diff --git a/example/src/Basic/index.tsx b/example/src/Basic/index.tsx
index 7f91818d..74d0f69b 100644
--- a/example/src/Basic/index.tsx
+++ b/example/src/Basic/index.tsx
@@ -9,6 +9,7 @@ import ReactFlow, {
   useReactFlow,
 } from 'react-flow-renderer';
 
+const onNodeDrag = (_: MouseEvent, node: Node) => console.log('drag', node);
 const onNodeDragStop = (_: MouseEvent, node: Node) => console.log('drag stop', node);
 const onNodeClick = (_: MouseEvent, node: Node) => console.log('click', node);
 
@@ -61,6 +62,7 @@ const BasicFlow = () => {
       defaultEdges={initialEdges}
       onNodeClick={onNodeClick}
       onNodeDragStop={onNodeDragStop}
+      onNodeDrag={onNodeDrag}
       className="react-flow-basic-example"
       minZoom={0.2}
       maxZoom={4}
diff --git a/example/src/SaveRestore/Controls.tsx b/example/src/SaveRestore/Controls.tsx
index 4c4537c7..c26d55d2 100644
--- a/example/src/SaveRestore/Controls.tsx
+++ b/example/src/SaveRestore/Controls.tsx
@@ -1,5 +1,5 @@
 import React, { memo, useCallback, Dispatch, FC } from 'react';
-import { useReactFlow, ReactFlowInstance, Edge, Node, ReactFlowJsonObject } from 'react-flow-renderer';
+import { useReactFlow, Edge, Node, ReactFlowJsonObject } from 'react-flow-renderer';
 import localforage from 'localforage';
 
 localforage.config({
@@ -12,20 +12,17 @@ const flowKey = 'example-flow';
 const getNodeId = () => `randomnode_${+new Date()}`;
 
 type ControlsProps = {
-  rfInstance?: ReactFlowInstance;
   setNodes: Dispatch<React.SetStateAction<Node<any>[]>>;
   setEdges: Dispatch<React.SetStateAction<Edge<any>[]>>;
 };
 
-const Controls: FC<ControlsProps> = ({ rfInstance, setNodes, setEdges }) => {
-  const { setViewport } = useReactFlow();
+const Controls: FC<ControlsProps> = ({ setNodes, setEdges }) => {
+  const { setViewport, toObject } = useReactFlow();
 
   const onSave = useCallback(() => {
-    if (rfInstance) {
-      const flow = rfInstance.toObject();
-      localforage.setItem(flowKey, flow);
-    }
-  }, [rfInstance]);
+    const flow = toObject();
+    localforage.setItem(flowKey, flow);
+  }, [toObject]);
 
   const onRestore = useCallback(() => {
     const restoreFlow = async () => {
@@ -33,6 +30,7 @@ const Controls: FC<ControlsProps> = ({ rfInstance, setNodes, setEdges }) => {
 
       if (flow) {
         const { x, y, zoom } = flow.viewport;
+
         setNodes(flow.nodes || []);
         setEdges(flow.edges || []);
         setViewport({ x, y, zoom: zoom || 0 });
diff --git a/example/src/SaveRestore/index.tsx b/example/src/SaveRestore/index.tsx
index c0aacccb..a28f2f4a 100644
--- a/example/src/SaveRestore/index.tsx
+++ b/example/src/SaveRestore/index.tsx
@@ -1,11 +1,10 @@
-import { useState } from 'react';
+import { useCallback } from 'react';
 import ReactFlow, {
   ReactFlowProvider,
   Node,
   addEdge,
   Connection,
   Edge,
-  ReactFlowInstance,
   useNodesState,
   useEdgesState,
 } from 'react-flow-renderer';
@@ -22,10 +21,9 @@ const initialNodes: Node[] = [
 const initialEdges: Edge[] = [{ id: 'e1-2', source: '1', target: '2' }];
 
 const SaveRestore = () => {
-  const [rfInstance, setRfInstance] = useState<ReactFlowInstance>();
   const [nodes, setNodes, onNodesChange] = useNodesState(initialNodes);
   const [edges, setEdges, onEdgesChange] = useEdgesState(initialEdges);
-  const onConnect = (params: Connection | Edge) => setEdges((eds) => addEdge(params, eds));
+  const onConnect = useCallback((params: Connection | Edge) => setEdges((eds) => addEdge(params, eds)), [setEdges]);
 
   return (
     <ReactFlowProvider>
@@ -35,9 +33,8 @@ const SaveRestore = () => {
         onNodesChange={onNodesChange}
         onEdgesChange={onEdgesChange}
         onConnect={onConnect}
-        onInit={setRfInstance}
       >
-        <Controls rfInstance={rfInstance} setNodes={setNodes} setEdges={setEdges} />
+        <Controls setNodes={setNodes} setEdges={setEdges} />
       </ReactFlow>
     </ReactFlowProvider>
   );
diff --git a/example/src/Subflow/DebugNode.tsx b/example/src/Subflow/DebugNode.tsx
index f7cc4b36..e73631a0 100644
--- a/example/src/Subflow/DebugNode.tsx
+++ b/example/src/Subflow/DebugNode.tsx
@@ -11,7 +11,7 @@ const idStyle: CSSProperties = {
   left: 2,
 };
 
-const ColorSelectorNode: FC<NodeProps> = ({ zIndex, xPos, yPos, id }) => {
+const DebugNode: FC<NodeProps> = ({ zIndex, xPos, yPos, id }) => {
   return (
     <>
       <Handle type="target" position={Position.Top} />
@@ -24,4 +24,4 @@ const ColorSelectorNode: FC<NodeProps> = ({ zIndex, xPos, yPos, id }) => {
   );
 };
 
-export default memo(ColorSelectorNode);
+export default memo(DebugNode);
diff --git a/example/src/Subflow/index.tsx b/example/src/Subflow/index.tsx
index 1d7c79d2..6b6c4799 100644
--- a/example/src/Subflow/index.tsx
+++ b/example/src/Subflow/index.tsx
@@ -15,6 +15,7 @@ import ReactFlow, {
 } from 'react-flow-renderer';
 import DebugNode from './DebugNode';
 
+const onNodeDrag = (_: MouseEvent, node: Node, nodes: Node[]) => console.log('drag', node, nodes);
 const onNodeDragStop = (_: MouseEvent, node: Node, nodes: Node[]) => console.log('drag stop', node, nodes);
 const onNodeClick = (_: MouseEvent, node: Node) => console.log('click', node);
 const onEdgeClick = (_: MouseEvent, edge: Edge) => console.log('click', edge);
@@ -82,6 +83,7 @@ const initialNodes: Node[] = [
     position: { x: 25, y: 50 },
     className: 'light',
     parentNode: '5',
+    extent: 'parent',
   },
   {
     id: '5b',
@@ -167,6 +169,7 @@ const Subflow = () => {
       onNodeClick={onNodeClick}
       onEdgeClick={onEdgeClick}
       onConnect={onConnect}
+      onNodeDrag={onNodeDrag}
       onNodeDragStop={onNodeDragStop}
       className="react-flow-basic-example"
       defaultZoom={1.5}
diff --git a/src/components/Handle/handler.ts b/src/components/Handle/handler.ts
index 54a843fc..9c908ece 100644
--- a/src/components/Handle/handler.ts
+++ b/src/components/Handle/handler.ts
@@ -46,6 +46,24 @@ export function checkElementBelowIsValid(
   if (elementBelow && (elementBelowIsTarget || elementBelowIsSource)) {
     result.isHoveringHandle = true;
 
+    const elementBelowNodeId = elementBelow.getAttribute('data-nodeid');
+    const elementBelowHandleId = elementBelow.getAttribute('data-handleid');
+    const connection: Connection = isTarget
+      ? {
+          source: elementBelowNodeId,
+          sourceHandle: elementBelowHandleId,
+          target: nodeId,
+          targetHandle: handleId,
+        }
+      : {
+          source: nodeId,
+          sourceHandle: handleId,
+          target: elementBelowNodeId,
+          targetHandle: elementBelowHandleId,
+        };
+
+    result.connection = connection;
+
     // in strict mode we don't allow target to target or source to source connections
     const isValid =
       connectionMode === ConnectionMode.Strict
@@ -53,23 +71,6 @@ export function checkElementBelowIsValid(
         : true;
 
     if (isValid) {
-      const elementBelowNodeId = elementBelow.getAttribute('data-nodeid');
-      const elementBelowHandleId = elementBelow.getAttribute('data-handleid');
-      const connection: Connection = isTarget
-        ? {
-            source: elementBelowNodeId,
-            sourceHandle: elementBelowHandleId,
-            target: nodeId,
-            targetHandle: handleId,
-          }
-        : {
-            source: nodeId,
-            sourceHandle: handleId,
-            target: elementBelowNodeId,
-            targetHandle: elementBelowHandleId,
-          };
-
-      result.connection = connection;
       result.isValid = isValidConnection(connection);
     }
   }
@@ -151,9 +152,7 @@ export function handleMouseDown(
       return resetRecentHandle(recentHoveredHandle);
     }
 
-    const isOwnHandle = connection.source === connection.target;
-
-    if (!isOwnHandle && elementBelow) {
+    if (connection.source !== connection.target && elementBelow) {
       recentHoveredHandle = elementBelow;
       elementBelow.classList.add('react-flow__handle-connecting');
       elementBelow.classList.toggle('react-flow__handle-valid', isValid);
diff --git a/src/components/Nodes/utils.ts b/src/components/Nodes/utils.ts
index 2b9b5137..a3d1a28f 100644
--- a/src/components/Nodes/utils.ts
+++ b/src/components/Nodes/utils.ts
@@ -4,21 +4,17 @@ import { GetState, SetState } from 'zustand';
 import { HandleElement, Node, Position, ReactFlowState } from '../../types';
 import { getDimensions } from '../../utils';
 
-export const getHandleBounds = (nodeElement: HTMLDivElement, scale: number) => {
-  const bounds = nodeElement.getBoundingClientRect();
+function getTranslateValues(domNode: HTMLDivElement): [number, number] {
+  if (typeof window === 'undefined' || !window.DOMMatrixReadOnly) {
+    return [0, 0];
+  }
 
-  return {
-    source: getHandleBoundsByHandleType('.source', nodeElement, bounds, scale),
-    target: getHandleBoundsByHandleType('.target', nodeElement, bounds, scale),
-  };
-};
+  const style = window.getComputedStyle(domNode);
+  const { m41, m42 } = new window.DOMMatrixReadOnly(style.transform);
+  return [m41, m42];
+}
 
-export const getHandleBoundsByHandleType = (
-  selector: string,
-  nodeElement: HTMLDivElement,
-  parentBounds: DOMRect,
-  k: number
-): HandleElement[] | null => {
+export const getHandleBounds = (selector: string, nodeElement: HTMLDivElement): HandleElement[] | null => {
   const handles = nodeElement.querySelectorAll(selector);
 
   if (!handles || !handles.length) {
@@ -28,17 +24,16 @@ export const getHandleBoundsByHandleType = (
   const handlesArray = Array.from(handles) as HTMLDivElement[];
 
   return handlesArray.map((handle): HandleElement => {
-    const bounds = handle.getBoundingClientRect();
-    const dimensions = getDimensions(handle);
-    const handleId = handle.getAttribute('data-handleid');
-    const handlePosition = handle.getAttribute('data-handlepos') as unknown as Position;
+    // we don't use getBoundingClientRect here, because it includes the transform of the parent (scaled viewport)
+    // that we would then need to calculate out again in order to get the correct position.
+    const [translateX, translateY] = getTranslateValues(handle);
 
     return {
-      id: handleId,
-      position: handlePosition,
-      x: (bounds.left - parentBounds.left) / k,
-      y: (bounds.top - parentBounds.top) / k,
-      ...dimensions,
+      id: handle.getAttribute('data-handleid'),
+      position: handle.getAttribute('data-handlepos') as unknown as Position,
+      x: handle.offsetLeft + nodeElement.clientLeft + translateX,
+      y: handle.offsetTop + nodeElement.clientTop + translateY,
+      ...getDimensions(handle),
     };
   });
 };
diff --git a/src/container/ZoomPane/index.tsx b/src/container/ZoomPane/index.tsx
index 57a1c8a5..69ad08b4 100644
--- a/src/container/ZoomPane/index.tsx
+++ b/src/container/ZoomPane/index.tsx
@@ -54,6 +54,7 @@ const ZoomPane = ({
   noPanClassName,
 }: ZoomPaneProps) => {
   const store = useStoreApi();
+  const isZoomingOrPanning = useRef(false);
   const zoomPane = useRef<HTMLDivElement>(null);
   const prevTransform = useRef<Viewport>({ x: 0, y: 0, zoom: 0 });
   const { d3Zoom, d3Selection, d3ZoomHandler } = useStore(selector, shallow);
@@ -146,12 +147,11 @@ const ZoomPane = ({
 
   useEffect(() => {
     if (d3Zoom) {
-      if (selectionKeyPressed) {
+      if (selectionKeyPressed && !isZoomingOrPanning.current) {
         d3Zoom.on('zoom', null);
-      } else {
+      } else if (!selectionKeyPressed) {
         d3Zoom.on('zoom', (event: D3ZoomEvent<HTMLDivElement, any>) => {
           store.setState({ transform: [event.transform.x, event.transform.y, event.transform.k] });
-
           if (onMove) {
             const flowTransform = eventToFlowTransform(event.transform);
             onMove(event.sourceEvent as MouseEvent | TouchEvent, flowTransform);
@@ -163,33 +163,31 @@ const ZoomPane = ({
 
   useEffect(() => {
     if (d3Zoom) {
-      if (onMoveStart) {
-        d3Zoom.on('start', (event: D3ZoomEvent<HTMLDivElement, any>) => {
+      d3Zoom.on('start', (event: D3ZoomEvent<HTMLDivElement, any>) => {
+        isZoomingOrPanning.current = true;
+
+        if (onMoveStart) {
           const flowTransform = eventToFlowTransform(event.transform);
           prevTransform.current = flowTransform;
 
           onMoveStart(event.sourceEvent as MouseEvent | TouchEvent, flowTransform);
-        });
-      } else {
-        d3Zoom.on('start', null);
-      }
+        }
+      });
     }
   }, [d3Zoom, onMoveStart]);
 
   useEffect(() => {
     if (d3Zoom) {
-      if (onMoveEnd) {
-        d3Zoom.on('end', (event: D3ZoomEvent<HTMLDivElement, any>) => {
-          if (viewChanged(prevTransform.current, event.transform)) {
-            const flowTransform = eventToFlowTransform(event.transform);
-            prevTransform.current = flowTransform;
+      d3Zoom.on('end', (event: D3ZoomEvent<HTMLDivElement, any>) => {
+        isZoomingOrPanning.current = false;
 
-            onMoveEnd(event.sourceEvent as MouseEvent | TouchEvent, flowTransform);
-          }
-        });
-      } else {
-        d3Zoom.on('end', null);
-      }
+        if (onMoveEnd && viewChanged(prevTransform.current, event.transform)) {
+          const flowTransform = eventToFlowTransform(event.transform);
+          prevTransform.current = flowTransform;
+
+          onMoveEnd(event.sourceEvent as MouseEvent | TouchEvent, flowTransform);
+        }
+      });
     }
   }, [d3Zoom, onMoveEnd]);
 
diff --git a/src/hooks/useDrag/index.ts b/src/hooks/useDrag/index.ts
index 15d365f8..b14ad14d 100644
--- a/src/hooks/useDrag/index.ts
+++ b/src/hooks/useDrag/index.ts
@@ -77,6 +77,7 @@ function useDrag({
             }
 
             const pointerPos = getPointerPosition(event);
+            lastPos.current = pointerPos;
             dragItems.current = getDragItems(nodeInternals, pointerPos, nodeId);
 
             if (onStart && dragItems.current) {
diff --git a/src/hooks/useDrag/utils.ts b/src/hooks/useDrag/utils.ts
index cd0e0c41..9679a5c7 100644
--- a/src/hooks/useDrag/utils.ts
+++ b/src/hooks/useDrag/utils.ts
@@ -39,7 +39,8 @@ export function getDragItems(nodeInternals: NodeInternals, mousePos: XYPosition,
     .filter((n) => (n.selected || n.id === nodeId) && (!n.parentNode || !isParentSelected(n, nodeInternals)))
     .map((n) => ({
       id: n.id,
-      position: n.positionAbsolute || { x: 0, y: 0 },
+      position: n.position || { x: 0, y: 0 },
+      positionAbsolute: n.positionAbsolute || { x: 0, y: 0 },
       distance: {
         x: mousePos.x - (n.positionAbsolute?.x ?? 0),
         y: mousePos.y - (n.positionAbsolute?.y ?? 0),
@@ -94,14 +95,28 @@ export function updatePosition(
     ];
   }
 
-  dragItem.position = currentExtent ? clampPosition(nextPosition, currentExtent as CoordinateExtent) : nextPosition;
+  let parentPosition = { x: 0, y: 0 };
+
+  if (dragItem.parentNode) {
+    const parentNode = nodeInternals.get(dragItem.parentNode);
+    parentPosition = { x: parentNode?.positionAbsolute?.x ?? 0, y: parentNode?.positionAbsolute?.y ?? 0 };
+  }
+
+  dragItem.positionAbsolute = currentExtent
+    ? clampPosition(nextPosition, currentExtent as CoordinateExtent)
+    : nextPosition;
+
+  dragItem.position = {
+    x: dragItem.positionAbsolute.x - parentPosition.x,
+    y: dragItem.positionAbsolute.y - parentPosition.y,
+  };
 
   return dragItem;
 }
 
 // returns two params:
 // 1. the dragged node (or the first of the list, if we are dragging a node selection)
-// 2. array of selected nodes (handy when multi selection is active)
+// 2. array of selected nodes (for multi selections)
 export function getEventHandlerParams({
   nodeId,
   dragItems,
@@ -116,6 +131,8 @@ export function getEventHandlerParams({
 
     return {
       ...node,
+      position: n.position,
+      positionAbsolute: n.positionAbsolute,
     };
   });
 
diff --git a/src/hooks/useViewportHelper.ts b/src/hooks/useViewportHelper.ts
index aeaabe61..10e21193 100644
--- a/src/hooks/useViewportHelper.ts
+++ b/src/hooks/useViewportHelper.ts
@@ -38,12 +38,12 @@ const useViewportHelper = (): ViewportHelperFunctions => {
         zoomIn: (options) => d3Zoom.scaleBy(getD3Transition(d3Selection, options?.duration), 1.2),
         zoomOut: (options) => d3Zoom.scaleBy(getD3Transition(d3Selection, options?.duration), 1 / 1.2),
         zoomTo: (zoomLevel, options) => d3Zoom.scaleTo(getD3Transition(d3Selection, options?.duration), zoomLevel),
-        getZoom: () => {
-          const [, , zoom] = store.getState().transform;
-          return zoom;
-        },
+        getZoom: () => store.getState().transform[2],
         setViewport: (transform, options) => {
-          const nextTransform = zoomIdentity.translate(transform.x, transform.y).scale(transform.zoom);
+          const [x, y, zoom] = store.getState().transform;
+          const nextTransform = zoomIdentity
+            .translate(transform.x ?? x, transform.y ?? y)
+            .scale(transform.zoom ?? zoom);
           d3Zoom.transform(getD3Transition(d3Selection, options?.duration), nextTransform);
         },
         getViewport: () => {
diff --git a/src/store/index.ts b/src/store/index.ts
index ccfdfecd..f67dde4b 100644
--- a/src/store/index.ts
+++ b/src/store/index.ts
@@ -43,7 +43,7 @@ const createStore = () =>
       set({ nodeInternals, edges: nextEdges, hasDefaultNodes, hasDefaultEdges });
     },
     updateNodeDimensions: (updates: NodeDimensionUpdate[]) => {
-      const { onNodesChange, transform, nodeInternals, fitViewOnInit, fitViewOnInitDone, fitViewOnInitOptions } = get();
+      const { onNodesChange, nodeInternals, fitViewOnInit, fitViewOnInitDone, fitViewOnInitOptions } = get();
 
       const changes: NodeDimensionChange[] = updates.reduce<NodeDimensionChange[]>((res, update) => {
         const node = nodeInternals.get(update.id);
@@ -57,12 +57,14 @@ const createStore = () =>
           );
 
           if (doUpdate) {
-            const handleBounds = getHandleBounds(update.nodeElement, transform[2]);
             nodeInternals.set(node.id, {
               ...node,
               [internalsSymbol]: {
                 ...node[internalsSymbol],
-                handleBounds,
+                handleBounds: {
+                  source: getHandleBounds('.source', update.nodeElement),
+                  target: getHandleBounds('.target', update.nodeElement),
+                },
               },
               ...dimensions,
             });
@@ -99,16 +101,8 @@ const createStore = () =>
           };
 
           if (positionChanged) {
-            change.positionAbsolute = node.position;
+            change.positionAbsolute = node.positionAbsolute;
             change.position = node.position;
-
-            if (node.parentNode) {
-              const parentNode = nodeInternals.get(node.parentNode);
-              change.position = {
-                x: change.position.x - (parentNode?.positionAbsolute?.x ?? 0),
-                y: change.position.y - (parentNode?.positionAbsolute?.y ?? 0),
-              };
-            }
           }
 
           return change;
diff --git a/src/types/nodes.ts b/src/types/nodes.ts
index 0045ae34..31712102 100644
--- a/src/types/nodes.ts
+++ b/src/types/nodes.ts
@@ -110,8 +110,8 @@ export type NodeBounds = XYPosition & {
 
 export type NodeDragItem = {
   id: string;
-  // relative node position
   position: XYPosition;
+  positionAbsolute: XYPosition;
   // distance from the mouse cursor to the node when start dragging
   distance: XYPosition;
   width?: number | null;