diff --git a/crates/editor/src/editor.rs b/crates/editor/src/editor.rs
index bff66cb..0f4b576 100644
--- a/crates/editor/src/editor.rs
+++ b/crates/editor/src/editor.rs
@@ -3519,22 +3519,7 @@ impl Editor {
         self.selection_mark_mode = false;
         self.selection_drag_state = SelectionDragState::None;
 
-        if self.dismiss_menus_and_popups(true, window, cx) {
-            cx.notify();
-            return;
-        }
-        if self.clear_expanded_diff_hunks(cx) {
-            cx.notify();
-            return;
-        }
-        if self.show_git_blame_gutter
-            && !self
-                .blame
-                .as_ref()
-                .is_some_and(|blame| blame.read(cx).is_static())
-        {
-            self.show_git_blame_gutter = false;
-            cx.notify();
+        if self.dismiss_overlays(window, cx) {
             return;
         }
 
@@ -3553,6 +3538,28 @@ impl Editor {
         cx.propagate();
     }
 
+    /// Closes what [`Cancel`] closes before it gets to the selections: menus and popovers,
+    /// expanded diff hunks and the git blame gutter. Returns whether anything was closed.
+    pub fn dismiss_overlays(&mut self, window: &mut Window, cx: &mut Context<Self>) -> bool {
+        let mut dismissed =
+            self.dismiss_menus_and_popups(true, window, cx) || self.clear_expanded_diff_hunks(cx);
+        if !dismissed
+            && self.show_git_blame_gutter
+            && !self
+                .blame
+                .as_ref()
+                .is_some_and(|blame| blame.read(cx).is_static())
+        {
+            self.show_git_blame_gutter = false;
+            dismissed = true;
+        }
+
+        if dismissed {
+            cx.notify();
+        }
+        dismissed
+    }
+
     pub fn dismiss_menus_and_popups(
         &mut self,
         is_user_requested: bool,
diff --git a/crates/vim/src/helix.rs b/crates/vim/src/helix.rs
index 9b2ecf8..67d4b7e 100644
--- a/crates/vim/src/helix.rs
+++ b/crates/vim/src/helix.rs
@@ -1879,7 +1879,7 @@ mod test {
     use futures::StreamExt;
     use std::{fmt::Write, time::Duration};
 
-    use editor::{HighlightKey, MultiBufferOffset};
+    use editor::{Anchor, HighlightKey, MultiBufferOffset};
     use gpui::{
         Bounds, DispatchEventResult, ElementInputHandler, KeyBinding, KeyDownEvent, Keystroke,
         PlatformInput, PlatformInputHandler, UpdateGlobal, VisualTestContext,
@@ -4687,6 +4687,45 @@ mod test {
         assert_eq!(cx.active_operator(), None);
     }
 
+    #[gpui::test]
+    async fn test_helix_escape_collapses_expanded_hunk(cx: &mut gpui::TestAppContext) {
+        let mut cx = VimTestContext::new(cx, true).await;
+        cx.enable_helix();
+
+        let selected = indoc! {"
+            one
+            «twoˇ»
+            three"};
+        cx.set_state(selected, Mode::HelixNormal);
+        cx.set_head_text(indoc! {"
+            one
+            CHANGED
+            three"});
+        cx.run_until_parked();
+
+        let has_expanded_hunks = |cx: &mut VimTestContext| {
+            cx.update_editor(|editor, _, cx| {
+                editor
+                    .buffer()
+                    .read(cx)
+                    .has_expanded_diff_hunks_in_ranges(&[Anchor::Min..Anchor::Max], cx)
+            })
+        };
+
+        cx.simulate_keystrokes("g o");
+        assert!(has_expanded_hunks(&mut cx));
+
+        cx.simulate_keystrokes("escape");
+        assert!(
+            !has_expanded_hunks(&mut cx),
+            "escape should collapse the expanded hunk"
+        );
+        cx.assert_state(selected, Mode::HelixNormal);
+
+        cx.simulate_keystrokes("escape");
+        cx.assert_state(selected, Mode::HelixNormal);
+    }
+
     #[gpui::test]
     async fn test_helix_rename_uses_visible_cursor_position(cx: &mut gpui::TestAppContext) {
         let mut cx = VimTestContext::new_typescript(cx).await;
diff --git a/crates/vim/src/vim.rs b/crates/vim/src/vim.rs
index c016bd6..8c6c8c3 100644
--- a/crates/vim/src/vim.rs
+++ b/crates/vim/src/vim.rs
@@ -714,6 +714,11 @@ impl Vim {
                 editor,
                 cx,
                 |vim, _: &SwitchToHelixNormalMode, window, cx| {
+                    // Escape in helix normal mode lands here. Close popovers and overlays
+                    // like `editor::Cancel` does in vim mode, but keep the selections.
+                    if vim.mode == Mode::HelixNormal {
+                        vim.update_editor(cx, |_, editor, cx| editor.dismiss_overlays(window, cx));
+                    }
                     vim.switch_mode(Mode::HelixNormal, true, window, cx)
                 },
             );