diff --git a/.changeset/little-ligers-cheat.md b/.changeset/little-ligers-cheat.md
new file mode 100644
index 0000000000..30b4238c59
--- /dev/null
+++ b/.changeset/little-ligers-cheat.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-scaffolder': patch
+---
+
+Make entity picker more reliable with only one available entity
diff --git a/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx b/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
index 0f698919d5..0d45fe771c 100644
--- a/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
+++ b/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
@@ -123,11 +123,17 @@ export const EntityPicker = (props: EntityPickerProps) => {
     [onChange, formData, defaultKind, defaultNamespace, allowArbitraryValues],
   );
 
+  // Since free solo can be enabled, attempt to parse as a full entity ref first, then fall
+  // back to the given value.
+  const selectedEntity =
+    entities?.find(e => stringifyEntityRef(e) === formData) ??
+    (allowArbitraryValues && formData ? getLabel(formData) : '');
+
   useEffect(() => {
-    if (entities?.length === 1) {
+    if (entities?.length === 1 && selectedEntity === '') {
       onChange(stringifyEntityRef(entities[0]));
     }
-  }, [entities, onChange]);
+  }, [entities, onChange, selectedEntity]);
 
   return (
     <FormControl
@@ -138,12 +144,7 @@ export const EntityPicker = (props: EntityPickerProps) => {
       <Autocomplete
         disabled={entities?.length === 1}
         id={idSchema?.$id}
-        value={
-          // Since free solo can be enabled, attempt to parse as a full entity ref first, then fall
-          //  back to the given value.
-          entities?.find(e => stringifyEntityRef(e) === formData) ??
-          (allowArbitraryValues && formData ? getLabel(formData) : '')
-        }
+        value={selectedEntity}
         loading={loading}
         onChange={onSelect}
         options={entities || []}