diff --git a/Cargo.toml b/Cargo.toml
index 60a4552..bedd9b4 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -17,13 +17,18 @@ bevy_app = { version = "0.14", default-features = false }
 bevy_core = { version = "0.14", default-features = false }
 bevy_ecs = { version = "0.14", default-features = false }
 bevy_hierarchy = { version = "0.14", default-features = false }
+bevy_math = { version = "0.14", default-features = false }
 bevy_reflect = { version = "0.14", optional = true, default-features = false }
 bevy_render = { version = "0.14", default-features = false }
 bevy_sprite = { version = "0.14", default-features = false }
 bevy_text = { version = "0.14", default-features = false }
+bevy_time = { version = "0.14", default-features = false }
+bevy_transform = { version = "0.14", default-features = false }
 bevy_ui = { version = "0.14", default-features = false, features = [
     "bevy_text",
 ] }
+bevy_window = { version = "0.14", default-features = false }
+tiny_bail = "0.1"
 
 [lints.rust]
 missing_docs = "deny"
diff --git a/src/lib.rs b/src/lib.rs
index e46e084..446f254 100644
--- a/src/lib.rs
+++ b/src/lib.rs
@@ -1,27 +1,39 @@
 //! TODO
 
-use core::f32;
-
-use bevy_app::Plugin;
+use bevy_app::{Plugin, PreUpdate};
 use bevy_core::Name;
 #[cfg(feature = "bevy_reflect")]
 use bevy_ecs::reflect::{ReflectComponent, ReflectResource};
-use bevy_ecs::{component::Component, entity::Entity, system::Resource, world::World};
+use bevy_ecs::{
+    component::Component,
+    entity::Entity,
+    query::With,
+    system::{Query, Res, ResMut, Resource},
+    world::World,
+};
 use bevy_hierarchy::BuildWorldChildren as _;
-use bevy_render::view::Visibility;
+use bevy_math::Vec2;
+use bevy_render::{
+    camera::{Camera, RenderTarget},
+    view::Visibility,
+};
 use bevy_sprite::Anchor;
 use bevy_text::{Text, TextSection, TextStyle};
+use bevy_time::Time;
+use bevy_transform::components::GlobalTransform;
 use bevy_ui::{
     node_bundles::{NodeBundle, TextBundle},
-    PositionType, Style, UiRect, Val, ZIndex,
+    Interaction, PositionType, Style, UiRect, UiStack, Val, ZIndex,
 };
+use bevy_window::{PrimaryWindow, Window, WindowRef};
+use tiny_bail::prelude::*;
 
 /// TODO
 #[derive(Default)]
 pub struct TooltipPlugin {
-    /// TODO
+    /// Set a custom entity for [`PrimaryTooltip::container`], or spawn a default entity if `None`.
     pub container_entity: Option<Entity>,
-    /// TODO
+    /// Set a custom entity for [`PrimaryTooltip::text`], or spawn a default entity if `None`.
     pub text_entity: Option<Entity>,
 }
 
@@ -32,12 +44,17 @@ impl Plugin for TooltipPlugin {
             PrimaryTooltip::new(app.world_mut(), self.container_entity, self.text_entity);
         app.insert_resource(primary_tooltip);
 
+        app.register_type::<TooltipContext>();
+        app.init_resource::<TooltipContext>();
+        // TODO: Make sure this runs after `Interaction` is updated.
+        app.add_systems(PreUpdate, update_tooltip_context);
+
         app.register_type::<Tooltip>();
     }
 }
 
 /// TODO
-#[derive(Resource)]
+#[derive(Resource, Copy, Clone, Debug)]
 #[cfg_attr(
     feature = "bevy_reflect",
     derive(bevy_reflect::Reflect),
@@ -82,6 +99,110 @@ impl PrimaryTooltip {
     }
 }
 
+fn update_tooltip_context(
+    mut ctx: ResMut<TooltipContext>,
+    time: Res<Time>,
+    ui_stack: Res<UiStack>,
+    primary_window_query: Query<Entity, With<PrimaryWindow>>,
+    window_query: Query<&Window>,
+    camera_query: Query<(&Camera, &GlobalTransform)>,
+    interaction_query: Query<(&Tooltip, &Interaction)>,
+) {
+    // TODO: Is this needed? Send an event? Show / hide the tooltip?
+    let _old_state = ctx.state;
+
+    // Detect cursor movement.
+    for (camera, camera_gt) in &camera_query {
+        let RenderTarget::Window(window) = camera.target else {
+            continue;
+        };
+        let window = match window {
+            WindowRef::Primary => cq!(primary_window_query.get_single()),
+            WindowRef::Entity(id) => id,
+        };
+        let window = c!(window_query.get(window));
+        cq!(window.focused);
+        let cursor_pos = c!(window
+            .cursor_position()
+            .and_then(|cursor| camera.viewport_to_world_2d(camera_gt, cursor)));
+
+        // Reset activation delay on cursor move.
+        if ctx.cursor_pos != cursor_pos
+            && matches!(ctx.state, TooltipState::Delayed)
+            && ctx.activation.reset_delay_on_cursor_move
+        {
+            ctx.timer = ctx.activation.delay;
+        }
+
+        // Dismiss tooltip if cursor has left the activation radius.
+        if matches!(ctx.state, TooltipState::Active)
+            && ctx.cursor_pos.distance_squared(cursor_pos) > ctx.activation.radius
+        {
+            ctx.state = TooltipState::Dismissed;
+        }
+
+        // Update cursor position.
+        if !matches!(ctx.state, TooltipState::Active) {
+            ctx.cursor_pos = cursor_pos;
+        }
+
+        break;
+    }
+
+    // Tick timer for transfer timeout / activation delay.
+    if matches!(ctx.state, TooltipState::Inactive | TooltipState::Delayed) {
+        ctx.timer = ctx.timer.saturating_sub(time.delta().as_millis() as u16);
+        if matches!(ctx.state, TooltipState::Delayed) && ctx.timer == 0 {
+            ctx.state = TooltipState::Active;
+        }
+    }
+
+    // Find the highest entity in the `UiStack` that has a tooltip and is being interacted with.
+    for &entity in ui_stack.uinodes.iter().rev() {
+        let (tooltip, interaction) = cq!(interaction_query.get(entity));
+        match interaction {
+            Interaction::Pressed => {
+                ctx.target = entity;
+                ctx.state = TooltipState::Dismissed;
+                ctx.transfer = tooltip.transfer;
+                return;
+            }
+            Interaction::Hovered => (),
+            Interaction::None => continue,
+        };
+        r!(matches!(ctx.state, TooltipState::Inactive) || ctx.target != entity);
+
+        // Switch to the new target entity.
+        ctx.target = entity;
+        ctx.state = if tooltip.activation.delay == 0
+            || (matches!(ctx.state, TooltipState::Inactive)
+                && ctx.timer > 0
+                && ctx.transfer.layer >= tooltip.transfer.layer
+                && (matches!((ctx.transfer.group, tooltip.transfer.group), (Some(x), Some(y)) if x == y)
+                    || ctx.target == entity))
+        {
+            TooltipState::Active
+        } else {
+            TooltipState::Delayed
+        };
+        ctx.timer = tooltip.activation.delay;
+        ctx.activation = tooltip.activation;
+        ctx.transfer = tooltip.transfer;
+
+        return;
+    }
+
+    // There is no target entity.
+    if !matches!(ctx.state, TooltipState::Inactive) {
+        ctx.state = TooltipState::Inactive;
+        ctx.timer = if matches!(ctx.state, TooltipState::Active) || !ctx.transfer.from_active {
+            ctx.transfer.timeout
+        } else {
+            0
+        };
+    }
+}
+
 // TODO: Animation, wedge (like a speech bubble), easier content customization / icons.
 /// TODO
 #[derive(Component)]
@@ -152,14 +273,64 @@ impl Tooltip {
 }
 
 /// TODO
+#[derive(Resource, Clone, Debug)]
+#[cfg_attr(
+    feature = "bevy_reflect",
+    derive(bevy_reflect::Reflect),
+    reflect(Resource)
+)]
+struct TooltipContext {
+    /// The current state of the tooltip system.
+    state: TooltipState,
+    /// The current or previous target entity being interacted with.
+    target: Entity,
+    /// The remaining duration of the current activation delay or transfer timeout (in milliseconds).
+    timer: u16,
+    /// The current activation conditions.
+    activation: TooltipActivation,
+    /// The current transfer conditions.
+    transfer: TooltipTransfer,
+    /// The current cursor position or activation point.
+    cursor_pos: Vec2,
+}
+
+impl Default for TooltipContext {
+    fn default() -> Self {
+        Self {
+            state: TooltipState::Inactive,
+            target: Entity::PLACEHOLDER,
+            timer: 0,
+            activation: TooltipActivation::DEFAULT,
+            transfer: TooltipTransfer::DEFAULT,
+            cursor_pos: Vec2::ZERO,
+        }
+    }
+}
+
+/// TODO
+#[derive(Copy, Clone, Debug)]
+#[cfg_attr(feature = "bevy_reflect", derive(bevy_reflect::Reflect))]
+enum TooltipState {
+    /// There is no target entity being interacted with, and no active tooltip.
+    Inactive,
+    /// A target entity is being hovered, but its tooltip is not active yet.
+    Delayed,
+    /// A target entity is being hovered, and its tooltip is active.
+    Active,
+    /// A target entity is being interacted with, but its tooltip has been dismissed.
+    Dismissed,
+}
+
+/// TODO
+#[derive(Copy, Clone, Debug)]
 #[cfg_attr(feature = "bevy_reflect", derive(bevy_reflect::Reflect))]
 pub struct TooltipActivation {
     /// The hover duration before the tooltip will activate (in milliseconds).
     pub delay: u16,
     /// Whether to reset the activation delay timer whenever the cursor moves.
     pub reset_delay_on_cursor_move: bool,
-    /// The cursor distance from the activation point beyond which the tooltip will be dismissed.
-    pub dismiss_distance: f32,
+    /// The radius around the activation point beyond which the tooltip will be dismissed.
+    pub radius: f32,
 }
 
 impl TooltipActivation {
@@ -167,7 +338,7 @@ impl TooltipActivation {
     pub const DEFAULT: Self = Self {
         delay: 100,
         reset_delay_on_cursor_move: false,
-        dismiss_distance: f32::INFINITY,
+        radius: f32::INFINITY,
     };
 }
 
@@ -178,14 +349,15 @@ impl Default for TooltipActivation {
 }
 
 /// TODO
+#[derive(Copy, Clone, Debug)]
 #[cfg_attr(feature = "bevy_reflect", derive(bevy_reflect::Reflect))]
 pub struct TooltipTransfer {
     /// Only transfer to elements in the same group, or to self if `None`.
     pub group: Option<i8>,
     /// Only transfer to elements in the same layer or lower.
     pub layer: i8,
-    /// Only transfer within this duration after the cursor moves away from the old target (in milliseconds), or forever if `None`.
-    pub timeout: Option<u16>,
+    /// Only transfer within this duration after the cursor moves away from the old target (in milliseconds).
+    pub timeout: u16,
     /// Only transfer if the old tooltip was active.
     pub from_active: bool,
 }
@@ -195,7 +367,7 @@ impl TooltipTransfer {
     pub const DEFAULT: Self = Self {
         group: None,
         layer: 0,
-        timeout: Some(0),
+        timeout: 0,
         from_active: true,
     };
 }
@@ -207,6 +379,7 @@ impl Default for TooltipTransfer {
 }
 
 /// TODO
+#[derive(Copy, Clone, Debug)]
 #[cfg_attr(feature = "bevy_reflect", derive(bevy_reflect::Reflect))]
 pub struct TooltipPlacement {
     /// The anchor point on the tooltip entity.
@@ -239,9 +412,10 @@ impl Default for TooltipPlacement {
 }
 
 /// TODO
+#[derive(Clone, Debug)]
 #[cfg_attr(feature = "bevy_reflect", derive(bevy_reflect::Reflect))]
 pub enum TooltipEntity {
-    /// Use the primary tooltip entity with custom text.
+    /// Use the primary tooltip entity with custom [`Text`].
     Primary(Text),
     /// Use a fully custom entity as the tooltip.
     Custom(Entity),