diff --git a/servers/physics_2d/broad_phase_2d_hash_grid.cpp b/servers/physics_2d/broad_phase_2d_hash_grid.cpp
index be73d908dee..0df41946e0a 100644
--- a/servers/physics_2d/broad_phase_2d_hash_grid.cpp
+++ b/servers/physics_2d/broad_phase_2d_hash_grid.cpp
@@ -35,7 +35,12 @@
 #define LARGE_ELEMENT_FI 1.01239812
 
 void BroadPhase2DHashGrid::_pair_attempt(Element *p_elem, Element *p_with) {
-
+	if (p_elem->owner == p_with->owner) {
+		return;
+	}
+	if (!_test_collision_mask(p_elem->collision_mask, p_elem->collision_layer, p_with->collision_mask, p_with->collision_layer)) {
+		return;
+	}
 	Map<Element *, PairData *>::Element *E = p_elem->paired.find(p_with);
 
 	ERR_FAIL_COND(p_elem->_static && p_with->_static);
@@ -51,7 +56,12 @@ void BroadPhase2DHashGrid::_pair_attempt(Element *p_elem, Element *p_with) {
 }
 
 void BroadPhase2DHashGrid::_unpair_attempt(Element *p_elem, Element *p_with) {
-
+	if (p_elem->owner == p_with->owner) {
+		return;
+	}
+	if (!_test_collision_mask(p_elem->collision_mask, p_elem->collision_layer, p_with->collision_mask, p_with->collision_layer)) {
+		return;
+	}
 	Map<Element *, PairData *>::Element *E = p_elem->paired.find(p_with);
 
 	ERR_FAIL_COND(!E); //this should really be paired..
@@ -80,36 +90,32 @@ void BroadPhase2DHashGrid::_check_motion(Element *p_elem) {
 		bool physical_collision = p_elem->aabb.intersects(E->key()->aabb);
 		bool logical_collision = p_elem->owner->test_collision_mask(E->key()->owner);
 
-		if (physical_collision) {
-			if (!E->get()->colliding || (logical_collision && !E->get()->ud && pair_callback)) {
+		if (physical_collision && logical_collision) {
+			if (!E->get()->colliding && pair_callback) {
 				E->get()->ud = pair_callback(p_elem->owner, p_elem->subindex, E->key()->owner, E->key()->subindex, pair_userdata);
-			} else if (E->get()->colliding && !logical_collision && E->get()->ud && unpair_callback) {
-				unpair_callback(p_elem->owner, p_elem->subindex, E->key()->owner, E->key()->subindex, E->get()->ud, unpair_userdata);
-				E->get()->ud = nullptr;
 			}
 			E->get()->colliding = true;
-		} else { // No physcial_collision
+		} else { // No collision
 			if (E->get()->colliding && unpair_callback) {
 				unpair_callback(p_elem->owner, p_elem->subindex, E->key()->owner, E->key()->subindex, E->get()->ud, unpair_userdata);
+				E->get()->ud = nullptr;
 			}
 			E->get()->colliding = false;
 		}
 	}
 }
 
-void BroadPhase2DHashGrid::_enter_grid(Element *p_elem, const Rect2 &p_rect, bool p_static) {
-
+void BroadPhase2DHashGrid::_enter_grid(Element *p_elem, const Rect2 &p_rect, bool p_static, bool p_force_enter) {
 	Vector2 sz = (p_rect.size / cell_size * LARGE_ELEMENT_FI); //use magic number to avoid floating point issues
 	if (sz.width * sz.height > large_object_min_surface) {
 		//large object, do not use grid, must check against all elements
 		for (Map<ID, Element>::Element *E = element_map.front(); E; E = E->next()) {
-			if (E->key() == p_elem->self)
+			if (E->key() == p_elem->self) {
 				continue; // do not pair against itself
-			if (E->get().owner == p_elem->owner)
+			}
+			if (E->get()._static && p_static) {
 				continue;
-			if (E->get()._static && p_static)
-				continue;
-
+			}
 			_pair_attempt(p_elem, &E->get());
 		}
 
@@ -140,7 +146,7 @@ void BroadPhase2DHashGrid::_enter_grid(Element *p_elem, const Rect2 &p_rect, boo
 				pb = pb->next;
 			}
 
-			bool entered = false;
+			bool entered = p_force_enter;
 
 			if (!pb) {
 				//does not exist, create!
@@ -164,18 +170,12 @@ void BroadPhase2DHashGrid::_enter_grid(Element *p_elem, const Rect2 &p_rect, boo
 			if (entered) {
 
 				for (Map<Element *, RC>::Element *E = pb->object_set.front(); E; E = E->next()) {
-
-					if (E->key()->owner == p_elem->owner)
-						continue;
 					_pair_attempt(p_elem, E->key());
 				}
 
 				if (!p_static) {
 
 					for (Map<Element *, RC>::Element *E = pb->static_object_set.front(); E; E = E->next()) {
-
-						if (E->key()->owner == p_elem->owner)
-							continue;
 						_pair_attempt(p_elem, E->key());
 					}
 				}
@@ -186,20 +186,17 @@ void BroadPhase2DHashGrid::_enter_grid(Element *p_elem, const Rect2 &p_rect, boo
 	//pair separatedly with large elements
 
 	for (Map<Element *, RC>::Element *E = large_elements.front(); E; E = E->next()) {
-
-		if (E->key() == p_elem)
+		if (E->key() == p_elem) {
 			continue; // do not pair against itself
-		if (E->key()->owner == p_elem->owner)
+		}
+		if (E->key()->_static && p_static) {
 			continue;
-		if (E->key()->_static && p_static)
-			continue;
-
+		}
 		_pair_attempt(E->key(), p_elem);
 	}
 }
 
-void BroadPhase2DHashGrid::_exit_grid(Element *p_elem, const Rect2 &p_rect, bool p_static) {
-
+void BroadPhase2DHashGrid::_exit_grid(Element *p_elem, const Rect2 &p_rect, bool p_static, bool p_force_exit) {
 	Vector2 sz = (p_rect.size / cell_size * LARGE_ELEMENT_FI);
 	if (sz.width * sz.height > large_object_min_surface) {
 
@@ -242,7 +239,7 @@ void BroadPhase2DHashGrid::_exit_grid(Element *p_elem, const Rect2 &p_rect, bool
 
 			ERR_CONTINUE(!pb); //should exist!!
 
-			bool exited = false;
+			bool exited = p_force_exit;
 
 			if (p_static) {
 				if (pb->static_object_set[p_elem].dec() == 0) {
@@ -261,18 +258,12 @@ void BroadPhase2DHashGrid::_exit_grid(Element *p_elem, const Rect2 &p_rect, bool
 			if (exited) {
 
 				for (Map<Element *, RC>::Element *E = pb->object_set.front(); E; E = E->next()) {
-
-					if (E->key()->owner == p_elem->owner)
-						continue;
 					_unpair_attempt(p_elem, E->key());
 				}
 
 				if (!p_static) {
 
 					for (Map<Element *, RC>::Element *E = pb->static_object_set.front(); E; E = E->next()) {
-
-						if (E->key()->owner == p_elem->owner)
-							continue;
 						_unpair_attempt(p_elem, E->key());
 					}
 				}
@@ -305,13 +296,12 @@ void BroadPhase2DHashGrid::_exit_grid(Element *p_elem, const Rect2 &p_rect, bool
 	}
 
 	for (Map<Element *, RC>::Element *E = large_elements.front(); E; E = E->next()) {
-		if (E->key() == p_elem)
+		if (E->key() == p_elem) {
 			continue; // do not pair against itself
-		if (E->key()->owner == p_elem->owner)
+		}
+		if (E->key()->_static && p_static) {
 			continue;
-		if (E->key()->_static && p_static)
-			continue;
-
+		}
 		//unpair from large elements
 		_unpair_attempt(p_elem, E->key());
 	}
@@ -324,6 +314,8 @@ BroadPhase2DHashGrid::ID BroadPhase2DHashGrid::create(CollisionObject2DSW *p_obj
 	Element e;
 	e.owner = p_object;
 	e._static = false;
+	e.collision_mask = p_object->get_collision_mask();
+	e.collision_layer = p_object->get_collision_layer();
 	e.subindex = p_subindex;
 	e.self = current;
 	e.pass = 0;
@@ -338,17 +330,27 @@ void BroadPhase2DHashGrid::move(ID p_id, const Rect2 &p_aabb) {
 	ERR_FAIL_COND(!E);
 
 	Element &e = E->get();
+	bool layer_changed = e.collision_mask != e.owner->get_collision_mask() || e.collision_layer != e.owner->get_collision_layer();
 
-	if (p_aabb != e.aabb) {
-
+	if (p_aabb != e.aabb || layer_changed) {
+		uint32_t old_mask = e.collision_mask;
+		uint32_t old_layer = e.collision_layer;
 		if (p_aabb != Rect2()) {
+			e.collision_mask = e.owner->get_collision_mask();
+			e.collision_layer = e.owner->get_collision_layer();
 
-			_enter_grid(&e, p_aabb, e._static);
+			_enter_grid(&e, p_aabb, e._static, layer_changed);
 		}
 
 		if (e.aabb != Rect2()) {
+			// Need _exit_grid to remove from cells based on the old layer values.
+			e.collision_mask = old_mask;
+			e.collision_layer = old_layer;
 
-			_exit_grid(&e, e.aabb, e._static);
+			_exit_grid(&e, e.aabb, e._static, layer_changed);
+
+			e.collision_mask = e.owner->get_collision_mask();
+			e.collision_layer = e.owner->get_collision_layer();
 		}
 
 		e.aabb = p_aabb;
@@ -367,13 +369,14 @@ void BroadPhase2DHashGrid::set_static(ID p_id, bool p_static) {
 	if (e._static == p_static)
 		return;
 
-	if (e.aabb != Rect2())
-		_exit_grid(&e, e.aabb, e._static);
+	if (e.aabb != Rect2()) {
+		_exit_grid(&e, e.aabb, e._static, false);
+	}
 
 	e._static = p_static;
 
 	if (e.aabb != Rect2()) {
-		_enter_grid(&e, e.aabb, e._static);
+		_enter_grid(&e, e.aabb, e._static, false);
 		_check_motion(&e);
 	}
 }
@@ -384,8 +387,9 @@ void BroadPhase2DHashGrid::remove(ID p_id) {
 
 	Element &e = E->get();
 
-	if (e.aabb != Rect2())
-		_exit_grid(&e, e.aabb, e._static);
+	if (e.aabb != Rect2()) {
+		_exit_grid(&e, e.aabb, e._static, false);
+	}
 
 	element_map.erase(p_id);
 }
diff --git a/servers/physics_2d/broad_phase_2d_hash_grid.h b/servers/physics_2d/broad_phase_2d_hash_grid.h
index 29e9ccee0a1..5510ff92342 100644
--- a/servers/physics_2d/broad_phase_2d_hash_grid.h
+++ b/servers/physics_2d/broad_phase_2d_hash_grid.h
@@ -54,6 +54,9 @@ class BroadPhase2DHashGrid : public BroadPhase2DSW {
 		CollisionObject2DSW *owner;
 		bool _static;
 		Rect2 aabb;
+		// Owner's collision_mask/layer, used to detect changes in layers.
+		uint32_t collision_mask;
+		uint32_t collision_layer;
 		int subindex;
 		uint64_t pass;
 		Map<Element *, PairData *> paired;
@@ -120,8 +123,12 @@ class BroadPhase2DHashGrid : public BroadPhase2DSW {
 	UnpairCallback unpair_callback;
 	void *unpair_userdata;
 
-	void _enter_grid(Element *p_elem, const Rect2 &p_rect, bool p_static);
-	void _exit_grid(Element *p_elem, const Rect2 &p_rect, bool p_static);
+	static _FORCE_INLINE_ bool _test_collision_mask(uint32_t p_mask1, uint32_t p_layer1, uint32_t p_mask2, uint32_t p_layer2) {
+		return p_mask1 & p_layer2 || p_mask2 & p_layer1;
+	}
+
+	void _enter_grid(Element *p_elem, const Rect2 &p_rect, bool p_static, bool p_force_enter);
+	void _exit_grid(Element *p_elem, const Rect2 &p_rect, bool p_static, bool p_force_exit);
 	template <bool use_aabb, bool use_segment>
 	_FORCE_INLINE_ void _cull(const Point2i p_cell, const Rect2 &p_aabb, const Point2 &p_from, const Point2 &p_to, CollisionObject2DSW **p_results, int p_max_results, int *p_result_indices, int &index);