diff --git a/.changeset/perfect-donkeys-cry.md b/.changeset/perfect-donkeys-cry.md
new file mode 100644
index 0000000000..744dc19d64
--- /dev/null
+++ b/.changeset/perfect-donkeys-cry.md
@@ -0,0 +1,5 @@
+---
+'@backstage/core-components': patch
+---
+
+Added `exact` prop to `SidebarSubmenuItem` which causes it to only highlight if the current location is an exact match.
diff --git a/packages/core-components/api-report.md b/packages/core-components/api-report.md
index 9f4aca1dcf..df34abdd03 100644
--- a/packages/core-components/api-report.md
+++ b/packages/core-components/api-report.md
@@ -1087,6 +1087,7 @@ export type SidebarSubmenuItemProps = {
   to?: string;
   icon?: IconComponent;
   dropdownItems?: SidebarSubmenuItemDropdownItem[];
+  exact?: boolean;
 };
 
 // @public
diff --git a/packages/core-components/src/layout/Sidebar/SidebarSubmenuItem.tsx b/packages/core-components/src/layout/Sidebar/SidebarSubmenuItem.tsx
index b08647d335..d05ee23636 100644
--- a/packages/core-components/src/layout/Sidebar/SidebarSubmenuItem.tsx
+++ b/packages/core-components/src/layout/Sidebar/SidebarSubmenuItem.tsx
@@ -130,6 +130,7 @@ export type SidebarSubmenuItemProps = {
   to?: string;
   icon?: IconComponent;
   dropdownItems?: SidebarSubmenuItemDropdownItem[];
+  exact?: boolean;
 };
 
 /**
@@ -138,7 +139,7 @@ export type SidebarSubmenuItemProps = {
  * @public
  */
 export const SidebarSubmenuItem = (props: SidebarSubmenuItemProps) => {
-  const { title, subtitle, to, icon: Icon, dropdownItems } = props;
+  const { title, subtitle, to, icon: Icon, dropdownItems, exact } = props;
   const classes = useStyles();
   const { setIsHoveredOn } = useContext(SidebarItemWithSubmenuContext);
   const closeSubmenu = () => {
@@ -146,7 +147,7 @@ export const SidebarSubmenuItem = (props: SidebarSubmenuItemProps) => {
   };
   const toLocation = useResolvedPath(to ?? '');
   const currentLocation = useLocation();
-  let isActive = isLocationMatch(currentLocation, toLocation);
+  let isActive = isLocationMatch(currentLocation, toLocation, exact);
 
   const [showDropDown, setShowDropDown] = useState(false);
   const handleClickDropdown = () => {
@@ -155,7 +156,7 @@ export const SidebarSubmenuItem = (props: SidebarSubmenuItemProps) => {
   if (dropdownItems !== undefined) {
     dropdownItems.some(item => {
       const resolvedPath = resolvePath(item.to);
-      isActive = isLocationMatch(currentLocation, resolvedPath);
+      isActive = isLocationMatch(currentLocation, resolvedPath, exact);
       return isActive;
     });
     return (
diff --git a/packages/core-components/src/layout/Sidebar/utils.test.ts b/packages/core-components/src/layout/Sidebar/utils.test.ts
index b08dcda0fc..976108a63d 100644
--- a/packages/core-components/src/layout/Sidebar/utils.test.ts
+++ b/packages/core-components/src/layout/Sidebar/utils.test.ts
@@ -95,4 +95,30 @@ describe('isLocationMatching', () => {
     toLocation = { pathname: '/catalog', search: '', hash: '' };
     expect(isLocationMatch(currentLocation, toLocation)).toBe(true);
   });
+
+  describe('exact matching', () => {
+    it('return false when target query parameters are subset of current location query parameters', async () => {
+      currentLocation = {
+        pathname: '/catalog',
+        search: '?x=foo&y=bar',
+        state: null,
+        hash: '',
+        key: '',
+      };
+      toLocation = { pathname: '/catalog', search: '?x=foo', hash: '' };
+      expect(isLocationMatch(currentLocation, toLocation, true)).toBe(false);
+    });
+
+    it('return true when target query parameters are exact match with current location query parameters', async () => {
+      currentLocation = {
+        pathname: '/catalog',
+        search: '?x=foo&y=bar',
+        state: null,
+        hash: '',
+        key: '',
+      };
+      toLocation = { pathname: '/catalog', search: '?y=bar&x=foo', hash: '' };
+      expect(isLocationMatch(currentLocation, toLocation, true)).toBe(true);
+    });
+  });
 });
diff --git a/packages/core-components/src/layout/Sidebar/utils.ts b/packages/core-components/src/layout/Sidebar/utils.ts
index 1afebe796d..5dba73f4cd 100644
--- a/packages/core-components/src/layout/Sidebar/utils.ts
+++ b/packages/core-components/src/layout/Sidebar/utils.ts
@@ -18,7 +18,11 @@ import { Location, Path } from 'history';
 import { isEqual, isMatch } from 'lodash';
 import qs from 'qs';
 
-export function isLocationMatch(currentLocation: Location, toLocation: Path) {
+export function isLocationMatch(
+  currentLocation: Location,
+  toLocation: Path,
+  exact: boolean = false,
+) {
   const toDecodedSearch = new URLSearchParams(toLocation.search).toString();
   const toQueryParameters = qs.parse(toDecodedSearch);
 
@@ -27,9 +31,11 @@ export function isLocationMatch(currentLocation: Location, toLocation: Path) {
   ).toString();
   const currentQueryParameters = qs.parse(currentDecodedSearch);
 
+  const queryStringMatcher = exact ? isEqual : isMatch;
+
   const matching =
     isEqual(toLocation.pathname, currentLocation.pathname) &&
-    isMatch(currentQueryParameters, toQueryParameters);
+    queryStringMatcher(currentQueryParameters, toQueryParameters);
 
   return matching;
 }