diff --git a/packages/components/CHANGELOG.md b/packages/components/CHANGELOG.md
index 4196d8be8f5524..2fbc3447917a1e 100644
--- a/packages/components/CHANGELOG.md
+++ b/packages/components/CHANGELOG.md
@@ -8,6 +8,7 @@
 -   `BorderControl`: Ensure box-sizing is reset for the control ([#42754](https://github.com/WordPress/gutenberg/pull/42754)).
 -   `InputControl`: Fix acceptance of falsy values in controlled updates ([#42484](https://github.com/WordPress/gutenberg/pull/42484/)).
 -   `Tooltip (Experimental)`, `CustomSelectControl`, `TimePicker`: Add missing font-size styles which were necessary in non-WordPress contexts ([#42844](https://github.com/WordPress/gutenberg/pull/42844/)).
+-   `Popover`: fix arrow placement and design ([#42874](https://github.com/WordPress/gutenberg/pull/42874/)).
 
 ### Enhancements
 
diff --git a/packages/components/src/popover/index.js b/packages/components/src/popover/index.js
index 0b9e3f0a981772..c3f56c93895fe5 100644
--- a/packages/components/src/popover/index.js
+++ b/packages/components/src/popover/index.js
@@ -32,6 +32,7 @@ import {
 } from '@wordpress/compose';
 import { close } from '@wordpress/icons';
 import deprecated from '@wordpress/deprecated';
+import { Path, SVG } from '@wordpress/primitives';
 
 /**
  * Internal dependencies
@@ -48,6 +49,30 @@ import { getAnimateClassName } from '../animate';
  */
 const SLOT_NAME = 'Popover';
 
+// An SVG displaying a triangle facing down, filled with a solid
+// color and bordered in such a way to create an arrow-like effect.
+// Keeping the SVG's viewbox squared simplify the arrow positioning
+// calculations.
+const ArrowTriangle = ( props ) => (
+	<SVG
+		{ ...props }
+		xmlns="http://www.w3.org/2000/svg"
+		viewBox={ `0 0 100 100` }
+		className="components-popover__triangle"
+		role="presentation"
+	>
+		<Path
+			className="components-popover__triangle-bg"
+			d="M 0 0 L 50 50 L 100 0"
+		/>
+		<Path
+			className="components-popover__triangle-border"
+			d="M 0 0 L 50 50 L 100 0"
+			vectorEffect="non-scaling-stroke"
+		/>
+	</SVG>
+);
+
 const slotNameContext = createContext();
 
 const positionToPlacement = ( position ) => {
@@ -266,12 +291,7 @@ const Popover = (
 		placement: usedPlacement,
 		middleware: middlewares,
 	} );
-	const staticSide = {
-		top: 'bottom',
-		right: 'left',
-		bottom: 'top',
-		left: 'right',
-	}[ placementData.split( '-' )[ 0 ] ];
+
 	const mergedRefs = useMergeRefs( [ floating, dialogRef, ref ] );
 
 	// Updates references
@@ -407,22 +427,22 @@ const Popover = (
 			<div className="components-popover__content">{ children }</div>
 			{ hasArrow && (
 				<div
-					className="components-popover__arrow"
 					ref={ arrowRef }
+					className={ [
+						'components-popover__arrow',
+						`is-${ placementData.split( '-' )[ 0 ] }`,
+					].join( ' ' ) }
 					style={ {
-						left:
-							! arrowData?.x || Number.isNaN( arrowData?.x )
-								? 0
-								: arrowData.x,
-						top:
-							! arrowData?.y || Number.isNaN( arrowData?.y )
-								? 0
-								: arrowData.y,
-						right: undefined,
-						bottom: undefined,
-						[ staticSide ]: '-4px',
+						left: Number.isFinite( arrowData?.x )
+							? `${ arrowData.x }px`
+							: '',
+						top: Number.isFinite( arrowData?.y )
+							? `${ arrowData.y }px`
+							: '',
 					} }
-				/>
+				>
+					<ArrowTriangle />
+				</div>
 			) }
 		</div>
 	);
diff --git a/packages/components/src/popover/style.scss b/packages/components/src/popover/style.scss
index 6002139c2c8566..00639f67216781 100644
--- a/packages/components/src/popover/style.scss
+++ b/packages/components/src/popover/style.scss
@@ -1,3 +1,5 @@
+$arrow-triangle-base-size: 14px;
+
 .components-popover {
 	z-index: z-index(".components-popover");
 
@@ -60,12 +62,64 @@
 
 .components-popover__arrow {
 	position: absolute;
-	background: $gray-400;
-	width: 8px;
-	height: 8px;
-	transform: rotate(45deg);
-	z-index: -1;
+	width: $arrow-triangle-base-size;
+	height: $arrow-triangle-base-size;
+	pointer-events: none;
+
+	// Thin line that helps to make sure that the underlying
+	// popover__content's outline is fully overlapped by the
+	// arrow
+	&::before {
+		content: "";
+		position: absolute;
+		top: -1px;
+		left: 0;
+		height: 2px;
+		width: 100%;
+		background-color: $white;
+	}
+
+	// Position and rotate the arrow depending on the popover's placement.
+	// The `!important' is necessary to override the inline styles.
+	&.is-top {
+		bottom: -1 * $arrow-triangle-base-size !important;
+		transform: rotate(0);
+	}
+	&.is-right {
+		/*rtl:begin:ignore*/
+		left: -1 * $arrow-triangle-base-size !important;
+		transform: rotate(90deg);
+	}
+	&.is-bottom {
+		top: -1 * $arrow-triangle-base-size !important;
+		transform: rotate(180deg);
+	}
+	&.is-left {
+		/*rtl:begin:ignore*/
+		right: -1 * $arrow-triangle-base-size !important;
+		transform: rotate(-90deg);
+		/*rtl:end:ignore*/
+	}
+}
+
+.components-popover__triangle {
+	position: absolute;
+	height: 100%;
+	width: 100%;
+}
+
+.components-popover__triangle-bg {
+	// Fill color is the same as the .components-popover__content's background
+	fill: $white;
+}
+
+.components-popover__triangle-border {
+	// Stroke colors are the same as the .components-popover__content's outline
+	fill: transparent;
+	stroke-width: $border-width;
+	stroke: $gray-400;
+
 	.is-alternate & {
-		background: $gray-900;
+		stroke: $gray-900;
 	}
 }