRef: Ref<SlPopup> = createRef();
+  private enableSubmenuTimer = -1;
+  private isConnected = false;
+  private isPopupConnected = false;
+  private skidding = 0;
+  private readonly hasSlotController: HasSlotController;
+  private readonly localize: LocalizeController;
+  private readonly submenuOpenDelay = 100;
+
+  constructor(
+    host: ReactiveControllerHost & SlMenuItem,
+    hasSlotController: HasSlotController,
+    localize: LocalizeController
+  ) {
+    (this.host = host).addController(this);
+    this.hasSlotController = hasSlotController;
+    this.localize = localize;
+  }
+
+  hostConnected() {
+    if (this.hasSlotController.test('submenu') && !this.host.disabled) {
+      this.addListeners();
+    }
+  }
+
+  hostDisconnected() {
+    this.removeListeners();
+  }
+
+  hostUpdated() {
+    if (this.hasSlotController.test('submenu') && !this.host.disabled) {
+      this.addListeners();
+      this.updateSkidding();
+    } else {
+      this.removeListeners();
+    }
+  }
+
+  private addListeners() {
+    if (!this.isConnected) {
+      this.host.addEventListener('mouseover', this.handleMouseOver);
+      this.host.addEventListener('keydown', this.handleKeyDown);
+      this.host.addEventListener('click', this.handleClick);
+      this.host.addEventListener('focusout', this.handleFocusOut);
+      this.isConnected = true;
+    }
+
+    // The popup does not seem to get wired when the host is
+    // connected, so manage its listeners separately.
+    if (!this.isPopupConnected) {
+      if (this.popupRef.value) {
+        this.popupRef.value.addEventListener('mouseover', this.handlePopupMouseover);
+        this.isPopupConnected = true;
+      }
+    }
+  }
+
+  private removeListeners() {
+    if (this.isConnected) {
+      this.host.removeEventListener('mouseover', this.handleMouseOver);
+      this.host.removeEventListener('keydown', this.handleKeyDown);
+      this.host.removeEventListener('click', this.handleClick);
+      this.host.removeEventListener('focusout', this.handleFocusOut);
+      this.isConnected = false;
+    }
+    if (this.isPopupConnected) {
+      if (this.popupRef.value) {
+        this.popupRef.value.removeEventListener('mouseover', this.handlePopupMouseover);
+        this.isPopupConnected = false;
+      }
+    }
+  }
+
+  private handleMouseOver = () => {
+    if (this.hasSlotController.test('submenu')) {
+      this.enableSubmenu();
+    }
+  };
+
+  private handleSubmenuEntry(event: KeyboardEvent) {
+    // Pass focus to the first menu-item in the submenu.
+    const submenuSlot: HTMLSlotElement | null = this.host.renderRoot.querySelector("slot[name='submenu']");
+
+    // Missing slot
+    if (!submenuSlot) {
+      console.error('Cannot activate a submenu if no corresponding menuitem can be found.', this);
+      return;
+    }
+
+    // Menus
+    let menuItems: NodeListOf<Element> | null = null;
+    for (const elt of submenuSlot.assignedElements()) {
+      menuItems = elt.querySelectorAll("sl-menu-item, [role^='menuitem']");
+      if (menuItems.length !== 0) {
+        break;
+      }
+    }
+
+    if (!menuItems || menuItems.length === 0) {
+      return;
+    }
+
+    menuItems[0].setAttribute('tabindex', '0');
+    for (let i = 1; i !== menuItems.length; ++i) {
+      menuItems[i].setAttribute('tabindex', '-1');
+    }
+
+    // Open the submenu (if not open), and set focus to first menuitem.
+    if (this.popupRef.value) {
+      event.preventDefault();
+      event.stopPropagation();
+      if (this.popupRef.value.active) {
+        if (menuItems[0] instanceof HTMLElement) {
+          menuItems[0].focus();
+        }
+      } else {
+        this.enableSubmenu(false);
+        this.host.updateComplete.then(() => {
+          if (menuItems![0] instanceof HTMLElement) {
+            menuItems![0].focus();
+          }
+        });
+        this.host.requestUpdate();
+      }
+    }
+  }
+
+  // Focus on the first menu-item of a submenu.
+  private handleKeyDown = (event: KeyboardEvent) => {
+    switch (event.key) {
+      case 'Escape':
+      case 'Tab':
+        this.disableSubmenu();
+        break;
+      case 'ArrowLeft':
+        // Either focus is currently on the host element or a child
+        if (event.target !== this.host) {
+          event.preventDefault();
+          event.stopPropagation();
+          this.host.focus();
+          this.disableSubmenu();
+        }
+        break;
+      case 'ArrowRight':
+      case 'Enter':
+      case ' ':
+        this.handleSubmenuEntry(event);
+        break;
+      default:
+        break;
+    }
+  };
+
+  private handleClick = (event: MouseEvent) => {
+    // Clicking on the item which heads the menu does nothing, otherwise hide submenu and propagate
+    if (event.target === this.host) {
+      event.preventDefault();
+      event.stopPropagation();
+    } else if (
+      event.target instanceof Element &&
+      (event.target.tagName === 'sl-menu-item' || event.target.role?.startsWith('menuitem'))
+    ) {
+      this.disableSubmenu();
+    }
+  };
+
+  // Close this submenu on focus outside of the parent or any descendants.
+  private handleFocusOut = (event: FocusEvent) => {
+    if (event.relatedTarget && event.relatedTarget instanceof Element && this.host.contains(event.relatedTarget)) {
+      return;
+    }
+    this.disableSubmenu();
+  };
+
+  // Prevent the parent menu-item from getting focus on mouse movement on the submenu
+  private handlePopupMouseover = (event: MouseEvent) => {
+    event.stopPropagation();
+  };
+
+  private setSubmenuState(state: boolean) {
+    if (this.popupRef.value) {
+      if (this.popupRef.value.active !== state) {
+        this.popupRef.value.active = state;
+        this.host.requestUpdate();
+      }
+    }
+  }
+
+  // Shows the submenu. Supports disabling the opening delay, e.g. for keyboard events that want to set the focus to the
+  // newly opened menu.
+  private enableSubmenu(delay = true) {
+    if (delay) {
+      this.enableSubmenuTimer = window.setTimeout(() => {
+        this.setSubmenuState(true);
+      }, this.submenuOpenDelay);
+    } else {
+      this.setSubmenuState(true);
+    }
+  }
+
+  private disableSubmenu() {
+    clearTimeout(this.enableSubmenuTimer);
+    this.setSubmenuState(false);
+  }
+
+  // Calculate the space the top of a menu takes-up, for aligning the popup menu-item with the activating element.
+  private updateSkidding(): void {
+    // .computedStyleMap() not always available.
+    if (!this.host.parentElement?.computedStyleMap) {
+      return;
+    }
+    const styleMap: StylePropertyMapReadOnly = this.host.parentElement.computedStyleMap();
+    const attrs: string[] = ['padding-top', 'border-top-width', 'margin-top'];
+
+    const skidding = attrs.reduce((accumulator, attr) => {
+      const styleValue: CSSStyleValue = styleMap.get(attr) ?? new CSSUnitValue(0, 'px');
+      const unitValue = styleValue instanceof CSSUnitValue ? styleValue : new CSSUnitValue(0, 'px');
+      const pxValue = unitValue.to('px');
+      return accumulator - pxValue.value;
+    }, 0);
+
+    this.skidding = skidding;
+  }
+
+  isExpanded(): boolean {
+    return this.popupRef.value ? this.popupRef.value.active : false;
+  }
+
+  renderSubmenu() {
+    const isLtr = this.localize.dir() === 'ltr';
+
+    // Always render the slot, but conditionally render the outer <sl-popup>
+    if (!this.isConnected) {
+      return html` <slot name="submenu" hidden></slot> `;
+    }
+
+    return html`
+      <sl-popup
+        ${ref(this.popupRef)}
+        placement=${isLtr ? 'right-start' : 'left-start'}
+        anchor="anchor"
+        flip
+        flip-fallback-strategy="best-fit"
+        skidding="${this.skidding}"
+        strategy="fixed"
+      >
+        <slot name="submenu"></slot>
+      </sl-popup>
+    `;
+  }
+}
diff --git a/src/components/menu/menu.component.ts b/src/components/menu/menu.component.ts
index e7b79a27..6297a027 100644
--- a/src/components/menu/menu.component.ts
+++ b/src/components/menu/menu.component.ts
@@ -1,9 +1,9 @@
 import { html } from 'lit';
 import { query } from 'lit/decorators.js';
 import ShoelaceElement from '../../internal/shoelace-element.js';
+import SlMenuItem from '../menu-item/menu-item.component.js';
 import styles from './menu.styles.js';
 import type { CSSResultGroup } from 'lit';
-import type SlMenuItem from '../menu-item/menu-item.js';
 export interface MenuSelectEventDetail {
   item: SlMenuItem;
 }
@@ -29,13 +29,12 @@ export default class SlMenu extends ShoelaceElement {
   }
 
   private handleClick(event: MouseEvent) {
-    const target = event.target as HTMLElement;
-    const item = target.closest('sl-menu-item');
-
-    if (!item || item.disabled || item.inert) {
+    if (!(event.target instanceof SlMenuItem)) {
       return;
     }
 
+    const item: SlMenuItem = event.target;
+
     if (item.type === 'checkbox') {
       item.checked = !item.checked;
     }
@@ -48,19 +47,21 @@ export default class SlMenu extends ShoelaceElement {
     if (event.key === 'Enter' || event.key === ' ') {
       const item = this.getCurrentItem();
       event.preventDefault();
+      event.stopPropagation();
 
       // Simulate a click to support @click handlers on menu items that also work with the keyboard
       item?.click();
     }
 
     // Move the selection when pressing down or up
-    if (['ArrowDown', 'ArrowUp', 'Home', 'End'].includes(event.key)) {
+    else if (['ArrowDown', 'ArrowUp', 'Home', 'End'].includes(event.key)) {
       const items = this.getAllItems();
       const activeItem = this.getCurrentItem();
       let index = activeItem ? items.indexOf(activeItem) : 0;
 
       if (items.length > 0) {
         event.preventDefault();
+        event.stopPropagation();
 
         if (event.key === 'ArrowDown') {
           index++;