diff --git a/src/bit-components.js b/src/bit-components.js
index a96dc66f63..6959257411 100644
--- a/src/bit-components.js
+++ b/src/bit-components.js
@@ -89,6 +89,8 @@ export const TextButton = defineComponent({ labelRef: Types.eid });
 export const HoldableButton = defineComponent();
 export const SingleActionButton = defineComponent();
 export const Pen = defineComponent();
+export const PenActive = defineComponent();
+export const PenUpdated = defineComponent();
 export const HoverMenuChild = defineComponent();
 export const Static = defineComponent();
 export const Inspectable = defineComponent();
diff --git a/src/components/tools/pen.js b/src/components/tools/pen.js
index 7934aaa21c..1fa6f0576b 100644
--- a/src/components/tools/pen.js
+++ b/src/components/tools/pen.js
@@ -8,6 +8,9 @@ import {
 } from "../../systems/sound-effects-system";
 import { waitForDOMContentLoaded } from "../../utils/async-utils";
 import { convertStandardMaterial } from "../../utils/material-utils";
+import { addComponent } from "bitecs";
+import { PenUpdated } from "../../bit-components";
+import { shouldUseNewLoader } from "../../utils/bit-utils";
 
 const pathsMap = {
   "player-right-controller": {
@@ -479,11 +482,15 @@ AFRAME.registerComponent("pen", {
 
   populateEntities(targets) {
     targets.length = 0;
-    // TODO: Do not querySelectorAll on the entire scene every time anything changes!
-    const els = AFRAME.scenes[0].querySelectorAll(".collidable, .interactable, #environment-root");
-    for (let i = 0; i < els.length; i++) {
-      if (!els[i].classList.contains("pen") && els[i].object3D) {
-        targets.push(els[i].object3D);
+    if (shouldUseNewLoader()) {
+      addComponent(APP.world, PenUpdated, this.el.eid);
+    } else {
+      // TODO: Do not querySelectorAll on the entire scene every time anything changes!
+      const els = AFRAME.scenes[0].querySelectorAll(".collidable, .interactable, #environment-root");
+      for (let i = 0; i < els.length; i++) {
+        if (!els[i].classList.contains("pen") && els[i].object3D) {
+          targets.push(els[i].object3D);
+        }
       }
     }
   },
diff --git a/src/systems/bit-pen-system.ts b/src/systems/bit-pen-system.ts
new file mode 100644
index 0000000000..1d867af1c1
--- /dev/null
+++ b/src/systems/bit-pen-system.ts
@@ -0,0 +1,39 @@
+import { defineQuery, enterQuery, entityExists, hasComponent, removeComponent } from "bitecs";
+import { HubsWorld } from "../app";
+import { CursorRaycastable, Pen, PenActive, PenUpdated, SceneRoot } from "../bit-components";
+import { PenComponent, PenToolsSystem } from "aframe";
+import { Object3D } from "three";
+import { EntityID } from "../utils/networking-types";
+import { anyEntityWith } from "../utils/bit-utils";
+
+function addTarget(world: HubsWorld, target: EntityID, targets: Object3D[]) {
+  const object = APP.world.eid2obj.get(target)!;
+  if (!hasComponent(world, Pen, target) && !targets.includes(object)) {
+    targets.push(object);
+  }
+}
+
+const raycastableQuery = defineQuery([CursorRaycastable]);
+const sceneQuery = defineQuery([SceneRoot]);
+const raycastableEnterQuery = enterQuery(raycastableQuery);
+const penUpdateQuery = defineQuery([PenUpdated]);
+const penUpdateEnterQuery = enterQuery(penUpdateQuery);
+export function bitPenCompatSystem(world: HubsWorld, penToolsSystem: PenToolsSystem) {
+  const pen = penToolsSystem.myPen?.components["pen"] as PenComponent;
+  if (pen) {
+    removeComponent(world, PenUpdated, pen.el.eid);
+  }
+  if (anyEntityWith(world, PenActive)) {
+    penUpdateEnterQuery(world).forEach(eid => {
+      raycastableQuery(APP.world).forEach(eid => {
+        addTarget(world, eid, pen.targets);
+      });
+      sceneQuery(world).forEach(eid => {
+        addTarget(world, eid, pen.targets);
+      });
+    });
+    raycastableEnterQuery(world).forEach(eid => {
+      addTarget(world, eid, pen.targets);
+    });
+  }
+}
diff --git a/src/systems/hold-system.js b/src/systems/hold-system.js
index 72316e506a..53b86b3043 100644
--- a/src/systems/hold-system.js
+++ b/src/systems/hold-system.js
@@ -14,13 +14,14 @@ import {
   AEntity,
   Networked,
   MediaLoader,
-  Deletable
+  Deletable,
+  PenActive
 } from "../bit-components";
 import { canMove } from "../utils/permissions-utils";
 import { canMove as canMoveEntity } from "../utils/bit-permissions-utils";
 import { isPinned } from "../bit-systems/networking";
 import { takeOwnership } from "../utils/take-ownership";
-import { findAncestorWithComponents } from "../utils/bit-utils";
+import { anyEntityWith, findAncestorWithComponents } from "../utils/bit-utils";
 
 const GRAB_REMOTE_RIGHT = paths.actions.cursor.right.grab;
 const DROP_REMOTE_RIGHT = paths.actions.cursor.right.drop;
@@ -87,7 +88,8 @@ function grab(world, userinput, queryHovered, held, grabPath) {
     target &&
     userinput.get(grabPath) &&
     (!isEntityPinned || AFRAME.scenes[0].is("frozen")) &&
-    hasPermissionToGrab(world, target)
+    hasPermissionToGrab(world, target) &&
+    !anyEntityWith(world, PenActive)
   ) {
     if (hasComponent(world, Networked, target)) {
       takeOwnership(world, target);
@@ -99,7 +101,7 @@ function grab(world, userinput, queryHovered, held, grabPath) {
 
 function drop(world, userinput, queryHeld, held, dropPath) {
   const heldEid = queryHeld(world)[0];
-  if (heldEid && userinput.get(dropPath)) {
+  if (heldEid && userinput.get(dropPath) && !anyEntityWith(world, PenActive)) {
     // TODO: Drop on ownership lost
     removeComponent(world, held, heldEid);
 
diff --git a/src/systems/hubs-systems.ts b/src/systems/hubs-systems.ts
index 521d536120..be7fc64c07 100644
--- a/src/systems/hubs-systems.ts
+++ b/src/systems/hubs-systems.ts
@@ -81,6 +81,7 @@ import { mixerAnimatableSystem } from "../bit-systems/mixer-animatable";
 import { loopAnimationSystem } from "../bit-systems/loop-animation";
 import { linkSystem } from "../bit-systems/link-system";
 import { objectMenuTransformSystem } from "../bit-systems/object-menu-transform-system";
+import { bitPenCompatSystem } from "./bit-pen-system";
 
 declare global {
   interface Window {
@@ -277,6 +278,8 @@ export function mainTick(xrFrame: XRFrame, renderer: WebGLRenderer, scene: Scene
   videoTextureSystem(world);
   audioDebugSystem(world);
 
+  bitPenCompatSystem(world, aframeSystems["pen-tools"]);
+
   deleteEntitySystem(world, aframeSystems.userinput);
   destroyAtExtremeDistanceSystem(world);
   removeNetworkedObjectButtonSystem(world);
diff --git a/src/systems/pen-tools.js b/src/systems/pen-tools.js
index 10dba58783..69e7fc9b67 100644
--- a/src/systems/pen-tools.js
+++ b/src/systems/pen-tools.js
@@ -1,4 +1,7 @@
+import { addComponent, removeComponent } from "bitecs";
 import { waitForDOMContentLoaded } from "../utils/async-utils";
+import { Pen, PenActive } from "../bit-components";
+import { anyEntityWith } from "../utils/bit-utils";
 
 // Used for tracking and managing pen tools in the scene
 AFRAME.registerSystem("pen-tools", {
@@ -32,7 +35,12 @@ AFRAME.registerSystem("pen-tools", {
 
     if (this.myPen) {
       this.sceneEl.addState("pen");
+      addComponent(APP.world, PenActive, this.myPen.eid);
     } else {
+      const pen = anyEntityWith(APP.world, Pen);
+      if (pen) {
+        removeComponent(APP.world, PenActive, pen);
+      }
       this.sceneEl.removeState("pen");
     }
   }
diff --git a/types/aframe.d.ts b/types/aframe.d.ts
index 2a397bc53d..dbad160219 100644
--- a/types/aframe.d.ts
+++ b/types/aframe.d.ts
@@ -96,6 +96,14 @@ declare module "aframe" {
     invaders: PersonalSpaceInvader[];
   }
 
+  interface PenToolsSystem extends ASystem {
+    myPen: AElement;
+  }
+
+  interface PenComponent extends AComponent {
+    targets: Object3D[];
+  }
+
   interface TransformSelectedObjectSystem extends ASystem {
     startTransform(targetObj: Object3D, handObj: Object3D, data: object): void;
     stopTransform(): void;
@@ -119,6 +127,7 @@ declare module "aframe" {
       /** @deprecated see bit-interaction-system */
       interaction: InteractionSystem;
       nav: NavSystem;
+      "pen-tools": PenToolsSystem;
     };
     emit(string, any?): void;
     addState(string): void;