diff --git a/lib/android/app/src/main/java/com/reactnativenavigation/views/touch/OverlayTouchDelegate.kt b/lib/android/app/src/main/java/com/reactnativenavigation/views/touch/OverlayTouchDelegate.kt
index 2c789aee30c..81e3b74c653 100644
--- a/lib/android/app/src/main/java/com/reactnativenavigation/views/touch/OverlayTouchDelegate.kt
+++ b/lib/android/app/src/main/java/com/reactnativenavigation/views/touch/OverlayTouchDelegate.kt
@@ -1,14 +1,21 @@
 package com.reactnativenavigation.views.touch
 
 import android.view.MotionEvent
+import android.view.View
+import android.view.ViewGroup
 import androidx.annotation.VisibleForTesting
+import com.facebook.react.views.debuggingoverlay.DebuggingOverlay
 import com.reactnativenavigation.options.params.Bool
 import com.reactnativenavigation.options.params.NullBool
 import com.reactnativenavigation.react.ReactView
 import com.reactnativenavigation.utils.coordinatesInsideView
 import com.reactnativenavigation.views.component.ComponentLayout
+import androidx.core.view.isVisible
 
-open class OverlayTouchDelegate(private val component: ComponentLayout, private val reactView: ReactView) {
+open class OverlayTouchDelegate(
+    private val component: ComponentLayout,
+    private val reactView: ReactView
+) {
     var interceptTouchOutside: Bool = NullBool()
 
     fun onInterceptTouchEvent(event: MotionEvent): Boolean {
@@ -19,8 +26,38 @@ open class OverlayTouchDelegate(private val component: ComponentLayout, private
     }
 
     @VisibleForTesting
-    open fun handleDown(event: MotionEvent) = when (event.coordinatesInsideView(reactView.getChildAt(0))) {
+    open fun handleDown(event: MotionEvent) = when (isInsideView(event)) {
         true -> component.superOnInterceptTouchEvent(event)
         false -> interceptTouchOutside.isFalse
     }
+
+    /**
+     * In new architecture, ReactView could have a DebugOverlay as a child that covers the entire screen.
+     * We need to check if the touch event is inside the actual React content. So we go over all children
+     * of the ReactView and check if the event is inside any of them except the DebugOverlay.
+     *
+     * Example of ReactView hierarchy:
+     * ```
+     * ReactView
+     * └── ReactSurfaceView
+     *     ├── ReactViewGroup
+     *     │   └── DebuggingOverlay (covers entire screen)
+     *     └── ReactViewGroup (the content we care about)
+     * ```
+     */
+    private fun isInsideView(event: MotionEvent): Boolean {
+        val reactViewSurface = this.reactView.getChildAt(0) as ViewGroup
+        for (i in 0 until reactViewSurface.childCount) {
+            val childItem = reactViewSurface.getChildAt(i)
+
+            if (!debuggingOverlay(childItem) && childItem.isVisible && event.coordinatesInsideView(childItem)) {
+                return true
+            }
+        }
+        return false
+    }
+
+    private fun debuggingOverlay(childItem: View?): Boolean =
+        childItem is ViewGroup && childItem.getChildAt(0) is DebuggingOverlay
+
 }
\ No newline at end of file
diff --git a/lib/android/app/src/test/java/com/reactnativenavigation/views/OverlayTouchDelegateTest.java b/lib/android/app/src/test/java/com/reactnativenavigation/views/OverlayTouchDelegateTest.java
index 8858f0a4561..80ba17d7ef0 100644
--- a/lib/android/app/src/test/java/com/reactnativenavigation/views/OverlayTouchDelegateTest.java
+++ b/lib/android/app/src/test/java/com/reactnativenavigation/views/OverlayTouchDelegateTest.java
@@ -1,7 +1,11 @@
 package com.reactnativenavigation.views;
 
+import android.graphics.Rect;
 import android.view.MotionEvent;
+import android.view.View;
+import android.view.ViewGroup;
 
+import com.facebook.react.views.debuggingoverlay.DebuggingOverlay;
 import com.reactnativenavigation.BaseTest;
 import com.reactnativenavigation.options.params.Bool;
 import com.reactnativenavigation.react.ReactView;
@@ -9,12 +13,16 @@
 import com.reactnativenavigation.views.touch.OverlayTouchDelegate;
 
 import org.junit.Test;
+import org.mockito.stubbing.Answer;
 
 import static org.assertj.core.api.Java6Assertions.assertThat;
+import static org.mockito.ArgumentMatchers.any;
+import static org.mockito.Mockito.doAnswer;
 import static org.mockito.Mockito.mock;
 import static org.mockito.Mockito.spy;
 import static org.mockito.Mockito.times;
 import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.when;
 
 public class OverlayTouchDelegateTest extends BaseTest {
     private OverlayTouchDelegate uut;
@@ -23,16 +31,60 @@ public class OverlayTouchDelegateTest extends BaseTest {
     private final MotionEvent downEvent = MotionEvent.obtain(0, 0, MotionEvent.ACTION_DOWN, x, y, 0);
     private final MotionEvent upEvent = MotionEvent.obtain(0, 0, MotionEvent.ACTION_UP, x, y, 0);
     private ComponentLayout component;
+    private ReactView reactView;
 
     @Override
     public void beforeEach() {
-        ReactView reactView = mock(ReactView.class);
+        reactView = mock(ReactView.class);
         component = mock(ComponentLayout.class);
         uut = spy(new OverlayTouchDelegate(component, reactView));
     }
 
+    private void mockHierarchyWithDebuggingOverlay() {
+        // Mock the hierarchy: ReactView -> ReactSurfaceView -> ReactViewGroup(s)
+        ViewGroup reactSurfaceView = mock(ViewGroup.class);
+        ViewGroup debuggingOverlayContainer = mock(ViewGroup.class);
+        ViewGroup contentViewGroup = mock(ViewGroup.class);
+        DebuggingOverlay debuggingOverlay = mock(DebuggingOverlay.class);
+
+        // Set up ReactView -> ReactSurfaceView
+        when(reactView.getChildAt(0)).thenReturn(reactSurfaceView);
+        when(reactView.getChildCount()).thenReturn(1);
+
+        // Set up ReactSurfaceView -> ReactViewGroup(s)
+        // First child: ViewGroup with DebuggingOverlay (should be skipped)
+        when(reactSurfaceView.getChildAt(0)).thenReturn(debuggingOverlayContainer);
+        when(reactSurfaceView.getChildAt(1)).thenReturn(contentViewGroup);
+        when(reactSurfaceView.getChildCount()).thenReturn(2);
+
+        // Set up debuggingOverlayContainer: has DebuggingOverlay as first child
+        when(debuggingOverlayContainer.getChildAt(0)).thenReturn(debuggingOverlay);
+
+        // Set up contentViewGroup: not a DebuggingOverlay, visible, and coordinates
+        // inside
+        when(contentViewGroup.getChildAt(0)).thenReturn(null); // Not a DebuggingOverlay
+        when(contentViewGroup.getVisibility()).thenReturn(View.VISIBLE); // For isVisible extension
+
+        // Set up getHitRect for coordinatesInsideView to work
+        Rect hitRect = new Rect(0, 0, 100, 100);
+        doAnswer((Answer<Void>) invocation -> {
+            Rect rect = invocation.getArgument(0);
+            rect.set(hitRect);
+            return null;
+        }).when(contentViewGroup).getHitRect(any(Rect.class));
+
+        // Also mock getHitRect for debuggingOverlayContainer (though it should be
+        // skipped)
+        doAnswer((Answer<Void>) invocation -> {
+            Rect rect = invocation.getArgument(0);
+            rect.set(new Rect(0, 0, 100, 100));
+            return null;
+        }).when(debuggingOverlayContainer).getHitRect(any(Rect.class));
+    }
+
     @Test
     public void downEventIsHandled() {
+        mockHierarchyWithDebuggingOverlay();
         uut.setInterceptTouchOutside(new Bool(true));
         uut.onInterceptTouchEvent(downEvent);
         verify(uut, times(1)).handleDown(downEvent);