diff --git a/netbox/project-static/dist/netbox.css b/netbox/project-static/dist/netbox.css
index 1ba025227..8c28a6c30 100644
Binary files a/netbox/project-static/dist/netbox.css and b/netbox/project-static/dist/netbox.css differ
diff --git a/netbox/project-static/styles/transitional/_navigation.scss b/netbox/project-static/styles/transitional/_navigation.scss
index e676d7c98..0d2571cfc 100644
--- a/netbox/project-static/styles/transitional/_navigation.scss
+++ b/netbox/project-static/styles/transitional/_navigation.scss
@@ -3,10 +3,16 @@
   .navbar-collapse {
     .dropdown-menu {
       .dropdown-item {
+        a {
+          color: inherit;
+        }
 
-        // Remove underline from nav menu items
-        a:hover {
-          text-decoration: none;
+        // Adjust hover color & style for menu items
+        &:hover {
+          background-color: $gray-700;
+          a {
+            text-decoration: none;
+          }
         }
 
         // Style active menu item
diff --git a/netbox/utilities/templates/navigation/menu.html b/netbox/utilities/templates/navigation/menu.html
index 776006443..18be3c717 100644
--- a/netbox/utilities/templates/navigation/menu.html
+++ b/netbox/utilities/templates/navigation/menu.html
@@ -19,12 +19,12 @@
         <div class="dropdown-menu-columns">
           <div class="dropdown-menu-column pb-2">
             {% for group, items in groups %}
-              <div class="dropdown-item text-uppercase fw-bold fs-5 ps-3 pt-3 pb-1">
+              <div class="text-uppercase fw-bold fs-5 ps-3 pt-3 pb-1">
                 {{ group.label }}
               </div>
               {% for item, buttons in items %}
-                <div class="dropdown-item d-flex justify-content-between ps-3 py-1">
-                  <a href="{% url item.link %}" class="d-inline-flex flex-fill">{{ item.link_text }}</a>
+                <div class="dropdown-item d-flex justify-content-between ps-3 py-0">
+                  <a href="{% url item.link %}" class="d-inline-flex flex-fill py-1">{{ item.link_text }}</a>
                   {% if buttons %}
                     <div class="btn-group ms-1">
                       {% for button in buttons %}