diff --git a/app/assets/javascripts/components/AutocompleteTagHint.tsx b/app/assets/javascripts/components/AutocompleteTagHint.tsx
index 84c172196..d4bfd6c6c 100644
--- a/app/assets/javascripts/components/AutocompleteTagHint.tsx
+++ b/app/assets/javascripts/components/AutocompleteTagHint.tsx
@@ -1,5 +1,6 @@
 import { AppState } from '@/ui_models/app_state';
 import { observer } from 'mobx-react-lite';
+import { useRef, useEffect } from 'preact/hooks';
 import { Icon } from './Icon';
 
 type Props = {
@@ -9,6 +10,10 @@ type Props = {
 
 export const AutocompleteTagHint = observer(
   ({ appState, closeOnBlur }: Props) => {
+    const { autocompleteTagHintFocused } = appState.noteTags;
+
+    const hintRef = useRef<HTMLButtonElement>();
+
     const { autocompleteSearchQuery, autocompleteTagResults } =
       appState.noteTags;
 
@@ -16,16 +21,46 @@ export const AutocompleteTagHint = observer(
       await appState.noteTags.createAndAddNewTag();
     };
 
+    const onFocus = () => {
+      appState.noteTags.setAutocompleteTagHintFocused(true);
+    };
+
+    const onBlur = (event: FocusEvent) => {
+      closeOnBlur(event);
+      appState.noteTags.setAutocompleteTagHintFocused(false);
+    };
+
+    const onKeyDown = (event: KeyboardEvent) => {
+      if (event.key === 'ArrowUp') {
+        if (autocompleteTagResults.length > 0) {
+          const lastTagResult =
+            autocompleteTagResults[autocompleteTagResults.length - 1];
+          appState.noteTags.setFocusedTagResultUuid(lastTagResult.uuid);
+        } else {
+          appState.noteTags.setAutocompleteInputFocused(true);
+        }
+      }
+    };
+
+    useEffect(() => {
+      if (autocompleteTagHintFocused) {
+        hintRef.current.focus();
+      }
+    }, [appState.noteTags, autocompleteTagHintFocused]);
+
     return (
       <>
         {autocompleteTagResults.length > 0 && (
           <div className="h-1px my-2 bg-border"></div>
         )}
         <button
+          ref={hintRef}
           type="button"
           className="sn-dropdown-item"
           onClick={onTagHintClick}
-          onBlur={closeOnBlur}
+          onFocus={onFocus}
+          onBlur={onBlur}
+          onKeyDown={onKeyDown}
         >
           <span>Create new tag:</span>
           <span className="bg-contrast rounded text-xs color-text py-1 pl-1 pr-2 flex items-center ml-2">
diff --git a/app/assets/javascripts/components/AutocompleteTagInput.tsx b/app/assets/javascripts/components/AutocompleteTagInput.tsx
index 2b513294c..9d5bedaf1 100644
--- a/app/assets/javascripts/components/AutocompleteTagInput.tsx
+++ b/app/assets/javascripts/components/AutocompleteTagInput.tsx
@@ -61,6 +61,8 @@ export const AutocompleteTagInput = observer(({ appState }: Props) => {
         event.preventDefault();
         if (autocompleteTagResults.length > 0) {
           appState.noteTags.setFocusedTagResultUuid(autocompleteTagResults[0].uuid);
+        } else if (autocompleteTagHintVisible) {
+          appState.noteTags.setAutocompleteTagHintFocused(true);
         }
         break;
       default:
diff --git a/app/assets/javascripts/components/AutocompleteTagResult.tsx b/app/assets/javascripts/components/AutocompleteTagResult.tsx
index b587bd5b2..0a7cf9cb8 100644
--- a/app/assets/javascripts/components/AutocompleteTagResult.tsx
+++ b/app/assets/javascripts/components/AutocompleteTagResult.tsx
@@ -12,7 +12,12 @@ type Props = {
 
 export const AutocompleteTagResult = observer(
   ({ appState, tagResult, closeOnBlur }: Props) => {
-    const { autocompleteSearchQuery, autocompleteTagResults, focusedTagResultUuid } = appState.noteTags;
+    const {
+      autocompleteSearchQuery,
+      autocompleteTagHintVisible,
+      autocompleteTagResults,
+      focusedTagResultUuid,
+    } = appState.noteTags;
 
     const tagResultRef = useRef<HTMLButtonElement>();
 
@@ -23,7 +28,10 @@ export const AutocompleteTagResult = observer(
     };
 
     const onKeyDown = (event: KeyboardEvent) => {
-      const tagResultIndex = appState.noteTags.getTagIndex(tagResult, autocompleteTagResults);
+      const tagResultIndex = appState.noteTags.getTagIndex(
+        tagResult,
+        autocompleteTagResults
+      );
       switch (event.key) {
         case 'ArrowUp':
           event.preventDefault();
@@ -35,7 +43,14 @@ export const AutocompleteTagResult = observer(
           break;
         case 'ArrowDown':
           event.preventDefault();
-          appState.noteTags.focusNextTagResult(tagResult);
+          if (
+            tagResultIndex === autocompleteTagResults.length - 1 &&
+            autocompleteTagHintVisible
+          ) {
+            appState.noteTags.setAutocompleteTagHintFocused(true);
+          } else {
+            appState.noteTags.focusNextTagResult(tagResult);
+          }
           break;
         default:
           return;
diff --git a/app/assets/javascripts/ui_models/app_state/note_tags_state.ts b/app/assets/javascripts/ui_models/app_state/note_tags_state.ts
index d3c6da6e0..1c3317f5f 100644
--- a/app/assets/javascripts/ui_models/app_state/note_tags_state.ts
+++ b/app/assets/javascripts/ui_models/app_state/note_tags_state.ts
@@ -6,6 +6,7 @@ import { AppState } from './app_state';
 export class NoteTagsState {
   autocompleteInputFocused = false;
   autocompleteSearchQuery = '';
+  autocompleteTagHintFocused = false;
   autocompleteTagResults: SNTag[] = [];
   focusedTagResultUuid: UuidString | undefined = undefined;
   focusedTagUuid: UuidString | undefined = undefined;
@@ -20,6 +21,7 @@ export class NoteTagsState {
     makeObservable(this, {
       autocompleteInputFocused: observable,
       autocompleteSearchQuery: observable,
+      autocompleteTagHintFocused: observable,
       autocompleteTagResults: observable,
       focusedTagUuid: observable,
       focusedTagResultUuid: observable,
@@ -33,6 +35,7 @@ export class NoteTagsState {
       focusPreviousTag: action,
       setAutocompleteInputFocused: action,
       setAutocompleteSearchQuery: action,
+      setAutocompleteTagHintFocused: action,
       setAutocompleteTagResults: action,
       setFocusedTagResultUuid: action,
       setFocusedTagUuid: action,
@@ -69,6 +72,10 @@ export class NoteTagsState {
     this.autocompleteSearchQuery = query;
   }
 
+  setAutocompleteTagHintFocused(focused: boolean): void {
+    this.autocompleteTagHintFocused = focused;
+  }
+
   setAutocompleteTagResults(results: SNTag[]): void {
     this.autocompleteTagResults = results;
   }