diff --git a/.changeset/upset-papayas-flash.md b/.changeset/upset-papayas-flash.md
new file mode 100644
index 0000000000..fae7347e0d
--- /dev/null
+++ b/.changeset/upset-papayas-flash.md
@@ -0,0 +1,5 @@
+---
+'@backstage/canon': patch
+---
+
+Update Menu component in Canon to make the UI more condensed. We are also adding a new Combobox option for nested navigation.
diff --git a/canon-docs/src/app/(docs)/components/menu/page.mdx b/canon-docs/src/app/(docs)/components/menu/page.mdx
index 98c4949438..524db26cd1 100644
--- a/canon-docs/src/app/(docs)/components/menu/page.mdx
+++ b/canon-docs/src/app/(docs)/components/menu/page.mdx
@@ -155,3 +155,48 @@ You can additionally configure how quickly the menu opens on hover using the `de
     </Menu.Portal>
   </Menu.Root>`}
 />
+
+### Nested navigation
+
+You can nest menus to create a more complex navigation structure.
+
+<Snippet
+  align="center"
+  py={4}
+  open
+  preview={<MenuSnippet story="Submenu" />}
+  code={`<Menu.Trigger
+    render={props => (
+      <Button
+        {...props}
+        size="small"
+        variant="secondary"
+        iconEnd={<Icon name="chevron-down" />}
+      >
+        Menu
+      </Button>
+    )}
+  />
+  <Menu.Portal>
+    <Menu.Positioner sideOffset={8} align="start">
+      <Menu.Popup>
+        <Menu.Item>Settings</Menu.Item>
+        <Menu.Item>Invite new members</Menu.Item>
+        <Menu.Item>Download app</Menu.Item>
+        <Menu.Item>Log out</Menu.Item>
+        <Menu.Root>
+          <Menu.SubmenuTrigger>Submenu</Menu.SubmenuTrigger>
+          <Menu.Portal>
+            <Menu.Positioner>
+              <Menu.Popup>
+                <Menu.Item>Submenu Item 1</Menu.Item>
+                <Menu.Item>Submenu Item 2</Menu.Item>
+                <Menu.Item>Submenu Item 3</Menu.Item>
+              </Menu.Popup>
+            </Menu.Positioner>
+          </Menu.Portal>
+        </Menu.Root>
+      </Menu.Popup>
+    </Menu.Positioner>
+  </Menu.Portal>`}
+/>
diff --git a/packages/canon/css/components.css b/packages/canon/css/components.css
index 23133c9966..124d575a96 100644
--- a/packages/canon/css/components.css
+++ b/packages/canon/css/components.css
@@ -695,16 +695,20 @@
 }
 
 .canon-MenuPopup {
-  padding: var(--canon-space-2);
   background-color: var(--canon-bg-surface-1);
   border: 1px solid var(--canon-border);
   color: var(--canon-fg-primary);
   transform-origin: var(--transform-origin);
+  max-width: min(var(--available-width), 340px);
+  max-height: min(var(--available-height), 500px);
+  padding-bottom: var(--canon-space-1);
   border-radius: .375rem;
   outline: none;
-  max-width: 340px;
+  flex-direction: column;
   transition: transform .15s, opacity .15s;
-  overflow: hidden;
+  display: flex;
+  position: relative;
+  overflow: auto;
 
   &[data-starting-style], &[data-ending-style] {
     opacity: 0;
@@ -713,26 +717,61 @@
 }
 
 .canon-MenuItem {
-  cursor: default;
   user-select: none;
+  align-items: center;
   gap: var(--canon-space-2);
+  height: 32px;
   color: var(--canon-fg-primary);
   border-radius: var(--canon-radius-2);
-  padding: var(--canon-space-2) var(--canon-space-2);
-  padding-right: var(--canon-space-4);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
   cursor: pointer;
   outline: 0;
+  flex-shrink: 0;
   text-decoration: none;
   display: flex;
 
-  &:last-child {
-    border-bottom: none;
+  &:first-child {
+    margin-top: var(--canon-space-1);
   }
 
   &[data-highlighted] {
-    z-index: 0;
-    background-color: var(--canon-bg-tint-hover);
-    position: relative;
+    background-color: var(--canon-gray-3);
+  }
+}
+
+.canon-MenuSubmenuTrigger {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  & .canon-Icon {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:first-child {
+    margin-top: var(--canon-space-1);
+  }
+
+  &[data-popup-open], &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+
+    & .canon-Icon {
+      color: var(--canon-fg-primary);
+    }
   }
 }
 
@@ -742,6 +781,93 @@
   margin: .375rem 1rem;
 }
 
+.canon-SubmenuComboboxSearch {
+  padding-inline: var(--canon-space-3);
+  border: none;
+  border-bottom: 1px solid var(--canon-border);
+  background-color: var(--canon-bg-surface-1);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  line-height: 140%;
+  font-size: var(--canon-font-size-3);
+  z-index: 1;
+  outline: none;
+  position: sticky;
+  top: 0;
+
+  &::placeholder {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:disabled {
+    opacity: .6;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItems {
+  padding-top: var(--canon-space-2);
+  outline: none;
+  flex-direction: column;
+  display: flex;
+  overflow-y: auto;
+}
+
+.canon-SubmenuComboboxNoResults {
+  padding-inline: var(--canon-space-3);
+  padding-top: var(--canon-space-2);
+  padding-bottom: var(--canon-space-4);
+  color: var(--canon-fg-secondary);
+  font-size: var(--canon-font-size-3);
+}
+
+.canon-SubmenuComboboxItem {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+  }
+
+  &[data-disabled] {
+    opacity: .5;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItemCheckbox {
+  width: 16px;
+  height: 16px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  border: 1px solid var(--canon-border);
+  background: var(--canon-bg-surface-1);
+  flex-shrink: 0;
+  justify-content: center;
+  align-items: center;
+  display: flex;
+}
+
+.canon-SubmenuComboboxItemLabel {
+  text-overflow: ellipsis;
+  white-space: nowrap;
+  flex: 1;
+  overflow: hidden;
+}
+
 .canon-Link {
   font-family: var(--canon-font-regular);
   color: var(--canon-fg-link);
diff --git a/packages/canon/css/menu.css b/packages/canon/css/menu.css
index de811cde77..4c9433275c 100644
--- a/packages/canon/css/menu.css
+++ b/packages/canon/css/menu.css
@@ -3,16 +3,20 @@
 }
 
 .canon-MenuPopup {
-  padding: var(--canon-space-2);
   background-color: var(--canon-bg-surface-1);
   border: 1px solid var(--canon-border);
   color: var(--canon-fg-primary);
   transform-origin: var(--transform-origin);
+  max-width: min(var(--available-width), 340px);
+  max-height: min(var(--available-height), 500px);
+  padding-bottom: var(--canon-space-1);
   border-radius: .375rem;
   outline: none;
-  max-width: 340px;
+  flex-direction: column;
   transition: transform .15s, opacity .15s;
-  overflow: hidden;
+  display: flex;
+  position: relative;
+  overflow: auto;
 
   &[data-starting-style], &[data-ending-style] {
     opacity: 0;
@@ -21,26 +25,61 @@
 }
 
 .canon-MenuItem {
-  cursor: default;
   user-select: none;
+  align-items: center;
   gap: var(--canon-space-2);
+  height: 32px;
   color: var(--canon-fg-primary);
   border-radius: var(--canon-radius-2);
-  padding: var(--canon-space-2) var(--canon-space-2);
-  padding-right: var(--canon-space-4);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
   cursor: pointer;
   outline: 0;
+  flex-shrink: 0;
   text-decoration: none;
   display: flex;
 
-  &:last-child {
-    border-bottom: none;
+  &:first-child {
+    margin-top: var(--canon-space-1);
   }
 
   &[data-highlighted] {
-    z-index: 0;
-    background-color: var(--canon-bg-tint-hover);
-    position: relative;
+    background-color: var(--canon-gray-3);
+  }
+}
+
+.canon-MenuSubmenuTrigger {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  & .canon-Icon {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:first-child {
+    margin-top: var(--canon-space-1);
+  }
+
+  &[data-popup-open], &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+
+    & .canon-Icon {
+      color: var(--canon-fg-primary);
+    }
   }
 }
 
@@ -49,3 +88,90 @@
   height: 1px;
   margin: .375rem 1rem;
 }
+
+.canon-SubmenuComboboxSearch {
+  padding-inline: var(--canon-space-3);
+  border: none;
+  border-bottom: 1px solid var(--canon-border);
+  background-color: var(--canon-bg-surface-1);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  line-height: 140%;
+  font-size: var(--canon-font-size-3);
+  z-index: 1;
+  outline: none;
+  position: sticky;
+  top: 0;
+
+  &::placeholder {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:disabled {
+    opacity: .6;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItems {
+  padding-top: var(--canon-space-2);
+  outline: none;
+  flex-direction: column;
+  display: flex;
+  overflow-y: auto;
+}
+
+.canon-SubmenuComboboxNoResults {
+  padding-inline: var(--canon-space-3);
+  padding-top: var(--canon-space-2);
+  padding-bottom: var(--canon-space-4);
+  color: var(--canon-fg-secondary);
+  font-size: var(--canon-font-size-3);
+}
+
+.canon-SubmenuComboboxItem {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+  }
+
+  &[data-disabled] {
+    opacity: .5;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItemCheckbox {
+  width: 16px;
+  height: 16px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  border: 1px solid var(--canon-border);
+  background: var(--canon-bg-surface-1);
+  flex-shrink: 0;
+  justify-content: center;
+  align-items: center;
+  display: flex;
+}
+
+.canon-SubmenuComboboxItemLabel {
+  text-overflow: ellipsis;
+  white-space: nowrap;
+  flex: 1;
+  overflow: hidden;
+}
diff --git a/packages/canon/css/styles.css b/packages/canon/css/styles.css
index 42d47267f8..084aef2855 100644
--- a/packages/canon/css/styles.css
+++ b/packages/canon/css/styles.css
@@ -9919,16 +9919,20 @@
 }
 
 .canon-MenuPopup {
-  padding: var(--canon-space-2);
   background-color: var(--canon-bg-surface-1);
   border: 1px solid var(--canon-border);
   color: var(--canon-fg-primary);
   transform-origin: var(--transform-origin);
+  max-width: min(var(--available-width), 340px);
+  max-height: min(var(--available-height), 500px);
+  padding-bottom: var(--canon-space-1);
   border-radius: .375rem;
   outline: none;
-  max-width: 340px;
+  flex-direction: column;
   transition: transform .15s, opacity .15s;
-  overflow: hidden;
+  display: flex;
+  position: relative;
+  overflow: auto;
 
   &[data-starting-style], &[data-ending-style] {
     opacity: 0;
@@ -9937,26 +9941,61 @@
 }
 
 .canon-MenuItem {
-  cursor: default;
   user-select: none;
+  align-items: center;
   gap: var(--canon-space-2);
+  height: 32px;
   color: var(--canon-fg-primary);
   border-radius: var(--canon-radius-2);
-  padding: var(--canon-space-2) var(--canon-space-2);
-  padding-right: var(--canon-space-4);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
   cursor: pointer;
   outline: 0;
+  flex-shrink: 0;
   text-decoration: none;
   display: flex;
 
-  &:last-child {
-    border-bottom: none;
+  &:first-child {
+    margin-top: var(--canon-space-1);
   }
 
   &[data-highlighted] {
-    z-index: 0;
-    background-color: var(--canon-bg-tint-hover);
-    position: relative;
+    background-color: var(--canon-gray-3);
+  }
+}
+
+.canon-MenuSubmenuTrigger {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  & .canon-Icon {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:first-child {
+    margin-top: var(--canon-space-1);
+  }
+
+  &[data-popup-open], &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+
+    & .canon-Icon {
+      color: var(--canon-fg-primary);
+    }
   }
 }
 
@@ -9966,6 +10005,93 @@
   margin: .375rem 1rem;
 }
 
+.canon-SubmenuComboboxSearch {
+  padding-inline: var(--canon-space-3);
+  border: none;
+  border-bottom: 1px solid var(--canon-border);
+  background-color: var(--canon-bg-surface-1);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  line-height: 140%;
+  font-size: var(--canon-font-size-3);
+  z-index: 1;
+  outline: none;
+  position: sticky;
+  top: 0;
+
+  &::placeholder {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:disabled {
+    opacity: .6;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItems {
+  padding-top: var(--canon-space-2);
+  outline: none;
+  flex-direction: column;
+  display: flex;
+  overflow-y: auto;
+}
+
+.canon-SubmenuComboboxNoResults {
+  padding-inline: var(--canon-space-3);
+  padding-top: var(--canon-space-2);
+  padding-bottom: var(--canon-space-4);
+  color: var(--canon-fg-secondary);
+  font-size: var(--canon-font-size-3);
+}
+
+.canon-SubmenuComboboxItem {
+  user-select: none;
+  justify-content: space-between;
+  align-items: center;
+  gap: var(--canon-space-2);
+  height: 32px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  outline: 0;
+  flex-shrink: 0;
+  text-decoration: none;
+  display: flex;
+
+  &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+  }
+
+  &[data-disabled] {
+    opacity: .5;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItemCheckbox {
+  width: 16px;
+  height: 16px;
+  color: var(--canon-fg-primary);
+  border-radius: var(--canon-radius-2);
+  border: 1px solid var(--canon-border);
+  background: var(--canon-bg-surface-1);
+  flex-shrink: 0;
+  justify-content: center;
+  align-items: center;
+  display: flex;
+}
+
+.canon-SubmenuComboboxItemLabel {
+  text-overflow: ellipsis;
+  white-space: nowrap;
+  flex: 1;
+  overflow: hidden;
+}
+
 .canon-Link {
   font-family: var(--canon-font-regular);
   color: var(--canon-fg-link);
diff --git a/packages/canon/report.api.md b/packages/canon/report.api.md
index ecfdfde188..ff8c36e5ec 100644
--- a/packages/canon/report.api.md
+++ b/packages/canon/report.api.md
@@ -7,6 +7,7 @@ import { Avatar as Avatar_2 } from '@base-ui-components/react/avatar';
 import { Breakpoint as Breakpoint_2 } from '@backstage/canon';
 import { ChangeEvent } from 'react';
 import { Collapsible as Collapsible_2 } from '@base-ui-components/react/collapsible';
+import { ComponentProps } from 'react';
 import { Context } from 'react';
 import type { CSSProperties } from 'react';
 import { FC } from 'react';
@@ -893,6 +894,27 @@ export type MarginProps = GetPropDefTypes<typeof marginPropDefs>;
 // @public (undocumented)
 export const Menu: MenuComponent;
 
+// @public (undocumented)
+export type MenuComboboxOption = {
+  label: string;
+  value: string;
+  disabled?: boolean;
+};
+
+// @public (undocumented)
+export interface MenuComboboxProps extends ComponentProps<'div'> {
+  // (undocumented)
+  closeParentOnEsc?: boolean;
+  // (undocumented)
+  multiselect?: boolean;
+  // (undocumented)
+  onValueChange?: (value: string[]) => void;
+  // (undocumented)
+  options: MenuComboboxOption[];
+  // (undocumented)
+  value?: string[];
+}
+
 // @public (undocumented)
 export type MenuComponent = {
   Root: typeof Menu_2.Root;
@@ -912,6 +934,9 @@ export type MenuComponent = {
   CheckboxItemIndicator: typeof Menu_2.CheckboxItemIndicator;
   SubmenuTrigger: typeof Menu_2.SubmenuTrigger;
   Separator: typeof Menu_2.Separator;
+  Combobox: ForwardRefExoticComponent<
+    MenuComboboxProps & RefAttributes<HTMLDivElement>
+  >;
 };
 
 // @public (undocumented)
diff --git a/packages/canon/src/components/Menu/Combobox.tsx b/packages/canon/src/components/Menu/Combobox.tsx
new file mode 100644
index 0000000000..c9593ed2a4
--- /dev/null
+++ b/packages/canon/src/components/Menu/Combobox.tsx
@@ -0,0 +1,245 @@
+/*
+ * Copyright 2025 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import {
+  forwardRef,
+  useState,
+  useMemo,
+  useCallback,
+  useId,
+  ChangeEvent,
+  KeyboardEvent,
+  useRef,
+  useEffect,
+} from 'react';
+import clsx from 'clsx';
+import { MenuComboboxOption, MenuComboboxProps } from './types';
+import { Icon } from '@backstage/canon';
+
+const getListboxItemId = (listboxId: string, optionValue: string): string =>
+  `${listboxId}-option-${optionValue}`;
+
+// Internal component for rendering individual items
+function ComboboxItem({
+  option,
+  optionIndex,
+  value,
+  activeOptionIndex,
+  onItemActive,
+  onItemSelect,
+  listboxId,
+}: {
+  option: MenuComboboxOption;
+  optionIndex: number;
+  value?: string[];
+  activeOptionIndex: number;
+  onItemActive: (index: number) => void;
+  onItemSelect: (value: string) => void;
+  listboxId: string;
+}) {
+  const isSelected = value?.includes(option.value) ?? false;
+  const isHighlighted = optionIndex === activeOptionIndex;
+  const itemId = getListboxItemId(listboxId, option.value);
+
+  const itemRef = useRef<HTMLDivElement>(null);
+
+  // Scroll the item into view when it becomes highlighted
+  useEffect(() => {
+    if (isHighlighted && itemRef.current) {
+      itemRef.current.scrollIntoView({ block: 'nearest' });
+    }
+  }, [isHighlighted]);
+
+  return (
+    <div
+      ref={itemRef}
+      className="canon-SubmenuComboboxItem"
+      id={itemId}
+      role="option"
+      aria-selected={isSelected}
+      data-highlighted={isHighlighted ? true : undefined}
+      data-selected={isSelected ? true : undefined}
+      data-disabled={option.disabled ? true : undefined}
+      onMouseOver={() => !option.disabled && onItemActive(optionIndex)}
+      onClick={() => !option.disabled && onItemSelect(option.value)}
+    >
+      <div className="canon-SubmenuComboboxItemCheckbox">
+        {isSelected && <Icon aria-hidden="true" name="check" size={12} />}
+      </div>
+      <div className="canon-SubmenuComboboxItemLabel">{option.label}</div>
+    </div>
+  );
+}
+
+/** @public */
+export const Combobox = forwardRef<HTMLDivElement, MenuComboboxProps>(
+  (props, ref) => {
+    const {
+      options,
+      value,
+      onValueChange,
+      multiselect = false,
+      className,
+      ...rest
+    } = props;
+
+    const triggerId = useId();
+    const listboxId = `${triggerId}-listbox`;
+
+    // State management
+    const [filterString, setFilterString] = useState<string>('');
+    const [activeOptionIndex, setActiveOptionIndex] = useState<number>(0);
+
+    // Filter options based on input
+    const filteredOptions = useMemo(() => {
+      if (!filterString) return options;
+      const lowerFilterString = filterString.toLocaleLowerCase('en-US');
+      return options.filter(option =>
+        option.label.toLocaleLowerCase('en-US').includes(lowerFilterString),
+      );
+    }, [filterString, options]);
+
+    // Get the active descendant ID for accessibility
+    const activeDescendantId =
+      activeOptionIndex >= 0 && filteredOptions.length > 0
+        ? getListboxItemId(listboxId, filteredOptions[activeOptionIndex].value)
+        : undefined;
+
+    const handleValueChange = useCallback(
+      (toggledValue: string) => {
+        let newValue: string[];
+        if (multiselect) {
+          newValue = value?.includes(toggledValue)
+            ? value.filter(v => v !== toggledValue)
+            : [...(value ?? []), toggledValue];
+        } else {
+          newValue = value?.includes(toggledValue) ? [] : [toggledValue];
+        }
+
+        onValueChange?.(newValue);
+      },
+      [multiselect, onValueChange, value],
+    );
+
+    const handleSearchChange = useCallback(
+      (e: ChangeEvent<HTMLInputElement>) => {
+        setFilterString(e.target.value);
+        setActiveOptionIndex(0);
+        e.preventDefault();
+      },
+      [],
+    );
+
+    const handleKeyDown = useCallback(
+      (e: KeyboardEvent) => {
+        let wasEscapeKey = false;
+        switch (e.key) {
+          case 'ArrowDown':
+            e.preventDefault();
+            setActiveOptionIndex(prev =>
+              Math.min(prev + 1, filteredOptions.length - 1),
+            );
+            break;
+          case 'ArrowUp':
+            e.preventDefault();
+            setActiveOptionIndex(prev => Math.max(prev - 1, 0));
+            break;
+          case 'Home':
+            e.preventDefault();
+            setActiveOptionIndex(0);
+            break;
+          case 'End':
+            e.preventDefault();
+            setActiveOptionIndex(Math.max(filteredOptions.length - 1, 0));
+            break;
+          case 'Enter':
+            e.preventDefault();
+            if (
+              activeOptionIndex >= 0 &&
+              !filteredOptions[activeOptionIndex].disabled
+            ) {
+              handleValueChange(filteredOptions[activeOptionIndex].value);
+            }
+            break;
+          case 'Escape':
+            // The Menu component should handle this
+            wasEscapeKey = true;
+            break;
+          default:
+            break;
+        }
+
+        if (!wasEscapeKey) {
+          // Stop propagation so Menu components don't prevent the input from updating
+          e.stopPropagation();
+        }
+      },
+      [filteredOptions, activeOptionIndex, handleValueChange],
+    );
+
+    return (
+      <div
+        ref={ref}
+        role="combobox"
+        className={clsx('canon-MenuCombobox', className)}
+        {...rest}
+      >
+        <input
+          className="canon-SubmenuComboboxSearch"
+          type="text"
+          role="combobox"
+          placeholder="Filter..."
+          aria-labelledby={triggerId}
+          aria-controls={listboxId}
+          aria-autocomplete="list"
+          aria-activedescendant={activeDescendantId}
+          aria-expanded="true"
+          aria-haspopup="listbox"
+          value={filterString}
+          onKeyDown={handleKeyDown}
+          onChange={handleSearchChange}
+        />
+        <div
+          role="listbox"
+          id={listboxId}
+          tabIndex={-1}
+          aria-multiselectable={multiselect ? true : undefined}
+          className="canon-SubmenuComboboxItems"
+        >
+          {filteredOptions.length === 0 ? (
+            <div className="canon-SubmenuComboboxNoResults">
+              No results found
+            </div>
+          ) : (
+            filteredOptions.map((option, index) => (
+              <ComboboxItem
+                key={option.value}
+                option={option}
+                optionIndex={index}
+                value={value}
+                activeOptionIndex={activeOptionIndex}
+                onItemActive={setActiveOptionIndex}
+                onItemSelect={handleValueChange}
+                listboxId={listboxId}
+              />
+            ))
+          )}
+        </div>
+      </div>
+    );
+  },
+);
+Combobox.displayName = 'Combobox';
diff --git a/packages/canon/src/components/Menu/Menu.stories.tsx b/packages/canon/src/components/Menu/Menu.stories.tsx
index 5d04a2f19c..578ce945ae 100644
--- a/packages/canon/src/components/Menu/Menu.stories.tsx
+++ b/packages/canon/src/components/Menu/Menu.stories.tsx
@@ -16,8 +16,8 @@
 
 import type { Meta, StoryObj } from '@storybook/react';
 import { Menu } from './Menu';
-import { Button } from '../Button';
-import { Icon } from '../Icon';
+import { Text, Icon, Button, Flex } from '../../index';
+import { useState } from 'react';
 
 const meta = {
   title: 'Components/Menu',
@@ -27,6 +27,18 @@ const meta = {
 export default meta;
 type Story = StoryObj<typeof meta>;
 
+const options = [
+  { label: 'Apple', value: 'apple' },
+  { label: 'Banana', value: 'banana' },
+  { label: 'Blueberry', value: 'blueberry' },
+  { label: 'Cherry', value: 'cherry' },
+  { label: 'Durian', value: 'durian' },
+  { label: 'Elderberry', value: 'elderberry' },
+  { label: 'Fig', value: 'fig' },
+  { label: 'Grape', value: 'grape' },
+  { label: 'Honeydew', value: 'honeydew' },
+];
+
 export const Default: Story = {
   args: {
     children: (
@@ -35,7 +47,7 @@ export const Default: Story = {
           render={props => (
             <Button
               {...props}
-              size="medium"
+              size="small"
               variant="secondary"
               iconEnd={<Icon name="chevron-down" />}
             >
@@ -71,3 +83,149 @@ export const OpenOnHover: Story = {
     openOnHover: true,
   },
 };
+
+export const Submenu: Story = {
+  args: {
+    children: (
+      <>
+        <Menu.Trigger
+          render={props => (
+            <Button
+              {...props}
+              size="small"
+              variant="secondary"
+              iconEnd={<Icon name="chevron-down" />}
+            >
+              Menu
+            </Button>
+          )}
+        />
+        <Menu.Portal>
+          <Menu.Positioner sideOffset={8} align="start">
+            <Menu.Popup>
+              <Menu.Item>Settings</Menu.Item>
+              <Menu.Item>Invite new members</Menu.Item>
+              <Menu.Item>Download app</Menu.Item>
+              <Menu.Item>Log out</Menu.Item>
+              <Menu.Root>
+                <Menu.SubmenuTrigger>Submenu</Menu.SubmenuTrigger>
+                <Menu.Portal>
+                  <Menu.Positioner>
+                    <Menu.Popup>
+                      <Menu.Item>Submenu Item 1</Menu.Item>
+                      <Menu.Item>Submenu Item 2</Menu.Item>
+                      <Menu.Item>Submenu Item 3</Menu.Item>
+                    </Menu.Popup>
+                  </Menu.Positioner>
+                </Menu.Portal>
+              </Menu.Root>
+            </Menu.Popup>
+          </Menu.Positioner>
+        </Menu.Portal>
+      </>
+    ),
+  },
+};
+
+export const SubmenuCombobox = () => {
+  const [selectedValues, setSelectedValues] = useState<string[]>([]);
+
+  return (
+    <Flex direction="column" gap="1" align="start">
+      <Text style={{ marginBottom: 16 }}>
+        {selectedValues.length === 0
+          ? 'Which is your favorite fruit?'
+          : `Yum, ${selectedValues[0]} is delicious!`}
+      </Text>
+      <Menu.Root>
+        <Menu.Trigger
+          render={props => (
+            <Button
+              {...props}
+              size="small"
+              variant="secondary"
+              iconEnd={<Icon name="chevron-down" />}
+            >
+              Select Fruits
+            </Button>
+          )}
+        />
+        <Menu.Portal>
+          <Menu.Positioner sideOffset={4} align="start">
+            <Menu.Popup>
+              <Menu.Item>Regular Item</Menu.Item>
+              <Menu.Root>
+                <Menu.SubmenuTrigger>Fruits</Menu.SubmenuTrigger>
+                <Menu.Portal>
+                  <Menu.Positioner sideOffset={8} align="start">
+                    <Menu.Popup>
+                      <Menu.Combobox
+                        options={options}
+                        value={selectedValues}
+                        onValueChange={setSelectedValues}
+                      />
+                    </Menu.Popup>
+                  </Menu.Positioner>
+                </Menu.Portal>
+              </Menu.Root>
+              <Menu.Item>Another Item</Menu.Item>
+            </Menu.Popup>
+          </Menu.Positioner>
+        </Menu.Portal>
+      </Menu.Root>
+    </Flex>
+  );
+};
+
+export const SubmenuComboboxMultiselect = () => {
+  const [selectedValues, setSelectedValues] = useState<string[]>([]);
+
+  return (
+    <Flex direction="column" gap="1" align="start">
+      <Text style={{ marginBottom: 16 }}>
+        {selectedValues.length === 0
+          ? 'Tell us what fruits you like.'
+          : `${selectedValues.join(
+              ', ',
+            )} would make for a great, healthy smoothy!`}
+      </Text>
+      <Menu.Root>
+        <Menu.Trigger
+          render={props => (
+            <Button
+              {...props}
+              size="small"
+              variant="secondary"
+              iconEnd={<Icon name="chevron-down" />}
+            >
+              Select Fruits
+            </Button>
+          )}
+        />
+        <Menu.Portal>
+          <Menu.Positioner>
+            <Menu.Popup>
+              <Menu.Item>Regular Item</Menu.Item>
+              <Menu.Root>
+                <Menu.SubmenuTrigger>Fruits</Menu.SubmenuTrigger>
+                <Menu.Portal>
+                  <Menu.Positioner>
+                    <Menu.Popup>
+                      <Menu.Combobox
+                        multiselect
+                        options={options}
+                        value={selectedValues}
+                        onValueChange={setSelectedValues}
+                      />
+                    </Menu.Popup>
+                  </Menu.Positioner>
+                </Menu.Portal>
+              </Menu.Root>
+              <Menu.Item>Another Item</Menu.Item>
+            </Menu.Popup>
+          </Menu.Positioner>
+        </Menu.Portal>
+      </Menu.Root>
+    </Flex>
+  );
+};
diff --git a/packages/canon/src/components/Menu/Menu.styles.css b/packages/canon/src/components/Menu/Menu.styles.css
index 403d34294e..07d257f57f 100644
--- a/packages/canon/src/components/Menu/Menu.styles.css
+++ b/packages/canon/src/components/Menu/Menu.styles.css
@@ -3,16 +3,20 @@
 }
 
 .canon-MenuPopup {
-  padding: var(--canon-space-2);
+  display: flex;
+  flex-direction: column;
   border-radius: 0.375rem;
   background-color: var(--canon-bg-surface-1);
   border: 1px solid var(--canon-border);
   color: var(--canon-fg-primary);
   outline: none;
-  overflow: hidden;
+  overflow: auto;
   transform-origin: var(--transform-origin);
-  max-width: 340px;
+  max-width: min(var(--available-width), 340px);
+  max-height: min(var(--available-height), 500px);
   transition: transform 150ms, opacity 150ms;
+  position: relative;
+  padding-bottom: var(--canon-space-1);
 
   &[data-starting-style],
   &[data-ending-style] {
@@ -23,25 +27,61 @@
 
 .canon-MenuItem {
   outline: 0;
-  cursor: default;
   user-select: none;
   display: flex;
+  height: 32px;
+  align-items: center;
   gap: var(--canon-space-2);
   color: var(--canon-fg-primary);
   text-decoration: none;
   border-radius: var(--canon-radius-2);
-  padding: var(--canon-space-2) var(--canon-space-2);
-  padding-right: var(--canon-space-4);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
   cursor: pointer;
+  flex-shrink: 0;
 
-  &:last-child {
-    border-bottom: none;
+  &:first-child {
+    margin-top: var(--canon-space-1);
   }
 
   &[data-highlighted] {
-    z-index: 0;
-    position: relative;
-    background-color: var(--canon-bg-tint-hover);
+    background-color: var(--canon-gray-3);
+  }
+}
+
+.canon-MenuSubmenuTrigger {
+  outline: 0;
+  user-select: none;
+  display: flex;
+  height: 32px;
+  align-items: center;
+  justify-content: space-between;
+  gap: var(--canon-space-2);
+  color: var(--canon-fg-primary);
+  text-decoration: none;
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  flex-shrink: 0;
+
+  & .canon-Icon {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:first-child {
+    margin-top: var(--canon-space-1);
+  }
+
+  &[data-popup-open],
+  &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+
+    .canon-Icon {
+      color: var(--canon-fg-primary);
+    }
   }
 }
 
@@ -50,3 +90,91 @@
   height: 1px;
   background-color: var(--color-gray-200);
 }
+
+.canon-SubmenuComboboxSearch {
+  padding-inline: var(--canon-space-3);
+  height: 32px;
+  border: none;
+  border-bottom: 1px solid var(--canon-border);
+  background-color: var(--canon-bg-surface-1);
+  color: var(--canon-fg-primary);
+  line-height: 140%;
+  outline: none;
+  font-size: var(--canon-font-size-3);
+  position: sticky;
+  top: 0;
+  z-index: 1;
+
+  &::placeholder {
+    color: var(--canon-fg-secondary);
+  }
+
+  &:disabled {
+    opacity: 0.6;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItems {
+  overflow-y: auto;
+  display: flex;
+  flex-direction: column;
+  padding-top: var(--canon-space-2);
+  outline: none;
+}
+
+.canon-SubmenuComboboxNoResults {
+  padding-inline: var(--canon-space-3);
+  padding-top: var(--canon-space-2);
+  padding-bottom: var(--canon-space-4);
+  color: var(--canon-fg-secondary);
+  font-size: var(--canon-font-size-3);
+}
+
+.canon-SubmenuComboboxItem {
+  outline: 0;
+  user-select: none;
+  display: flex;
+  height: 32px;
+  align-items: center;
+  justify-content: space-between;
+  gap: var(--canon-space-2);
+  color: var(--canon-fg-primary);
+  text-decoration: none;
+  border-radius: var(--canon-radius-2);
+  margin-inline: var(--canon-space-1);
+  padding-inline: var(--canon-space-2);
+  font-size: var(--canon-font-size-3);
+  cursor: pointer;
+  user-select: none;
+  flex-shrink: 0;
+
+  &[data-highlighted] {
+    background-color: var(--canon-gray-3);
+  }
+
+  &[data-disabled] {
+    opacity: 0.5;
+    cursor: not-allowed;
+  }
+}
+
+.canon-SubmenuComboboxItemCheckbox {
+  display: flex;
+  align-items: center;
+  justify-content: center;
+  width: 16px;
+  height: 16px;
+  color: var(--canon-fg-primary);
+  flex-shrink: 0;
+  border-radius: var(--canon-radius-2);
+  border: 1px solid var(--canon-border);
+  background: var(--canon-bg-surface-1);
+}
+
+.canon-SubmenuComboboxItemLabel {
+  flex: 1;
+  overflow: hidden;
+  text-overflow: ellipsis;
+  white-space: nowrap;
+}
diff --git a/packages/canon/src/components/Menu/Menu.tsx b/packages/canon/src/components/Menu/Menu.tsx
index 6b93d14865..123b01b283 100644
--- a/packages/canon/src/components/Menu/Menu.tsx
+++ b/packages/canon/src/components/Menu/Menu.tsx
@@ -18,6 +18,8 @@ import { forwardRef } from 'react';
 import { Menu as MenuPrimitive } from '@base-ui-components/react/menu';
 import clsx from 'clsx';
 import { MenuComponent } from './types';
+import { Combobox } from './Combobox';
+import { Icon } from '../Icon';
 
 const MenuTrigger = forwardRef<
   React.ElementRef<typeof MenuPrimitive.Trigger>,
@@ -180,12 +182,15 @@ MenuCheckboxItemIndicator.displayName =
 const MenuSubmenuTrigger = forwardRef<
   React.ElementRef<typeof MenuPrimitive.SubmenuTrigger>,
   React.ComponentPropsWithoutRef<typeof MenuPrimitive.SubmenuTrigger>
->(({ className, ...props }, ref) => (
+>(({ className, children, ...props }, ref) => (
   <MenuPrimitive.SubmenuTrigger
     ref={ref}
     className={clsx('canon-MenuSubmenuTrigger', className)}
     {...props}
-  />
+  >
+    <div>{children}</div>
+    <Icon aria-label="Submenu indicator icon" name="chevron-right" size={20} />
+  </MenuPrimitive.SubmenuTrigger>
 ));
 MenuSubmenuTrigger.displayName = MenuPrimitive.SubmenuTrigger.displayName;
 
@@ -220,4 +225,5 @@ export const Menu: MenuComponent = {
   CheckboxItemIndicator: MenuCheckboxItemIndicator,
   SubmenuTrigger: MenuSubmenuTrigger,
   Separator: MenuSeparator,
+  Combobox,
 };
diff --git a/packages/canon/src/components/Menu/types.ts b/packages/canon/src/components/Menu/types.ts
index 63f8069f61..9071f9a921 100644
--- a/packages/canon/src/components/Menu/types.ts
+++ b/packages/canon/src/components/Menu/types.ts
@@ -13,7 +13,29 @@
  * See the License for the specific language governing permissions and
  * limitations under the License.
  */
+
 import { Menu as MenuPrimitive } from '@base-ui-components/react/menu';
+import {
+  ForwardRefExoticComponent,
+  RefAttributes,
+  ComponentProps,
+} from 'react';
+
+/** @public */
+export type MenuComboboxOption = {
+  label: string;
+  value: string;
+  disabled?: boolean;
+};
+
+/** @public */
+export interface MenuComboboxProps extends ComponentProps<'div'> {
+  options: MenuComboboxOption[];
+  value?: string[];
+  onValueChange?: (value: string[]) => void;
+  multiselect?: boolean;
+  closeParentOnEsc?: boolean;
+}
 
 /** @public */
 export type MenuComponent = {
@@ -34,4 +56,7 @@ export type MenuComponent = {
   CheckboxItemIndicator: typeof MenuPrimitive.CheckboxItemIndicator;
   SubmenuTrigger: typeof MenuPrimitive.SubmenuTrigger;
   Separator: typeof MenuPrimitive.Separator;
+  Combobox: ForwardRefExoticComponent<
+    MenuComboboxProps & RefAttributes<HTMLDivElement>
+  >;
 };