diff --git a/.changeset/easy-maps-appear.md b/.changeset/easy-maps-appear.md
new file mode 100644
index 0000000000..67c97c20f6
--- /dev/null
+++ b/.changeset/easy-maps-appear.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-home': minor
+---
+
+Widget configurations are now only saved to storage when the Save button is explicitly clicked. Added a Cancel button that allows users to discard unsaved changes and revert to the last saved state.
diff --git a/plugins/home/report-alpha.api.md b/plugins/home/report-alpha.api.md
index 58ceef751d..6344805372 100644
--- a/plugins/home/report-alpha.api.md
+++ b/plugins/home/report-alpha.api.md
@@ -107,6 +107,7 @@ export const homeTranslationRef: TranslationRef<
   {
     readonly 'starredEntities.noStarredEntitiesMessage': 'Click the star beside an entity name to add it to this list!';
     readonly 'addWidgetDialog.title': 'Add new widget to dashboard';
+    readonly 'customHomepageButtons.cancel': 'Cancel';
     readonly 'customHomepageButtons.clearAll': 'Clear all';
     readonly 'customHomepageButtons.edit': 'Edit';
     readonly 'customHomepageButtons.restoreDefaults': 'Restore defaults';
diff --git a/plugins/home/src/components/CustomHomepage/CustomHomepageButtons.tsx b/plugins/home/src/components/CustomHomepage/CustomHomepageButtons.tsx
index 0496e923de..b7e397c995 100644
--- a/plugins/home/src/components/CustomHomepage/CustomHomepageButtons.tsx
+++ b/plugins/home/src/components/CustomHomepage/CustomHomepageButtons.tsx
@@ -45,6 +45,7 @@ interface CustomHomepageButtonsProps {
   changeEditMode: (mode: boolean) => void;
   defaultConfigAvailable: boolean;
   restoreDefault: () => void;
+  cancel: () => void;
 }
 export const CustomHomepageButtons = (props: CustomHomepageButtonsProps) => {
   const {
@@ -55,6 +56,7 @@ export const CustomHomepageButtons = (props: CustomHomepageButtonsProps) => {
     changeEditMode,
     defaultConfigAvailable,
     restoreDefault,
+    cancel,
   } = props;
   const styles = useStyles();
   const { t } = useTranslationRef(homeTranslationRef);
@@ -73,6 +75,9 @@ export const CustomHomepageButtons = (props: CustomHomepageButtonsProps) => {
         </Button>
       ) : (
         <>
+          <Button variant="contained" onClick={cancel} size="small">
+            {t('customHomepageButtons.cancel')}
+          </Button>
           {defaultConfigAvailable && (
             <Button
               variant="contained"
diff --git a/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.test.tsx b/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.test.tsx
new file mode 100644
index 0000000000..40b297d7e9
--- /dev/null
+++ b/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.test.tsx
@@ -0,0 +1,169 @@
+/*
+ * 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 { screen } from '@testing-library/react';
+import { CustomHomepageGrid } from './CustomHomepageGrid';
+import {
+  renderInTestApp,
+  mockApis,
+  TestApiProvider,
+} from '@backstage/test-utils';
+import { homePlugin } from '../../plugin';
+import {
+  createComponentExtension,
+  storageApiRef,
+} from '@backstage/core-plugin-api';
+import userEvent from '@testing-library/user-event';
+import { ComponentProps } from 'react';
+
+const ComponentA = homePlugin.provide(
+  createComponentExtension({
+    name: 'A',
+    component: {
+      sync: () => <div>A</div>,
+    },
+  }),
+);
+
+const ComponentB = homePlugin.provide(
+  createComponentExtension({
+    name: 'B',
+    component: {
+      sync: () => <div>B</div>,
+    },
+  }),
+);
+
+const ComponentC = homePlugin.provide(
+  createComponentExtension({
+    name: 'C',
+    component: {
+      sync: () => <div>C</div>,
+    },
+  }),
+);
+
+const defaultConfig: ComponentProps<typeof CustomHomepageGrid>['config'] = [
+  {
+    component: 'A',
+    x: 0,
+    y: 0,
+    width: 10,
+    height: 10,
+  },
+  {
+    component: 'B',
+    x: 10,
+    y: 0,
+    width: 10,
+    height: 10,
+  },
+  {
+    component: 'C',
+    x: 0,
+    y: 10,
+    width: 20,
+    height: 10,
+  },
+];
+
+describe('CustomHomepageGrid', () => {
+  beforeEach(() => {
+    jest.resetAllMocks();
+  });
+
+  it('should save edits', async () => {
+    const mockStorage = mockApis.storage();
+
+    await renderInTestApp(
+      <TestApiProvider apis={[[storageApiRef, mockStorage]]}>
+        <CustomHomepageGrid config={defaultConfig}>
+          <ComponentA />
+          <ComponentB />
+          <ComponentC />
+        </CustomHomepageGrid>
+      </TestApiProvider>,
+    );
+
+    expect(screen.getByText('A')).toBeInTheDocument();
+    expect(screen.getByText('B')).toBeInTheDocument();
+    expect(screen.getByText('C')).toBeInTheDocument();
+
+    const editButton = screen.getByRole('button', { name: 'Edit' });
+    await userEvent.click(editButton);
+    expect(editButton).not.toBeVisible();
+
+    await userEvent.click(
+      screen.getAllByRole('button', { name: 'Delete widget' })[0],
+    );
+
+    const saveButton = screen.getByRole('button', { name: 'Save' });
+    await userEvent.click(saveButton);
+    expect(saveButton).not.toBeVisible();
+
+    expect(screen.queryByText('A')).not.toBeInTheDocument();
+    expect(screen.getByText('B')).toBeInTheDocument();
+    expect(screen.getByText('C')).toBeInTheDocument();
+
+    expect(
+      mockStorage.forBucket('home.customHomepage').snapshot('home'),
+    ).toEqual({
+      key: 'home',
+      presence: 'present',
+      value: expect.any(String),
+    });
+  });
+
+  it('should cancel edits', async () => {
+    const mockStorage = mockApis.storage();
+
+    await renderInTestApp(
+      <TestApiProvider apis={[[storageApiRef, mockStorage]]}>
+        <CustomHomepageGrid config={defaultConfig}>
+          <ComponentA />
+          <ComponentB />
+          <ComponentC />
+        </CustomHomepageGrid>
+      </TestApiProvider>,
+    );
+
+    expect(screen.getByText('A')).toBeInTheDocument();
+    expect(screen.getByText('B')).toBeInTheDocument();
+    expect(screen.getByText('C')).toBeInTheDocument();
+
+    await userEvent.click(screen.getByRole('button', { name: 'Edit' }));
+    const widgets = screen.getAllByRole('button', { name: 'Delete widget' });
+
+    for (const widget of widgets) {
+      await userEvent.click(widget);
+    }
+
+    expect(screen.queryByText('A')).not.toBeInTheDocument();
+    expect(screen.queryByText('B')).not.toBeInTheDocument();
+    expect(screen.queryByText('C')).not.toBeInTheDocument();
+
+    await userEvent.click(screen.getByRole('button', { name: 'Cancel' }));
+
+    expect(screen.getByText('A')).toBeInTheDocument();
+    expect(screen.getByText('B')).toBeInTheDocument();
+    expect(screen.getByText('C')).toBeInTheDocument();
+
+    expect(
+      mockStorage.forBucket('home.customHomepage').snapshot('home'),
+    ).toEqual(
+      expect.objectContaining({ presence: 'absent', value: undefined }),
+    );
+  });
+});
diff --git a/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.tsx b/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.tsx
index a265a47290..065caff3f4 100644
--- a/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.tsx
+++ b/plugins/home/src/components/CustomHomepage/CustomHomepageGrid.tsx
@@ -14,7 +14,13 @@
  * limitations under the License.
  */
 
-import { isValidElement, useState, useCallback, useMemo } from 'react';
+import {
+  isValidElement,
+  useState,
+  useCallback,
+  useMemo,
+  useEffect,
+} from 'react';
 import { Layout, Layouts, Responsive, WidthProvider } from 'react-grid-layout';
 import {
   ElementCollection,
@@ -220,10 +226,18 @@ export const CustomHomepageGrid = (props: CustomHomepageGridProps) => {
       ? convertConfigToDefaultWidgets(props.config, availableWidgets)
       : [];
   }, [props.config, availableWidgets]);
-  const [widgets, setWidgets, isStorageLoading] = useHomeStorage(defaultLayout);
+  const [storedWidgets, storeWidgets, isStorageLoading] =
+    useHomeStorage(defaultLayout);
+  const [widgets, setWidgets] = useState(storedWidgets);
+
   const [addWidgetDialogOpen, setAddWidgetDialogOpen] = useState(false);
   const editModeOn = widgets.find(w => w.layout.isResizable) !== undefined;
   const [editMode, setEditMode] = useState(editModeOn);
+
+  useEffect(() => {
+    setWidgets(storedWidgets);
+  }, [storedWidgets]);
+
   const getWidgetByName = (name: string) => {
     return availableWidgets.find(widget => widget.name === name);
   };
@@ -287,16 +301,18 @@ export const CustomHomepageGrid = (props: CustomHomepageGridProps) => {
 
   const changeEditMode = (mode: boolean) => {
     setEditMode(mode);
-    setWidgets(
-      widgets.map(w => {
+
+    if (!mode) {
+      const newWidgets = widgets.map(w => {
         const resizable = w.resizable === false ? false : mode;
         const movable = w.movable === false ? false : mode;
         return {
           ...w,
           layout: { ...w.layout, isDraggable: movable, isResizable: resizable },
         };
-      }),
-    );
+      });
+      storeWidgets(newWidgets);
+    }
   };
 
   const handleLayoutChange = (newLayout: Layout[], _: Layouts) => {
@@ -329,6 +345,11 @@ export const CustomHomepageGrid = (props: CustomHomepageGridProps) => {
     );
   };
 
+  const handleCancel = () => {
+    setWidgets(storedWidgets);
+    setEditMode(false);
+  };
+
   if (isStorageLoading) {
     return <Progress />;
   }
@@ -344,6 +365,7 @@ export const CustomHomepageGrid = (props: CustomHomepageGridProps) => {
           changeEditMode={changeEditMode}
           defaultConfigAvailable={props.config !== undefined}
           restoreDefault={handleRestoreDefaultConfig}
+          cancel={handleCancel}
         />
       </ContentHeader>
       <Dialog
diff --git a/plugins/home/src/translation.ts b/plugins/home/src/translation.ts
index 4070dde28c..6e8ad2c511 100644
--- a/plugins/home/src/translation.ts
+++ b/plugins/home/src/translation.ts
@@ -30,6 +30,7 @@ export const homeTranslationRef = createTranslationRef({
       clearAll: 'Clear all',
       addWidget: 'Add widget',
       save: 'Save',
+      cancel: 'Cancel',
     },
     customHomepage: {
       noWidgets: "No widgets added. Start by clicking the 'Add widget' button.",