diff --git a/.changeset/big-corners-type.md b/.changeset/big-corners-type.md
new file mode 100644
index 00000000000..67dcfae0f89
--- /dev/null
+++ b/.changeset/big-corners-type.md
@@ -0,0 +1,5 @@
+---
+"@primer/react": patch
+---
+
+Don't focus Autocomplete menu items while menu is closed: fix SR announcement bug and menu item skipping bug
diff --git a/.playwright/snapshots/components/ActionMenu.test.ts-snapshots/ActionMenu-Dev-Within-Dialog-dark-colorblind-css-anchor-positioning-linux.png b/.playwright/snapshots/components/ActionMenu.test.ts-snapshots/ActionMenu-Dev-Within-Dialog-dark-colorblind-css-anchor-positioning-linux.png
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diff --git a/.playwright/snapshots/components/ActionMenu.test.ts-snapshots/ActionMenu-Dev-Within-Dialog-light-tritanopia-linux.png b/.playwright/snapshots/components/ActionMenu.test.ts-snapshots/ActionMenu-Dev-Within-Dialog-light-tritanopia-linux.png
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diff --git a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-dark-colorblind-linux.png b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-dark-colorblind-linux.png
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diff --git a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-dark-dimmed-linux.png b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-dark-dimmed-linux.png
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index a5d214d4cb6..80bbe785f3a 100644
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index 3a966daebb3..17c9c6ff91f 100644
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diff --git a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-high-contrast-linux.png b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-high-contrast-linux.png
index ff8eeeff8c2..116a39581ee 100644
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diff --git a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-linux.png b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-linux.png
index 3a966daebb3..17c9c6ff91f 100644
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diff --git a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-tritanopia-linux.png b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-tritanopia-linux.png
index 3a966daebb3..17c9c6ff91f 100644
Binary files a/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-tritanopia-linux.png and b/.playwright/snapshots/components/Autocomplete.test.ts-snapshots/Autocomplete-In-Overlay-With-Custom-Scroll-Container-Ref-light-tritanopia-linux.png differ
diff --git a/packages/react/src/Autocomplete/Autocomplete.features.stories.module.css b/packages/react/src/Autocomplete/Autocomplete.features.stories.module.css
index 913e5e5cdfa..7bc09e99537 100644
--- a/packages/react/src/Autocomplete/Autocomplete.features.stories.module.css
+++ b/packages/react/src/Autocomplete/Autocomplete.features.stories.module.css
@@ -36,8 +36,9 @@
 }
 
 .OverlayInputBar {
+  /* stylelint-disable-next-line primer/spacing */
+  padding: 1px;
   border-width: 0;
-  border-bottom-width: var(--borderWidth-default);
   border-color: var(--borderColor-default);
   border-style: solid;
 }
@@ -45,8 +46,8 @@
 .OverlayInput {
   display: flex;
   border: 0;
-  padding-left: var(--base-size-16);
-  padding-right: var(--base-size-16);
+  /* stylelint-disable-next-line primer/borders */
+  border-radius: calc(var(--borderRadius-large) - 1px);
   padding-top: var(--base-size-4);
   padding-bottom: var(--base-size-4);
   box-shadow: none;
diff --git a/packages/react/src/Autocomplete/Autocomplete.test.tsx b/packages/react/src/Autocomplete/Autocomplete.test.tsx
index 054a9b52e0a..da069dbb231 100644
--- a/packages/react/src/Autocomplete/Autocomplete.test.tsx
+++ b/packages/react/src/Autocomplete/Autocomplete.test.tsx
@@ -1,6 +1,6 @@
 import {render, fireEvent, screen, waitFor} from '@testing-library/react'
 import userEvent from '@testing-library/user-event'
-import React from 'react'
+import {createRef} from 'react'
 import {describe, expect, it, vi} from 'vitest'
 import type {AutocompleteInputProps} from '../Autocomplete'
 import Autocomplete from '../Autocomplete'
@@ -269,6 +269,49 @@ describe('Autocomplete', () => {
   })
 
   describe('Autocomplete.Menu', () => {
+    it('only sets an active descendant while a menu rendered without an overlay is open', async () => {
+      const user = userEvent.setup()
+      const ancestorRef = createRef<HTMLDivElement>()
+      const handleAncestorKeyDown = (event: KeyboardEvent) => {
+        if (!event.defaultPrevented && event.key === 'ArrowDown') {
+          ancestorRef.current?.querySelector<HTMLElement>('[role="option"]')?.focus()
+        }
+      }
+
+      render(
+        <BaseStyles>
+          <div ref={ancestorRef}>
+            <label htmlFor="autocompleteInput" id="autocompleteLabel">
+              Autocomplete field
+            </label>
+            <Autocomplete id="autocompleteId">
+              <Autocomplete.Input id="autocompleteInput" />
+              <Autocomplete.Menu items={mockItems} selectedItemIds={[]} aria-labelledby="autocompleteLabel" />
+            </Autocomplete>
+          </div>
+        </BaseStyles>,
+      )
+      const inputNode = screen.getByRole('combobox', {name: AUTOCOMPLETE_LABEL})
+      ancestorRef.current?.addEventListener('keydown', handleAncestorKeyDown)
+
+      expect(inputNode).toHaveAttribute('aria-expanded', 'false')
+      expect(screen.getByRole('listbox', {hidden: true}).closest('[hidden]')).toBeInTheDocument()
+
+      await user.click(inputNode)
+      expect(inputNode).not.toHaveAttribute('aria-activedescendant')
+
+      await user.keyboard('{ArrowDown}')
+      await waitFor(() => {
+        expect(inputNode).toHaveFocus()
+        expect(inputNode).toHaveAttribute('aria-activedescendant', mockItems[0].id)
+        expect(screen.getByRole('option', {name: mockItems[0].text})).not.toHaveFocus()
+      })
+
+      // eslint-disable-next-line github/no-blur
+      fireEvent.blur(inputNode)
+      await waitFor(() => expect(inputNode).not.toHaveAttribute('aria-activedescendant'))
+    })
+
     it('calls a custom filter function', async () => {
       const user = userEvent.setup()
       const filterFnMock = vi.fn()
diff --git a/packages/react/src/Autocomplete/AutocompleteInput.tsx b/packages/react/src/Autocomplete/AutocompleteInput.tsx
index d512a53e3cf..18a2ab14e3b 100644
--- a/packages/react/src/Autocomplete/AutocompleteInput.tsx
+++ b/packages/react/src/Autocomplete/AutocompleteInput.tsx
@@ -28,6 +28,7 @@ const AutocompleteInput = React.forwardRef(
       onBlur,
       onChange,
       onKeyDown,
+      onKeyDownCapture,
       onKeyUp,
       onKeyPress,
       value,
@@ -111,6 +112,14 @@ const AutocompleteInput = React.forwardRef(
       [inputRef, setInputValue, setHighlightRemainingText, onKeyDown, showMenu, setShowMenu],
     )
 
+    const handleInputKeyDownCapture: KeyboardEventHandler<HTMLInputElement> = event => {
+      onKeyDownCapture?.(event)
+
+      if (!showMenu && ARROW_KEYS_NAV.has(event.key) && !event.altKey) {
+        event.preventDefault()
+      }
+    }
+
     const handleInputKeyUp: KeyboardEventHandler<HTMLInputElement> = useCallback(
       event => {
         onKeyUp?.(event)
@@ -174,6 +183,7 @@ const AutocompleteInput = React.forwardRef(
         onBlur={handleInputBlur}
         onChange={handleInputChange}
         onKeyDown={handleInputKeyDown}
+        onKeyDownCapture={handleInputKeyDownCapture}
         onKeyPress={onInputKeyPress}
         onKeyUp={handleInputKeyUp}
         ref={mergedRef}
diff --git a/packages/react/src/Autocomplete/AutocompleteMenu.tsx b/packages/react/src/Autocomplete/AutocompleteMenu.tsx
index 57ecf08420c..1e9ea6addbb 100644
--- a/packages/react/src/Autocomplete/AutocompleteMenu.tsx
+++ b/packages/react/src/Autocomplete/AutocompleteMenu.tsx
@@ -287,6 +287,7 @@ function AutocompleteMenu<T extends AutocompleteItemProps>(props: AutocompleteMe
   useFocusZone(
     {
       containerRef: listContainerRef,
+      disabled: !showMenu,
       focusOutBehavior: 'wrap',
       focusableElementFilter: element => {
         return !(element instanceof HTMLInputElement)
@@ -354,7 +355,7 @@ function AutocompleteMenu<T extends AutocompleteItemProps>(props: AutocompleteMe
   }
 
   return (
-    <VisuallyHidden isVisible={showMenu}>
+    <VisuallyHidden isVisible={showMenu} hidden={!showMenu}>
       {loading ? (
         <div className={classes.SpinnerWrapper}>
           <Spinner />