diff --git a/editor/src/messages/portfolio/portfolio_message.rs b/editor/src/messages/portfolio/portfolio_message.rs
index 763d73b629..5faa6c28a5 100644
--- a/editor/src/messages/portfolio/portfolio_message.rs
+++ b/editor/src/messages/portfolio/portfolio_message.rs
@@ -108,6 +108,10 @@ pub enum PortfolioMessage {
 		mouse: Option<(f64, f64)>,
 		parent_and_insert_index: Option<(LayerNodeIdentifier, usize)>,
 	},
+	ImportSvgAsNewDocument {
+		name: Option<String>,
+		svg: String,
+	},
 	PrevDocument,
 	SetActivePanel {
 		panel: PanelType,
diff --git a/editor/src/messages/portfolio/portfolio_message_handler.rs b/editor/src/messages/portfolio/portfolio_message_handler.rs
index 4e70ceb68c..03126b67e5 100644
--- a/editor/src/messages/portfolio/portfolio_message_handler.rs
+++ b/editor/src/messages/portfolio/portfolio_message_handler.rs
@@ -865,6 +865,21 @@ impl MessageHandler<PortfolioMessage, PortfolioMessageContext<'_>> for Portfolio
 					});
 				}
 			}
+			PortfolioMessage::ImportSvgAsNewDocument { name, svg } => {
+				// Create a new document explicitly
+				responses.add(PortfolioMessage::NewDocumentWithName { name: name.clone().unwrap_or(DEFAULT_DOCUMENT_NAME.into()) });
+
+				responses.add(DocumentMessage::PasteSvg {
+					name,
+					svg,
+					mouse: None,
+					parent_and_insert_index: None,
+				});
+
+				// After graph runs, wrap contents in artboard and zoom to fit
+				responses.add(DeferMessage::AfterGraphRun { messages: vec![DocumentMessage::WrapContentInArtboard { place_artboard_at_origin: true }.into()] });
+				responses.add(DeferMessage::AfterNavigationReady { messages: vec![DocumentMessage::ZoomCanvasToFitAll.into()] });
+			}
 			PortfolioMessage::PrevDocument => {
 				if let Some(active_document_id) = self.active_document_id {
 					let len = self.document_ids.len();
diff --git a/frontend/src/components/panels/Document.svelte b/frontend/src/components/panels/Document.svelte
index c259c9ba74..cbc6133f7f 100644
--- a/frontend/src/components/panels/Document.svelte
+++ b/frontend/src/components/panels/Document.svelte
@@ -23,6 +23,8 @@
 	import { updateBoundsOfViewports } from "@graphite/utility-functions/viewports";
 
 	import EyedropperPreview, { ZOOM_WINDOW_DIMENSIONS } from "@graphite/components/floating-menus/EyedropperPreview.svelte";
+	import MenuList from "@graphite/components/floating-menus/MenuList.svelte";
+	import FloatingMenu from "@graphite/components/layout/FloatingMenu.svelte";
 	import LayoutCol from "@graphite/components/layout/LayoutCol.svelte";
 	import LayoutRow from "@graphite/components/layout/LayoutRow.svelte";
 	import Graph from "@graphite/components/views/Graph.svelte";
@@ -94,6 +96,17 @@
 	$: canvasWidthScaledRoundedToEven = canvasWidthScaled && (canvasWidthScaled % 2 === 1 ? canvasWidthScaled + 1 : canvasWidthScaled);
 	$: canvasHeightScaledRoundedToEven = canvasHeightScaled && (canvasHeightScaled % 2 === 1 ? canvasHeightScaled + 1 : canvasHeightScaled);
 
+	// Menu shown when an SVG is dropped on to the canvas
+	let svgDropMenu: { open: boolean; x: number; y: number; name: string; svg: string } = { open: false, x: 0, y: 0, name: "", svg: "" };
+
+	function importSvgAsNewDocument(name: string, svg: string) {
+		const handleWithImport = editor.handle as unknown as { importSvgAsNewDocument?: (name: string | undefined, svg: string) => void };
+		handleWithImport.importSvgAsNewDocument?.(name, svg);
+	}
+	function importSvgAsLayerAt(x: number, y: number, name: string, svg: string) {
+		editor.handle.pasteSvg(name, svg, x, y);
+	}
+
 	$: toolShelfTotalToolsAndSeparators = ((layoutGroup) => {
 		if (!isWidgetSpanRow(layoutGroup)) return undefined;
 
@@ -141,7 +154,13 @@
 
 			if (file.type.includes("svg")) {
 				const svgData = await file.text();
-				editor.handle.pasteSvg(file.name, svgData, x, y);
+				// Menu shown at drop location
+				if (typeof x === "number" && typeof y === "number") {
+					svgDropMenu = { open: true, x, y, name: file.name, svg: svgData };
+				} else {
+					//Paste normally
+					editor.handle.pasteSvg(file.name, svgData, x, y);
+				}
 				return;
 			}
 
@@ -597,6 +616,34 @@
 	</LayoutRow>
 </LayoutCol>
 
+{#if svgDropMenu.open}
+	<FloatingMenu open={true} type="Cursor" class="svg-drop-menu" styles={{ left: svgDropMenu.x + "px", top: svgDropMenu.y + "px" }}>
+		<MenuList
+			open={true}
+			entries={[
+				[
+					{
+						label: "Import as New Layer",
+						value: "layer",
+						action: () => {
+							importSvgAsLayerAt(svgDropMenu.x, svgDropMenu.y, svgDropMenu.name, svgDropMenu.svg);
+							svgDropMenu.open = false;
+						},
+					},
+					{
+						label: "Import as New Document",
+						value: "document",
+						action: () => {
+							importSvgAsNewDocument(svgDropMenu.name, svgDropMenu.svg);
+							svgDropMenu.open = false;
+						},
+					},
+				],
+			]}
+		/>
+	</FloatingMenu>
+{/if}
+
 <style lang="scss" global>
 	.document {
 		height: 100%;
diff --git a/frontend/src/components/window/workspace/Panel.svelte b/frontend/src/components/window/workspace/Panel.svelte
index 66247cbc65..e32d566849 100644
--- a/frontend/src/components/window/workspace/Panel.svelte
+++ b/frontend/src/components/window/workspace/Panel.svelte
@@ -50,6 +50,7 @@
 	export let styles: Record<string, string | number | undefined> = {};
 
 	let tabElements: (LayoutRow | undefined)[] = [];
+	let tabGroupElement: LayoutRow | undefined;
 
 	function platformModifiers(reservedKey: boolean): LayoutKeysGroup {
 		// TODO: Remove this by properly feeding these keys from a layout provided by the backend
@@ -93,6 +94,39 @@
 		});
 	}
 
+	// To handle dropping SVGs onto the empty tab space so that they open as a new document
+	function dropOnTabBar(e: DragEvent) {
+		const { dataTransfer } = e;
+		if (!dataTransfer) return;
+
+		// Determine if the pointer is over the empty area of the tab bar (to the right of the last tab)
+		const tabGroupDiv = tabGroupElement?.div?.();
+		if (!tabGroupDiv) return;
+
+		const groupBounds = tabGroupDiv.getBoundingClientRect();
+		const tabDivs = tabElements.map((t) => t?.div?.()).filter((el): el is HTMLDivElement => Boolean(el));
+		const lastTabRight = tabDivs.length ? tabDivs[tabDivs.length - 1]!.getBoundingClientRect().right : groupBounds.left;
+		const overEmptySpace = e.clientX > lastTabRight && e.clientX < groupBounds.right;
+
+		// If not over the empty part of the tab bar, ignore
+		if (!overEmptySpace) return;
+
+		e.preventDefault();
+
+		Array.from(dataTransfer.items).forEach(async (item) => {
+			const file = item.getAsFile();
+			if (!file) return;
+
+			if (file.type.includes("svg")) {
+				const svgData = await file.text();
+				// Call the API `importSvgAsNewDocument`
+				const handleWithImport = editor.handle as unknown as { importSvgAsNewDocument?: (name: string | undefined, svg: string) => void };
+				handleWithImport.importSvgAsNewDocument?.(file.name, svgData);
+				return;
+			}
+		});
+	}
+
 	export async function scrollTabIntoView(newIndex: number) {
 		await tick();
 		tabElements[newIndex]?.div?.()?.scrollIntoView();
@@ -100,8 +134,8 @@
 </script>
 
 <LayoutCol on:pointerdown={() => panelType && editor.handle.setActivePanel(panelType)} class={`panel ${className}`.trim()} {classes} style={styleName} {styles}>
-	<LayoutRow class="tab-bar" classes={{ "min-widths": tabMinWidths }}>
-		<LayoutRow class="tab-group" scrollableX={true}>
+	<LayoutRow class="tab-bar" classes={{ "min-widths": tabMinWidths }} on:dragover={(e) => e.preventDefault()} on:drop={dropOnTabBar}>
+		<LayoutRow class="tab-group" scrollableX={true} bind:this={tabGroupElement}>
 			{#each tabLabels as tabLabel, tabIndex}
 				<LayoutRow
 					class="tab"
diff --git a/frontend/wasm/src/editor_api.rs b/frontend/wasm/src/editor_api.rs
index b46b27f6ac..d5e94209ae 100644
--- a/frontend/wasm/src/editor_api.rs
+++ b/frontend/wasm/src/editor_api.rs
@@ -889,6 +889,12 @@ impl EditorHandle {
 		self.dispatch(message);
 	}
 
+	/// Import an SVG as a new document directly (used for dropping on tab bar empty area or choosing the menu option)
+	#[wasm_bindgen(js_name = importSvgAsNewDocument)]
+	pub fn import_svg_as_new_document(&self, name: Option<String>, svg: String) {
+		self.dispatch(PortfolioMessage::ImportSvgAsNewDocument { name, svg });
+	}
+
 	/// Toggle visibility of a layer or node given its node ID
 	#[wasm_bindgen(js_name = toggleNodeVisibilityLayerPanel)]
 	pub fn toggle_node_visibility_layer(&self, id: u64) {