diff --git a/packages/scenes/src/variables/adhoc/AdHocFilterRenderer.tsx b/packages/scenes/src/variables/adhoc/AdHocFilterRenderer.tsx
index 97720800f..81d273ec7 100644
--- a/packages/scenes/src/variables/adhoc/AdHocFilterRenderer.tsx
+++ b/packages/scenes/src/variables/adhoc/AdHocFilterRenderer.tsx
@@ -116,7 +116,7 @@ export function AdHocFilterRenderer({ filter, model }: Props) {
   const valueSelect = (
     <Select
       virtualized
-      allowCustomValue
+      allowCustomValue={model.state.allowCustomValue ?? true}
       isValidNewOption={(inputValue) => inputValue.trim().length > 0}
       allowCreateWhileLoading
       formatCreateLabel={(inputValue) => `Use custom value: ${inputValue}`}
@@ -171,7 +171,7 @@ export function AdHocFilterRenderer({ filter, model }: Props) {
       disabled={model.state.readOnly}
       className={cx(styles.key, isKeysOpen ? styles.widthWhenOpen : undefined)}
       width="auto"
-      allowCustomValue={true}
+      allowCustomValue={model.state.allowCustomValue ?? true}
       value={keyValue}
       placeholder={'Select label'}
       options={handleOptionGroups(keys)}
diff --git a/packages/scenes/src/variables/adhoc/AdHocFiltersCombobox/AdHocFiltersCombobox.tsx b/packages/scenes/src/variables/adhoc/AdHocFiltersCombobox/AdHocFiltersCombobox.tsx
index a367d43a7..0412b5858 100644
--- a/packages/scenes/src/variables/adhoc/AdHocFiltersCombobox/AdHocFiltersCombobox.tsx
+++ b/packages/scenes/src/variables/adhoc/AdHocFiltersCombobox/AdHocFiltersCombobox.tsx
@@ -66,6 +66,7 @@ export const AdHocCombobox = forwardRef(function AdHocCombobox(
   // control multi values with local state in order to commit all values at once and avoid _wip reset mid creation
   const [filterMultiValues, setFilterMultiValues] = useState<Array<SelectableValue<string>>>([]);
   const [_, setForceRefresh] = useState({});
+  const allowCustomValue = model.state.allowCustomValue ?? true;
 
   const multiValuePillWrapperRef = useRef<HTMLDivElement>(null);
 
@@ -206,7 +207,7 @@ export const AdHocCombobox = forwardRef(function AdHocCombobox(
   const filteredDropDownItems = flattenOptionGroups(handleOptionGroups(optionsSearcher(inputValue, filterInputType)));
 
   // adding custom option this way so that virtualiser is aware of it and can scroll to
-  if (filterInputType !== 'operator' && inputValue) {
+  if (allowCustomValue && filterInputType !== 'operator' && inputValue) {
     filteredDropDownItems.push({
       value: inputValue.trim(),
       label: inputValue.trim(),
@@ -345,6 +346,7 @@ export const AdHocCombobox = forwardRef(function AdHocCombobox(
     (event: React.KeyboardEvent, multiValueEdit?: boolean) => {
       if (event.key === 'Enter' && activeIndex != null) {
         // safeguard for non existing items
+        // note: custom item is added to filteredDropDownItems if allowed
         if (!filteredDropDownItems[activeIndex]) {
           return;
         }
@@ -588,7 +590,8 @@ export const AdHocCombobox = forwardRef(function AdHocCombobox(
                     <LoadingOptionsPlaceholder />
                   ) : optionsError ? (
                     <OptionsErrorPlaceholder handleFetchOptions={() => handleFetchOptions(filterInputType)} />
-                  ) : !filteredDropDownItems.length && (filterInputType === 'operator' || !inputValue) ? (
+                  ) : !filteredDropDownItems.length &&
+                    (!allowCustomValue || filterInputType === 'operator' || !inputValue) ? (
                     <NoOptionsPlaceholder />
                   ) : (
                     rowVirtualizer.getVirtualItems().map((virtualItem) => {
diff --git a/packages/scenes/src/variables/adhoc/AdHocFiltersVariable.tsx b/packages/scenes/src/variables/adhoc/AdHocFiltersVariable.tsx
index 35d04c7de..2fd8dcccc 100644
--- a/packages/scenes/src/variables/adhoc/AdHocFiltersVariable.tsx
+++ b/packages/scenes/src/variables/adhoc/AdHocFiltersVariable.tsx
@@ -95,6 +95,11 @@ export interface AdHocFiltersVariableState extends SceneVariableState {
    */
   useQueriesAsFilterForOptions?: boolean;
 
+  /**
+   * Flag that decides whether custom values can be added to the filter
+   */
+  allowCustomValue?: boolean;
+
   /**
    * @internal state of the new filter being added
    */
diff --git a/packages/scenes/src/variables/components/VariableValueSelect.test.tsx b/packages/scenes/src/variables/components/VariableValueSelect.test.tsx
index 0c7432fc5..68859062d 100644
--- a/packages/scenes/src/variables/components/VariableValueSelect.test.tsx
+++ b/packages/scenes/src/variables/components/VariableValueSelect.test.tsx
@@ -16,6 +16,7 @@ describe('VariableValueSelect', () => {
       name: 'test',
       query: 'A,B,C',
       isMulti: true,
+      allowCustomValue: true,
       value: [],
       text: '',
       options: [
@@ -129,4 +130,41 @@ describe('VariableValueSelect', () => {
     const options = screen.getAllByRole('option');
     expect(options).toHaveLength(3);
   });
+
+  it('should render custom values in VariableValueSelect component', async () => {
+    render(<VariableValueSelect model={model} />);
+    const variableValueSelectElement = screen.getByTestId(
+      selectors.pages.Dashboard.SubMenu.submenuItemValueDropDownValueLinkTexts(`${model.state.value}`)
+    );
+    const inputElement = variableValueSelectElement.querySelector('input');
+    expect(inputElement).toBeInTheDocument();
+    if (!inputElement) {
+      return;
+    }
+
+    //type custom value in input
+    await userEvent.type(inputElement, 'custom value');
+    let options = screen.getAllByRole('option');
+    //expect custom value to be the only value added to options
+    expect(options).toHaveLength(1);
+  });
+
+  it('should not render custom values when allowCustomValue is false in VariableValueSelect component', async () => {
+    model.setState({ allowCustomValue: false });
+
+    render(<VariableValueSelect model={model} />);
+    const variableValueSelectElement = screen.getByTestId(
+      selectors.pages.Dashboard.SubMenu.submenuItemValueDropDownValueLinkTexts(`${model.state.value}`)
+    );
+    const inputElement = variableValueSelectElement.querySelector('input');
+    expect(inputElement).toBeInTheDocument();
+    if (!inputElement) {
+      return;
+    }
+
+    //expect no options now since we are typing a value that isn't in the list of options and also we can't add custom values
+    await userEvent.type(inputElement, 'custom value');
+    const options = screen.queryAllByRole('option');
+    expect(options).toHaveLength(0);
+  });
 });
diff --git a/packages/scenes/src/variables/components/VariableValueSelect.tsx b/packages/scenes/src/variables/components/VariableValueSelect.tsx
index 6457c8f28..24f642f9d 100644
--- a/packages/scenes/src/variables/components/VariableValueSelect.tsx
+++ b/packages/scenes/src/variables/components/VariableValueSelect.tsx
@@ -40,7 +40,7 @@ export function toSelectableValue<T>(value: T, label?: string): SelectableValue<
 }
 
 export function VariableValueSelect({ model }: SceneComponentProps<MultiValueVariable>) {
-  const { value, text, key, options, includeAll, isReadOnly } = model.useState();
+  const { value, text, key, options, includeAll, isReadOnly, allowCustomValue = true } = model.useState();
   const [inputValue, setInputValue] = useState('');
   const [hasCustomValue, setHasCustomValue] = useState(false);
   const selectValue = toSelectableValue(value, String(text));
@@ -80,7 +80,7 @@ export function VariableValueSelect({ model }: SceneComponentProps<MultiValueVar
       disabled={isReadOnly}
       value={selectValue}
       inputValue={inputValue}
-      allowCustomValue
+      allowCustomValue={allowCustomValue}
       virtualized
       filterOption={filterNoOp}
       tabSelectsValue={false}
@@ -101,7 +101,7 @@ export function VariableValueSelect({ model }: SceneComponentProps<MultiValueVar
 }
 
 export function VariableValueSelectMulti({ model }: SceneComponentProps<MultiValueVariable>) {
-  const { value, options, key, maxVisibleValues, noValueOnClear, includeAll, isReadOnly } = model.useState();
+  const { value, options, key, maxVisibleValues, noValueOnClear, includeAll, isReadOnly, allowCustomValue = true } = model.useState();
   const arrayValue = useMemo(() => (isArray(value) ? value : [value]), [value]);
   // To not trigger queries on every selection we store this state locally here and only update the variable onBlur
   const [uncommittedValue, setUncommittedValue] = useState(arrayValue);
@@ -146,7 +146,7 @@ export function VariableValueSelectMulti({ model }: SceneComponentProps<MultiVal
       maxVisibleValues={maxVisibleValues ?? 5}
       tabSelectsValue={false}
       virtualized
-      allowCustomValue
+      allowCustomValue={allowCustomValue}
       //@ts-ignore
       toggleAllOptions={{
         enabled: true,
diff --git a/packages/scenes/src/variables/variants/MultiValueVariable.ts b/packages/scenes/src/variables/variants/MultiValueVariable.ts
index 05a0cf53e..0845acd1c 100644
--- a/packages/scenes/src/variables/variants/MultiValueVariable.ts
+++ b/packages/scenes/src/variables/variants/MultiValueVariable.ts
@@ -25,6 +25,7 @@ export interface MultiValueVariableState extends SceneVariableState {
   value: VariableValue; // old current.text
   text: VariableValue; // old current.value
   options: VariableValueOption[];
+  allowCustomValue?: boolean;
   isMulti?: boolean;
   includeAll?: boolean;
   defaultToAll?: boolean;