diff --git a/crates/workspace/src/workspace.rs b/crates/workspace/src/workspace.rs
index 6a5b2c0fbf6..1e27eb3f138 100644
--- a/crates/workspace/src/workspace.rs
+++ b/crates/workspace/src/workspace.rs
@@ -6768,14 +6768,17 @@ impl Workspace {
         window: &mut Window,
         cx: &mut Context<Workspace>,
     ) {
+        let removing_active_pane = self.active_pane() == pane;
         self.panes.retain(|p| p != pane);
         if let Some(focus_on) = focus_on {
+            if removing_active_pane {
+                self.set_active_pane(focus_on, window, cx);
+            }
             focus_on.update(cx, |pane, cx| window.focus(&pane.focus_handle(cx), cx));
-        } else if self.active_pane() == pane {
+        } else if removing_active_pane {
             let fallback_pane = self.panes.last().unwrap().clone();
-            if self.has_active_modal(window, cx) {
-                self.set_active_pane(&fallback_pane, window, cx);
-            } else {
+            self.set_active_pane(&fallback_pane, window, cx);
+            if !self.has_active_modal(window, cx) {
                 fallback_pane.update(cx, |pane, cx| window.focus(&pane.focus_handle(cx), cx));
             }
         }
@@ -14829,6 +14832,47 @@ mod tests {
         });
     }
 
+    #[gpui::test]
+    async fn test_active_pane_updates_to_focus_target_on_removal(cx: &mut TestAppContext) {
+        assert_active_pane_is_replaced_after_removal(cx, true).await;
+    }
+
+    #[gpui::test]
+    async fn test_active_pane_updates_to_fallback_on_removal(cx: &mut TestAppContext) {
+        assert_active_pane_is_replaced_after_removal(cx, false).await;
+    }
+
+    async fn assert_active_pane_is_replaced_after_removal(
+        cx: &mut TestAppContext,
+        use_focus_target: bool,
+    ) {
+        init_test(cx);
+
+        let fs = FakeFs::new(cx.executor());
+        let project = Project::test(fs, [], cx).await;
+        let (workspace, cx) =
+            cx.add_window_view(|window, cx| Workspace::test_new(project.clone(), window, cx));
+
+        workspace.update_in(cx, |workspace, window, cx| {
+            let first_pane = workspace.active_pane().clone();
+            let second_pane =
+                workspace.split_pane(first_pane.clone(), SplitDirection::Right, window, cx);
+            workspace.set_active_pane(&second_pane, window, cx);
+
+            let focus_target = use_focus_target.then(|| first_pane.clone());
+            workspace.remove_pane(second_pane, focus_target, window, cx);
+
+            assert_eq!(workspace.active_pane(), &first_pane);
+            assert!(
+                workspace
+                    .panes()
+                    .iter()
+                    .any(|pane| pane == workspace.active_pane()),
+                "active pane should be one of the remaining workspace panes"
+            );
+        });
+    }
+
     #[gpui::test]
     async fn test_moving_items_create_panes(cx: &mut TestAppContext) {
         init_test(cx);