diff --git a/tests/unit/droppable/droppable_options.js b/tests/unit/droppable/droppable_options.js
index 0971f1377..9bfa25881 100644
--- a/tests/unit/droppable/droppable_options.js
+++ b/tests/unit/droppable/droppable_options.js
@@ -96,7 +96,7 @@ test( "tolerance, intersect", function() {
 */
 
 test( "tolerance, pointer", function() {
-	expect( 2 );
+	expect( 3 );
 
 	var draggable, droppable,
 		dataset = [
@@ -132,6 +132,19 @@ test( "tolerance, pointer", function() {
 			dy: ( data[ 1 ] - $( draggable ).position().top )
 		});
 	});
+
+	// http://bugs.jqueryui.com/ticket/4977 - tolerance, pointer - bug when pointer outside draggable
+	draggable.css({ top: 0, left: 0 }).draggable( "option", "axis", "x" );
+	droppable.css({ top: 15, left: 15 });
+
+	droppable.unbind( "drop" ).bind( "drop", function() {
+		ok( true, "drop fires as long as pointer is within droppable" );
+	});
+
+	$( draggable ).simulate( "drag", {
+		dx: 10,
+		dy: 10
+	});
 });
 
 /*
diff --git a/ui/droppable.js b/ui/droppable.js
index 826f46e58..fce8d9bd9 100644
--- a/ui/droppable.js
+++ b/ui/droppable.js
@@ -191,7 +191,7 @@ $.widget( "ui.droppable", {
 				!inst.options.disabled &&
 				inst.options.scope === draggable.options.scope &&
 				inst.accept.call( inst.element[ 0 ], ( draggable.currentItem || draggable.element ) ) &&
-				$.ui.intersect( draggable, $.extend( inst, { offset: inst.element.offset() } ), inst.options.tolerance )
+				$.ui.intersect( draggable, $.extend( inst, { offset: inst.element.offset() } ), inst.options.tolerance, event )
 			) { childrenIntersection = true; return false; }
 		});
 		if ( childrenIntersection ) {
@@ -229,14 +229,13 @@ $.ui.intersect = (function() {
 		return ( x >= reference ) && ( x < ( reference + size ) );
 	}
 
-	return function( draggable, droppable, toleranceMode ) {
+	return function( draggable, droppable, toleranceMode, event ) {
 
 		if ( !droppable.offset ) {
 			return false;
 		}
 
-		var draggableLeft, draggableTop,
-			x1 = ( draggable.positionAbs || draggable.position.absolute ).left,
+		var x1 = ( draggable.positionAbs || draggable.position.absolute ).left,
 			y1 = ( draggable.positionAbs || draggable.position.absolute ).top,
 			x2 = x1 + draggable.helperProportions.width,
 			y2 = y1 + draggable.helperProportions.height,
@@ -254,9 +253,7 @@ $.ui.intersect = (function() {
 				t < y1 + ( draggable.helperProportions.height / 2 ) && // Bottom Half
 				y2 - ( draggable.helperProportions.height / 2 ) < b ); // Top Half
 		case "pointer":
-			draggableLeft = ( ( draggable.positionAbs || draggable.position.absolute ).left + ( draggable.clickOffset || draggable.offset.click ).left );
-			draggableTop = ( ( draggable.positionAbs || draggable.position.absolute ).top + ( draggable.clickOffset || draggable.offset.click ).top );
-			return isOverAxis( draggableTop, t, droppable.proportions().height ) && isOverAxis( draggableLeft, l, droppable.proportions().width );
+			return isOverAxis( event.pageY, t, droppable.proportions().height ) && isOverAxis( event.pageX, l, droppable.proportions().width );
 		case "touch":
 			return (
 				( y1 >= t && y1 <= b ) || // Top edge touching
@@ -326,7 +323,7 @@ $.ui.ddmanager = {
 			if ( !this.options ) {
 				return;
 			}
-			if ( !this.options.disabled && this.visible && $.ui.intersect( draggable, this, this.options.tolerance ) ) {
+			if ( !this.options.disabled && this.visible && $.ui.intersect( draggable, this, this.options.tolerance, event ) ) {
 				dropped = this._drop.call( this, event ) || dropped;
 			}
 
@@ -363,7 +360,7 @@ $.ui.ddmanager = {
 			}
 
 			var parentInstance, scope, parent,
-				intersects = $.ui.intersect( draggable, this, this.options.tolerance ),
+				intersects = $.ui.intersect( draggable, this, this.options.tolerance, event ),
 				c = !intersects && this.isover ? "isout" : ( intersects && !this.isover ? "isover" : null );
 			if ( !c ) {
 				return;