diff --git a/.changeset/long-ravens-listen.md b/.changeset/long-ravens-listen.md
new file mode 100644
index 0000000000..8300c12f77
--- /dev/null
+++ b/.changeset/long-ravens-listen.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-scaffolder': minor
+---
+
+Fixed bug in EntityPicker component that allowed for empty values when field is required. This bug occurs only after a user fills the EntityPicker field, clears it, and then continues to the next form step.
diff --git a/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx b/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
index aeb4a52f77..e19e27641c 100644
--- a/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
+++ b/plugins/scaffolder/src/components/fields/EntityPicker/EntityPicker.tsx
@@ -96,7 +96,8 @@ export const EntityPicker = (props: EntityPickerProps) => {
     (_: any, ref: string | Entity | null, reason: AutocompleteChangeReason) => {
       // ref can either be a string from free solo entry or
       if (typeof ref !== 'string') {
-        onChange(ref ? stringifyEntityRef(ref as Entity) : '');
+        // if ref does not exist: pass 'undefined' to trigger validation for non-free solo entries
+        onChange(ref ? stringifyEntityRef(ref as Entity) : undefined);
       } else {
         if (reason === 'blur' || reason === 'create-option') {
           // Add in default namespace, etc.