diff --git a/packages/@headlessui-react/CHANGELOG.md b/packages/@headlessui-react/CHANGELOG.md
index 76b634e17b..3bf62ea600 100644
--- a/packages/@headlessui-react/CHANGELOG.md
+++ b/packages/@headlessui-react/CHANGELOG.md
@@ -16,6 +16,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Ensure the main tree and parent `Dialog` components are marked as `inert` ([#2290](https://github.com/tailwindlabs/headlessui/pull/2290))
 - Fix nested `Popover` components not opening ([#2293](https://github.com/tailwindlabs/headlessui/pull/2293))
 - Make React types more compatible with other libraries ([#2282](https://github.com/tailwindlabs/headlessui/pull/2282))
+- Fix `Dialog` cleanup when the `Dialog` becomes hidden ([#2303](https://github.com/tailwindlabs/headlessui/pull/2303))
 
 ## [1.7.11] - 2023-02-15
 
diff --git a/packages/@headlessui-react/src/components/dialog/dialog.test.tsx b/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
index 535bf66c89..a36bb4cb16 100644
--- a/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
+++ b/packages/@headlessui-react/src/components/dialog/dialog.test.tsx
@@ -30,7 +30,7 @@ import { OpenClosedProvider, State } from '../../internal/open-closed'
 jest.mock('../../hooks/use-id')
 
 // @ts-expect-error
-global.IntersectionObserver = class FakeIntersectionObserver {
+global.ResizeObserver = class FakeResizeObserver {
   observe() {}
   disconnect() {}
 }
diff --git a/packages/@headlessui-react/src/components/dialog/dialog.tsx b/packages/@headlessui-react/src/components/dialog/dialog.tsx
index 7c810602ae..7f31f17724 100644
--- a/packages/@headlessui-react/src/components/dialog/dialog.tsx
+++ b/packages/@headlessui-react/src/components/dialog/dialog.tsx
@@ -309,14 +309,10 @@ function DialogFn<TTag extends ElementType = typeof DEFAULT_DIALOG_TAG>(
     if (dialogState !== DialogStates.Open) return
     if (!internalDialogRef.current) return
 
-    let observer = new IntersectionObserver((entries) => {
+    let observer = new ResizeObserver((entries) => {
       for (let entry of entries) {
-        if (
-          entry.boundingClientRect.x === 0 &&
-          entry.boundingClientRect.y === 0 &&
-          entry.boundingClientRect.width === 0 &&
-          entry.boundingClientRect.height === 0
-        ) {
+        let rect = entry.target.getBoundingClientRect()
+        if (rect.x === 0 && rect.y === 0 && rect.width === 0 && rect.height === 0) {
           close()
         }
       }
diff --git a/packages/@headlessui-vue/CHANGELOG.md b/packages/@headlessui-vue/CHANGELOG.md
index f7e641bafe..c5c618015b 100644
--- a/packages/@headlessui-vue/CHANGELOG.md
+++ b/packages/@headlessui-vue/CHANGELOG.md
@@ -12,6 +12,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Ensure the main tree and parent `Dialog` components are marked as `inert` ([#2290](https://github.com/tailwindlabs/headlessui/pull/2290))
 - Fix nested `Popover` components not opening ([#2293](https://github.com/tailwindlabs/headlessui/pull/2293))
 - Fix `change` event incorrectly getting called on `blur` ([#2296](https://github.com/tailwindlabs/headlessui/pull/2296))
+- Fix `Dialog` cleanup when the `Dialog` becomes hidden ([#2303](https://github.com/tailwindlabs/headlessui/pull/2303))
 
 ## [1.7.10] - 2023-02-15
 
diff --git a/packages/@headlessui-vue/src/components/dialog/dialog.test.ts b/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
index 9f6307cf0b..0ffc735119 100644
--- a/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
+++ b/packages/@headlessui-vue/src/components/dialog/dialog.test.ts
@@ -44,7 +44,7 @@ import { html } from '../../test-utils/html'
 import { useOpenClosedProvider, State } from '../../internal/open-closed'
 
 // @ts-expect-error
-global.IntersectionObserver = class FakeIntersectionObserver {
+global.ResizeObserver = class FakeResizeObserver {
   observe() {}
   disconnect() {}
 }
diff --git a/packages/@headlessui-vue/src/components/dialog/dialog.ts b/packages/@headlessui-vue/src/components/dialog/dialog.ts
index f3865966e2..2c5272d97f 100644
--- a/packages/@headlessui-vue/src/components/dialog/dialog.ts
+++ b/packages/@headlessui-vue/src/components/dialog/dialog.ts
@@ -280,14 +280,10 @@ export let Dialog = defineComponent({
       let container = dom(internalDialogRef)
       if (!container) return
 
-      let observer = new IntersectionObserver((entries) => {
+      let observer = new ResizeObserver((entries) => {
         for (let entry of entries) {
-          if (
-            entry.boundingClientRect.x === 0 &&
-            entry.boundingClientRect.y === 0 &&
-            entry.boundingClientRect.width === 0 &&
-            entry.boundingClientRect.height === 0
-          ) {
+          let rect = entry.target.getBoundingClientRect()
+          if (rect.x === 0 && rect.y === 0 && rect.width === 0 && rect.height === 0) {
             api.close()
           }
         }