diff --git a/browser/components/downloads/content/indicator.js b/browser/components/downloads/content/indicator.js
index bbbe1df187b..073ff0b8b45 100644
--- a/browser/components/downloads/content/indicator.js
+++ b/browser/components/downloads/content/indicator.js
@@ -156,6 +156,9 @@ const DownloadsButton = {
     if (!placeholder) {
       // The placeholder has been removed from the browser window.
       indicator.collapsed = true;
+      // Move the indicator to a safe position on the toolbar, since otherwise
+      // it may break the merge of adjacent items, like back/forward + urlbar.
+      indicator.parentNode.appendChild(indicator);
       return null;
     }
 
diff --git a/browser/components/downloads/content/indicatorOverlay.xul b/browser/components/downloads/content/indicatorOverlay.xul
index 51c983e3960..bb62229e7f9 100644
--- a/browser/components/downloads/content/indicatorOverlay.xul
+++ b/browser/components/downloads/content/indicatorOverlay.xul
@@ -29,7 +29,8 @@
                    ondrop="DownloadsIndicatorView.onDrop(event);"
                    ondragover="DownloadsIndicatorView.onDragOver(event);"
                    ondragenter="DownloadsIndicatorView.onDragOver(event);"
-                   ondragleave="DownloadsIndicatorView.onDragLeave(event);">
+                   ondragleave="DownloadsIndicatorView.onDragLeave(event);"
+                   skipintoolbarset="true">
       <!-- The panel's anchor area is smaller than the outer button, but must
            always be visible and must not move or resize when the indicator
            state changes, otherwise the panel could change its position or lose