diff --git a/packages/calcite-components/src/components/combobox/combobox.e2e.ts b/packages/calcite-components/src/components/combobox/combobox.e2e.ts
index b20ae4a6fad..05ddf88d38e 100644
--- a/packages/calcite-components/src/components/combobox/combobox.e2e.ts
+++ b/packages/calcite-components/src/components/combobox/combobox.e2e.ts
@@ -2219,12 +2219,15 @@ describe("calcite-combobox", () => {
     it("should allow enter unknown tag when tabbing away", async () => {
       const page = await newE2EPage();
       await page.setContent(html`
-        <calcite-combobox allow-custom-values>
-          <calcite-combobox-item id="one" value="one" text-label="one"></calcite-combobox-item>
-          <calcite-combobox-item id="two" value="two" text-label="two"></calcite-combobox-item>
-          <calcite-combobox-item id="three" value="three" text-label="three"></calcite-combobox-item>
-        </calcite-combobox>
-        <button>OK</button>
+        <div class="child" style="display: flex; flex-direction: row">
+          <calcite-combobox allow-custom-values>
+            <calcite-combobox-item id="one" value="one" text-label="one"></calcite-combobox-item>
+            <calcite-combobox-item id="two" value="two" text-label="two"></calcite-combobox-item>
+            <calcite-combobox-item id="three" value="three" text-label="three"></calcite-combobox-item>
+          </calcite-combobox>
+          <button>OK</button>
+          <div></div>
+        </div>
       `);
       const chip = await page.find("calcite-combobox >>> calcite-chip");
       const eventSpy = await page.spyOnEvent("calciteComboboxChange");
@@ -3338,5 +3341,36 @@ describe("calcite-combobox", () => {
         },
       });
     });
+
+    describe("no-matches", () => {
+      themed(
+        async () => {
+          const page = await newE2EPage();
+          await page.setContent(`
+            <calcite-combobox open allow-custom-values>
+              <calcite-combobox-item value="Pine" text-label="Pine"></calcite-combobox-item>
+              <calcite-combobox-item value="Maple" text-label="Maple"></calcite-combobox-item>
+            </calcite-combobox>
+          `);
+
+          const combobox = await page.find("calcite-combobox");
+          combobox.setProperty("filterText", "Oak");
+          await page.waitForChanges();
+          await page.waitForTimeout(DEBOUNCE.filter);
+
+          return { tag: "calcite-combobox", page };
+        },
+        {
+          "--calcite-combobox-background-color": {
+            shadowSelector: `.${CSS.noMatches}`,
+            targetProp: "backgroundColor",
+          },
+          "--calcite-combobox-input-text-color": {
+            shadowSelector: `.${CSS.noMatches} >>> mark`,
+            targetProp: "color",
+          },
+        },
+      );
+    });
   });
 });
diff --git a/packages/calcite-components/src/components/combobox/combobox.scss b/packages/calcite-components/src/components/combobox/combobox.scss
index 6980026544b..a4033dc2d33 100644
--- a/packages/calcite-components/src/components/combobox/combobox.scss
+++ b/packages/calcite-components/src/components/combobox/combobox.scss
@@ -13,6 +13,15 @@
  * @prop --calcite-combobox-input-text-color: When `selectionDisplay` is `"single"`, specifies the text color of the component's input.
  */
 
+// AUTO-GENERATED — do not modify. Changes will be overwritten.
+//
+// Internal CSS custom properties for component use only. Overwriting is not recommended.
+//
+// --calcite-internal-close-size
+// --calcite-internal-combobox-input-margin-block
+// --calcite-internal-combobox-spacing-unit-l
+// --calcite-internal-combobox-spacing-unit-s
+
 :host {
   @apply relative block;
 }
@@ -250,6 +259,20 @@ calcite-chip {
   z-index: var(--calcite-z-index-sticky);
 }
 
+.no-matches {
+  padding-block: var(--calcite-internal-combobox-spacing-unit-s);
+  padding-inline: var(--calcite-internal-combobox-spacing-unit-l);
+
+  color: var(--calcite-combobox-input-text-color, var(--calcite-color-text-1));
+  background: var(--calcite-combobox-background-color, var(--calcite-color-foreground-1));
+  cursor: pointer;
+}
+
+.no-matches-placeholder {
+  color: var(--calcite-combobox-icon-color, var(--calcite-color-text-3));
+  cursor: default;
+}
+
 @include disabled();
 @include x-button(
   $background-color: "var(--calcite-close-background-color, var(--calcite-color-foreground-2))",
@@ -259,6 +282,7 @@ calcite-chip {
 @include form-validation-message();
 @include hidden-form-input();
 @include base-component();
+@include text-highlight-item();
 
 ::slotted(calcite-combobox-item-group:not(:first-child)) {
   padding-block-start: var(--calcite-internal-combobox-spacing-unit-l);
diff --git a/packages/calcite-components/src/components/combobox/combobox.stories.ts b/packages/calcite-components/src/components/combobox/combobox.stories.ts
index b3fd698ce55..2a65bd0dbbf 100644
--- a/packages/calcite-components/src/components/combobox/combobox.stories.ts
+++ b/packages/calcite-components/src/components/combobox/combobox.stories.ts
@@ -1030,6 +1030,35 @@ export const withDescriptionShortLabelAndContentSlots = (): string => html`
     <calcite-icon icon="number-circle-6" slot="content-end" scale="s"></calcite-icon>
   </calcite-combobox-item>
 `;
+
+export const noMatchesScaledOrAddCustomValue = (): string => html`
+  <div style="display: flex; gap: 48px; padding: 100px;">
+    <div style="display: flex; flex-direction: column; gap: 48px;">
+      <calcite-combobox open filter-text="Three" selection-mode="single" scale="s">
+        <calcite-combobox-item value="one" text-label="One"></calcite-combobox-item>
+        <calcite-combobox-item value="two" text-label="Two"></calcite-combobox-item>
+      </calcite-combobox>
+
+      <calcite-combobox open filter-text="Three" selection-mode="single" scale="m">
+        <calcite-combobox-item value="one" text-label="One"></calcite-combobox-item>
+        <calcite-combobox-item value="two" text-label="Two"></calcite-combobox-item>
+      </calcite-combobox>
+
+      <calcite-combobox open filter-text="Three" selection-mode="single" scale="l">
+        <calcite-combobox-item value="one" text-label="One"></calcite-combobox-item>
+        <calcite-combobox-item value="two" text-label="Two"></calcite-combobox-item>
+      </calcite-combobox>
+    </div>
+
+    <div>
+      <calcite-combobox open allow-custom-values filter-text="Three" selection-mode="single">
+        <calcite-combobox-item value="one" text-label="One"></calcite-combobox-item>
+        <calcite-combobox-item value="two" text-label="Two"></calcite-combobox-item>
+      </calcite-combobox>
+    </div>
+  </div>
+`;
+
 withDescriptionShortLabelAndContentSlots.args = {
   selectionMode: ["single", "multiple"],
 };
diff --git a/packages/calcite-components/src/components/combobox/combobox.tsx b/packages/calcite-components/src/components/combobox/combobox.tsx
index 6b7003688ef..779d150cda8 100644
--- a/packages/calcite-components/src/components/combobox/combobox.tsx
+++ b/packages/calcite-components/src/components/combobox/combobox.tsx
@@ -56,6 +56,7 @@ import { useT9n } from "../../controllers/useT9n";
 import type { Chip } from "../chip/chip";
 import type { ComboboxItemGroup as HTMLCalciteComboboxItemGroupElement } from "../combobox-item-group/combobox-item-group";
 import type { ComboboxItem as HTMLCalciteComboboxItemElement } from "../combobox-item/combobox-item";
+import { highlightText } from "../../utils/text";
 import type { Label } from "../label/label";
 import { useSetFocus } from "../../controllers/useSetFocus";
 import { useCancelable } from "../../controllers/useCancelable";
@@ -142,6 +143,8 @@ export class Combobox
         }
       });
 
+      this.noMatchesFound = this.filteredItems.length === 0 && !!this.filterText;
+
       this.filterTextMatchPattern =
         this.filterText && new RegExp(`(${escapeRegExp(this.filterText)})`, "i");
 
@@ -150,7 +153,7 @@ export class Combobox
       });
 
       if (setOpenToEmptyState) {
-        this.open = this.filterText.trim().length > 0 && this.keyboardNavItems.length > 0;
+        this.open = this.filterText.trim().length > 0;
       }
 
       if (emit) {
@@ -247,6 +250,29 @@ export class Combobox
 
   private focusSetter = useSetFocus<this>()(this);
 
+  private get effectiveFilterProps(): string[] {
+    if (!this.filterProps) {
+      return ["description", "label", "metadata", "shortHeading", "textLabel"];
+    }
+
+    return this.filterProps.filter((prop) => prop !== "el");
+  }
+
+  private get showingInlineIcon(): boolean {
+    const { placeholderIcon, selectionMode, selectedItems, open } = this;
+    const selectedItem = selectedItems[0];
+    const selectedIcon = selectedItem?.icon;
+    const singleSelectionMode = isSingleLike(selectionMode);
+
+    return !open && selectedItem
+      ? !!selectedIcon && singleSelectionMode
+      : !!placeholderIcon && (!selectedItem || singleSelectionMode);
+  }
+
+  private customChipAddHandler = (): void => {
+    this.addCustomChip(this.filterText, true);
+  };
+
   //#endregion
 
   //#region State Properties
@@ -288,6 +314,8 @@ export class Combobox
     return filteredItems;
   }
 
+  @state() noMatchesFound: boolean;
+
   //#endregion
 
   //#region Public Properties
@@ -636,29 +664,10 @@ export class Combobox
 
   //#region Private Methods
 
-  private get effectiveFilterProps(): string[] {
-    if (!this.filterProps) {
-      return ["description", "label", "metadata", "shortHeading", "textLabel"];
-    }
-
-    return this.filterProps.filter((prop) => prop !== "el");
-  }
-
   private emitComboboxChange(): void {
     this.calciteComboboxChange.emit();
   }
 
-  private get showingInlineIcon(): boolean {
-    const { placeholderIcon, selectionMode, selectedItems, open } = this;
-    const selectedItem = selectedItems[0];
-    const selectedIcon = selectedItem?.icon;
-    const singleSelectionMode = isSingleLike(selectionMode);
-
-    return !open && selectedItem
-      ? !!selectedIcon && singleSelectionMode
-      : !!placeholderIcon && (!selectedItem || singleSelectionMode);
-  }
-
   private filterTextChange(value: string): void {
     this.updateActiveItemIndex(-1);
     this.filterItems(value, true);
@@ -1789,13 +1798,15 @@ export class Combobox
   }
 
   private renderFloatingUIContainer(): JsxNode {
-    const { setFloatingEl, setContainerEl, open, scale } = this;
+    const { messages, setFloatingEl, setContainerEl, open, scale } = this;
     const classes = {
       [CSS.listContainer]: true,
       [FloatingCSS.animation]: true,
       [FloatingCSS.animationActive]: open,
     };
 
+    const label = (this.filterText && messages.add?.replace("{text}", `${this.filterText}`)) ?? "";
+
     return (
       <div ariaHidden="true" class={CSS.floatingUIContainer} ref={setFloatingEl}>
         <div class={classes} ref={setContainerEl}>
@@ -1807,16 +1818,35 @@ export class Combobox
                   class={CSS.selectAll}
                   id={`${this.guid}-select-all-enabled-interactive`}
                   indeterminate={this.indeterminate}
-                  label={this.messages.selectAll}
+                  label={messages.selectAll}
                   ref={this.selectAllComboboxItemReferenceEl}
                   scale={scale}
                   selected={this.allSelected}
                   tabIndex="-1"
-                  text-label={this.messages.selectAll}
+                  text-label={messages.selectAll}
                   value="select-all"
                 />
               )}
             <slot />
+            {this.noMatchesFound &&
+              (this.allowCustomValues ? (
+                <li
+                  aria-label={label}
+                  class={CSS.noMatches}
+                  onClick={this.customChipAddHandler}
+                  role="option"
+                  tabIndex={0}
+                >
+                  {highlightText({
+                    text: label,
+                    pattern: new RegExp(`(${escapeRegExp(this.filterText)})`, "i"),
+                  })}
+                </li>
+              ) : (
+                <li class={{ [CSS.noMatchesPlaceholder]: true, [CSS.noMatches]: true }}>
+                  {messages.noMatches}
+                </li>
+              ))}
           </ul>
         </div>
       </div>
diff --git a/packages/calcite-components/src/components/combobox/resources.ts b/packages/calcite-components/src/components/combobox/resources.ts
index 90414cbdf0f..4135247240a 100644
--- a/packages/calcite-components/src/components/combobox/resources.ts
+++ b/packages/calcite-components/src/components/combobox/resources.ts
@@ -12,6 +12,8 @@ export const CSS = {
   label: "label",
   labelIcon: "label--icon",
   listContainer: "list-container",
+  noMatches: "no-matches",
+  noMatchesPlaceholder: "no-matches-placeholder",
   placeholderIcon: "placeholder-icon",
   selectAll: "select-all",
   selectionDisplayFit: "selection-display--fit",
diff --git a/packages/calcite-components/src/custom-theme/combobox.ts b/packages/calcite-components/src/custom-theme/combobox.ts
index 4a1241dc696..d56ba5c8194 100644
--- a/packages/calcite-components/src/custom-theme/combobox.ts
+++ b/packages/calcite-components/src/custom-theme/combobox.ts
@@ -38,3 +38,10 @@ export const comboboxWithPlaceHolderIcon = html`<calcite-combobox label="test" p
   <calcite-combobox-item value="Sequoia" disabled text-label="Sequoia"></calcite-combobox-item>
   <calcite-combobox-item value="Douglas Fir" text-label="Douglas Fir"></calcite-combobox-item>
 </calcite-combobox>`;
+
+export const noMatches = html`
+  <calcite-combobox open filter-text="Three" selection-mode="single">
+    <calcite-combobox-item value="one" text-label="One"></calcite-combobox-item>
+    <calcite-combobox-item value="two" text-label="Two"></calcite-combobox-item>
+  </calcite-combobox>
+`;