diff --git a/indra/newview/llnavigationbar.cpp b/indra/newview/llnavigationbar.cpp
index fce666c9d4c555cf52a7932c598ea440b640ab2c..67295179b21e03ba605588950920c9b3e19b5da3 100644
--- a/indra/newview/llnavigationbar.cpp
+++ b/indra/newview/llnavigationbar.cpp
@@ -776,7 +776,7 @@ void LLNavigationBar::showNavigationPanel(BOOL visible)
 		{
 			// Navigation Panel must be shown. Favorites Panel is hidden.
 
-			S32 height = mDefaultNbRect.getHeight() - mDefaultFpRect.getHeight();
+			S32 height = mDefaultNbRect.getHeight() - mDefaultFpRect.getHeight() - FAVBAR_TOP_PADDING;
 			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), height);
 
 			reshape(nbRect.getWidth(), nbRect.getHeight());
@@ -790,8 +790,11 @@ void LLNavigationBar::showNavigationPanel(BOOL visible)
 		{
 			// Navigation Panel must be hidden. Favorites Panel is visible.
 
-			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), fbRect.getHeight());
-			fbRect.setLeftTopAndSize(fbRect.mLeft, fbRect.getHeight(), fbRect.getWidth(), fbRect.getHeight());
+			S32 fpHeight = mDefaultFpRect.getHeight() + FAVBAR_TOP_PADDING;
+			S32 fpTop = fpHeight - (mDefaultFpRect.getHeight() / 2) + 1;
+
+			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), fpHeight);
+			fbRect.setLeftTopAndSize(fbRect.mLeft, fpTop, fbRect.getWidth(), mDefaultFpRect.getHeight());
 
 			// this is duplicated in 'else' section because it should be called BEFORE fb->reshape
 			reshape(nbRect.getWidth(), nbRect.getHeight());
@@ -813,8 +816,9 @@ void LLNavigationBar::showNavigationPanel(BOOL visible)
 		}
 	}
 
-	childSetVisible("bg_icon", fpVisible);
-	childSetVisible("bg_icon_no_fav", !fpVisible);
+	childSetVisible("bg_icon", visible && fpVisible);
+	childSetVisible("bg_icon_no_fav_bevel", visible && !fpVisible);
+	childSetVisible("bg_icon_no_nav_bevel", !visible && fpVisible);
 }
 
 void LLNavigationBar::showFavoritesPanel(BOOL visible)
@@ -833,7 +837,7 @@ void LLNavigationBar::showFavoritesPanel(BOOL visible)
 			// Favorites Panel must be shown. Navigation Panel is visible.
 
 			S32 fbHeight = fbRect.getHeight();
-			S32 newHeight = nbRect.getHeight() + fbHeight;
+			S32 newHeight = nbRect.getHeight() + fbHeight + FAVBAR_TOP_PADDING;
 
 			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), newHeight);
 			fbRect.setLeftTopAndSize(mDefaultFpRect.mLeft, mDefaultFpRect.mTop, fbRect.getWidth(), fbRect.getHeight());
@@ -842,9 +846,11 @@ void LLNavigationBar::showFavoritesPanel(BOOL visible)
 		{
 			// Favorites Panel must be shown. Navigation Panel is hidden.
 
-			S32 fpHeight = mDefaultFpRect.getHeight();
+			S32 fpHeight = mDefaultFpRect.getHeight() + FAVBAR_TOP_PADDING;
+			S32 fpTop = fpHeight - (mDefaultFpRect.getHeight() / 2) + 1;
+
 			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), fpHeight);
-			fbRect.setLeftTopAndSize(fbRect.mLeft, fpHeight, fbRect.getWidth(), fpHeight);
+			fbRect.setLeftTopAndSize(fbRect.mLeft, fpTop, fbRect.getWidth(), mDefaultFpRect.getHeight());
 		}
 
 		reshape(nbRect.getWidth(), nbRect.getHeight());
@@ -861,7 +867,7 @@ void LLNavigationBar::showFavoritesPanel(BOOL visible)
 			// Favorites Panel must be hidden. Navigation Panel is visible.
 
 			S32 fbHeight = fbRect.getHeight();
-			S32 newHeight = nbRect.getHeight() - fbHeight;
+			S32 newHeight = nbRect.getHeight() - fbHeight - FAVBAR_TOP_PADDING;
 
 			nbRect.setLeftTopAndSize(nbRect.mLeft, nbRect.mTop, nbRect.getWidth(), newHeight);
 		}
@@ -877,8 +883,9 @@ void LLNavigationBar::showFavoritesPanel(BOOL visible)
 		getParent()->reshape(nbRect.getWidth(), nbRect.getHeight());
 	}
 
-	childSetVisible("bg_icon", visible);
-	childSetVisible("bg_icon_no_fav", !visible);
+	childSetVisible("bg_icon", npVisible && visible);
+	childSetVisible("bg_icon_no_fav_bevel", npVisible && !visible);
+	childSetVisible("bg_icon_no_nav_bevel", !npVisible && visible);
 
 	fb->setVisible(visible);
 }
diff --git a/indra/newview/llnavigationbar.h b/indra/newview/llnavigationbar.h
index 03f17af09bbe7cbb7459146a07f49b59e4cdd919..d21d86456e0e623f2b5334acb0458e7b1a79ac03 100644
--- a/indra/newview/llnavigationbar.h
+++ b/indra/newview/llnavigationbar.h
@@ -111,6 +111,8 @@ class LLNavigationBar
 	int getDefFavBarHeight();
 	
 private:
+	// the distance between navigation panel and favorites panel in pixels
+	const static S32 FAVBAR_TOP_PADDING = 10;
 
 	void rebuildTeleportHistoryMenu();
 	void showTeleportHistoryMenu(LLUICtrl* btn_ctrl);
diff --git a/indra/newview/skins/default/textures/navbar/NavBar_BG_NoFav_Bevel.png b/indra/newview/skins/default/textures/navbar/NavBar_BG_NoFav_Bevel.png
new file mode 100644
index 0000000000000000000000000000000000000000..a79d999932cef5ea2bed1fbe0f8162b192f2af5e
Binary files /dev/null and b/indra/newview/skins/default/textures/navbar/NavBar_BG_NoFav_Bevel.png differ
diff --git a/indra/newview/skins/default/textures/navbar/NavBar_BG_NoNav_Bevel.png b/indra/newview/skins/default/textures/navbar/NavBar_BG_NoNav_Bevel.png
new file mode 100644
index 0000000000000000000000000000000000000000..b692ed92daed6b149341e802ba126f41c6b29843
Binary files /dev/null and b/indra/newview/skins/default/textures/navbar/NavBar_BG_NoNav_Bevel.png differ
diff --git a/indra/newview/skins/default/textures/textures.xml b/indra/newview/skins/default/textures/textures.xml
index 40e882757f5ba176b76e866f44a54de5b9ce027c..082b37d80b9dba749e39bec43620822c2d71d175 100644
--- a/indra/newview/skins/default/textures/textures.xml
+++ b/indra/newview/skins/default/textures/textures.xml
@@ -276,9 +276,9 @@ with the same filename but different name
   <texture name="Movement_Up_Off" file_name="bottomtray/Movement_Up_Off.png" preload="false" />
   <texture name="Movement_Up_On" file_name="bottomtray/Movement_Up_On.png" preload="false" />
 
-  <texture name="NavBar_BG_NoFav" file_name="navbar/NavBar_BG_NoFav.png" preload="true" scale.left="1" scale.top="1" scale.right="0" scale.bottom="0" />
   <texture name="NavBar_BG" file_name="navbar/NavBar_BG.png" preload="true" scale.left="1" scale.top="1" scale.right="0" scale.bottom="0" />
-
+  <texture name="NavBar_BG_NoFav_Bevel" file_name="navbar/NavBar_BG_NoFav_Bevel.png" preload="true" scale.left="1" scale.top="1" scale.right="0" scale.bottom="0" />
+  <texture name="NavBar_BG_NoNav_Bevel" file_name="navbar/NavBar_BG_NoNav_Bevel.png" preload="true" scale.left="1" scale.top="1" scale.right="0" scale.bottom="0" />
 
   <texture name="Notices_Unread" file_name="bottomtray/Notices_Unread.png" preload="true" />
 
diff --git a/indra/newview/skins/default/xui/en/panel_navigation_bar.xml b/indra/newview/skins/default/xui/en/panel_navigation_bar.xml
index 00b1fdd843091cbd5e806652518ddd0cbff77b38..2c9d7e4b6a5ddc00fce2723ecc8213f51e919c30 100644
--- a/indra/newview/skins/default/xui/en/panel_navigation_bar.xml
+++ b/indra/newview/skins/default/xui/en/panel_navigation_bar.xml
@@ -22,14 +22,25 @@
 	 width="600"/>
 	<icon
 	 follows="all"
-	 image_name="NavBar_BG_NoFav"
+	 image_name="NavBar_BG_NoFav_Bevel"
 	 mouse_opaque="false"
-	 name="bg_icon_no_fav"
+	 name="bg_icon_no_fav_bevel"
 	 scale_image="true"
 	 visible="false"
 	 left="0"
 	 top="0"
-	 height="50"
+	 height="60"
+	 width="600"/>
+	<icon
+	 follows="all"
+	 image_name="NavBar_BG_NoNav_Bevel"
+	 mouse_opaque="false"
+	 name="bg_icon_no_nav_bevel"
+	 scale_image="true"
+	 visible="false"
+	 left="0"
+	 top="0"
+	 height="60"
 	 width="600"/>
 	<panel
 	 background_visible="false"