diff --git a/apps/builder/app/builder/features/style-panel/style-source-section.tsx b/apps/builder/app/builder/features/style-panel/style-source-section.tsx
index 7e6c0178fb..7603728c13 100644
--- a/apps/builder/app/builder/features/style-panel/style-source-section.tsx
+++ b/apps/builder/app/builder/features/style-panel/style-source-section.tsx
@@ -5,7 +5,11 @@ import type {
   StyleSource,
   StyleSourceSelection,
 } from "@webstudio-is/project-build";
-import { ItemState, StyleSourceInput } from "./style-source";
+import {
+  type ItemSource,
+  type ItemState,
+  StyleSourceInput,
+} from "./style-source";
 import { useStore } from "@nanostores/react";
 import {
   availableStyleSourcesStore,
@@ -115,10 +119,18 @@ const reorderStyleSources = (styleSourceIds: StyleSource["id"][]) => {
   );
 };
 
+type StyleSourceInputItem = {
+  id: string;
+  label: string;
+  isEditable: boolean;
+  state: ItemState;
+  source: ItemSource;
+};
+
 const convertToInputItem = (
   styleSource: StyleSource,
   selectedStyleSource?: StyleSource["id"]
-) => {
+): StyleSourceInputItem => {
   const state: ItemState =
     selectedStyleSource === styleSource.id ? "selected" : "unselected";
   if (styleSource.type === "local") {
@@ -161,9 +173,7 @@ export const StyleSourcesSection = () => {
       <StyleSourceInput
         items={items}
         value={value}
-        onCreateItem={({ label }) => {
-          createStyleSource(label);
-        }}
+        onCreateItem={createStyleSource}
         onSelectAutocompleteItem={({ id }) => {
           addStyleSourceToInstace(id);
         }}
diff --git a/apps/builder/app/builder/features/style-panel/style-source/style-source-input.stories.tsx b/apps/builder/app/builder/features/style-panel/style-source/style-source-input.stories.tsx
index 9a7d5e869a..0939497fd4 100644
--- a/apps/builder/app/builder/features/style-panel/style-source/style-source-input.stories.tsx
+++ b/apps/builder/app/builder/features/style-panel/style-source/style-source-input.stories.tsx
@@ -89,7 +89,7 @@ export const Basic: ComponentStory<typeof StyleSourceInput> = () => {
       css={{ width: 300 }}
       items={getItems()}
       value={value}
-      onCreateItem={({ label }) => {
+      onCreateItem={(label) => {
         createItem(label, value, setValue);
       }}
       onSelectAutocompleteItem={(item) => {
@@ -121,7 +121,7 @@ export const WithTruncatedItem: ComponentStory<
       css={{ width: 300 }}
       items={getItems()}
       value={value}
-      onCreateItem={({ label }) => {
+      onCreateItem={(label) => {
         createItem(label, value, setValue);
       }}
       onSelectAutocompleteItem={(item) => {
@@ -170,7 +170,7 @@ export const Complete: ComponentStory<typeof StyleSourceInput> = () => {
         );
       }}
       onEditItem={setEditingItem}
-      onCreateItem={({ label }) => {
+      onCreateItem={(label) => {
         createItem(label, value, setValue);
       }}
       onSelectAutocompleteItem={(item) => {
diff --git a/apps/builder/app/builder/features/style-panel/style-source/style-source-input.tsx b/apps/builder/app/builder/features/style-panel/style-source/style-source-input.tsx
index 14c1454f3c..406412a2b0 100644
--- a/apps/builder/app/builder/features/style-panel/style-source/style-source-input.tsx
+++ b/apps/builder/app/builder/features/style-panel/style-source/style-source-input.tsx
@@ -24,6 +24,8 @@ import {
   useTextFieldFocus,
   useCombobox,
   type CSS,
+  ComboboxLabel,
+  ComboboxSeparator,
 } from "@webstudio-is/design-system";
 import {
   forwardRef,
@@ -41,6 +43,8 @@ import {
 } from "./style-source";
 import { useSortable } from "./use-sortable";
 import { theme } from "@webstudio-is/design-system";
+import { matchSorter } from "match-sorter";
+import { StyleSourceBadge } from "./style-source-badge";
 
 type IntermediateItem = {
   id: string;
@@ -48,6 +52,7 @@ type IntermediateItem = {
   isEditable: boolean;
   state: ItemState;
   source: ItemSource;
+  isAdded?: boolean;
 };
 
 type TextFieldBaseWrapperProps<Item> = Omit<ComponentProps<"input">, "value"> &
@@ -181,7 +186,7 @@ type StyleSourceInputProps<Item> = {
   editingItem?: Item;
   onSelectAutocompleteItem?: (item: Item) => void;
   onRemoveItem?: (item: Item) => void;
-  onCreateItem?: (item: Item) => void;
+  onCreateItem?: (label: string) => void;
   onChangeItem?: (item: Item) => void;
   onSelectItem?: (item?: Item) => void;
   onEditItem?: (item?: Item) => void;
@@ -191,11 +196,51 @@ type StyleSourceInputProps<Item> = {
   css?: CSS;
 };
 
+const newItemId = "__NEW__";
+
+const matchOrSuggestToCreate = (
+  search: string,
+  items: IntermediateItem[],
+  itemToString: (item: IntermediateItem | null) => string
+): IntermediateItem[] => {
+  const matched = matchSorter(items, search, {
+    keys: [itemToString],
+  });
+  if (
+    search.trim() !== "" &&
+    itemToString(matched[0]).toLocaleLowerCase() !==
+      search.toLocaleLowerCase().trim()
+  ) {
+    matched.unshift({
+      id: newItemId,
+      label: search.trim(),
+      state: "unselected",
+      source: "token",
+      isEditable: true,
+      isAdded: false,
+    });
+  }
+  // skip already added values
+  return matched.filter((item) => item.isAdded === false).slice(0, 5);
+};
+
+const markAddedValues = <Item extends IntermediateItem>(
+  items: Item[],
+  value: Item[]
+) => {
+  const valueIds = new Set();
+  for (const item of value) {
+    valueIds.add(item.id);
+  }
+  return items.map((item) => ({ ...item, isAdded: valueIds.has(item.id) }));
+};
+
 export const StyleSourceInput = <Item extends IntermediateItem>(
   props: StyleSourceInputProps<Item>
 ) => {
   const value = props.value ?? [];
   const [label, setLabel] = useState("");
+
   const {
     items,
     getInputProps,
@@ -203,8 +248,8 @@ export const StyleSourceInput = <Item extends IntermediateItem>(
     getMenuProps,
     getItemProps,
     isOpen,
-  } = useCombobox({
-    items: props.items ?? [],
+  } = useCombobox<IntermediateItem>({
+    items: markAddedValues(props.items ?? [], value),
     value: {
       label,
       state: "unselected",
@@ -213,29 +258,32 @@ export const StyleSourceInput = <Item extends IntermediateItem>(
       isEditable: true,
     },
     selectedItem: undefined,
+    match: matchOrSuggestToCreate,
+    defaultHighlightedIndex: 0,
     itemToString: (item) => (item ? item.label : ""),
     onItemSelect(item) {
       setLabel("");
-      props.onSelectAutocompleteItem?.(item as Item);
+      if (item.id === newItemId) {
+        props.onCreateItem?.(item.label);
+      } else {
+        props.onSelectAutocompleteItem?.(item as Item);
+      }
     },
     onInputChange(label) {
       setLabel(label ?? "");
     },
   });
+
   const inputProps = getInputProps({
     onKeyDown(event) {
       if (event.key === "Backspace" && label === "") {
         props.onRemoveItem?.(value[value.length - 1]);
       }
     },
-    onKeyPress(event) {
-      if (event.key === "Enter" && label.trim() !== "") {
-        setLabel("");
-        props.onCreateItem?.({ label } as Item);
-      }
-    },
   });
 
+  let hasNewTokenItem = false;
+
   return (
     <ComboboxPopper>
       <Box {...getComboboxProps()}>
@@ -259,13 +307,50 @@ export const StyleSourceInput = <Item extends IntermediateItem>(
           <ComboboxListbox {...getMenuProps()}>
             {isOpen &&
               items.map((item, index) => {
+                if (item.id === newItemId) {
+                  hasNewTokenItem = true;
+                  return (
+                    <>
+                      <ComboboxLabel>New Token</ComboboxLabel>
+                      <ComboboxListboxItem
+                        {...getItemProps({ item, index })}
+                        key={index}
+                        selectable={false}
+                      >
+                        <div>
+                          Create{" "}
+                          <StyleSourceBadge source="token">
+                            {item.label}
+                          </StyleSourceBadge>
+                        </div>
+                      </ComboboxListboxItem>
+                    </>
+                  );
+                }
+
+                const firstExistingItemIndex = hasNewTokenItem ? 1 : 0;
+                const label = index === firstExistingItemIndex && (
+                  <>
+                    {hasNewTokenItem && <ComboboxSeparator />}
+                    <ComboboxLabel>Existing Tokens</ComboboxLabel>
+                  </>
+                );
+                if (item.source === "local") {
+                  return;
+                }
                 return (
-                  <ComboboxListboxItem
-                    {...getItemProps({ item, index })}
-                    key={index}
-                  >
-                    {item.label}
-                  </ComboboxListboxItem>
+                  <>
+                    {label}
+                    <ComboboxListboxItem
+                      {...getItemProps({ item, index })}
+                      key={index}
+                      selectable={false}
+                    >
+                      <StyleSourceBadge source={item.source}>
+                        {item.label}
+                      </StyleSourceBadge>
+                    </ComboboxListboxItem>
+                  </>
                 );
               })}
           </ComboboxListbox>
diff --git a/packages/design-system/src/components/combobox.tsx b/packages/design-system/src/components/combobox.tsx
index e54c2e5ba8..ffe1557eaa 100644
--- a/packages/design-system/src/components/combobox.tsx
+++ b/packages/design-system/src/components/combobox.tsx
@@ -96,6 +96,12 @@ export const ComboboxPopperContent = PopperContent;
 
 export const ComboboxPopperAnchor = PopperAnchor;
 
+type Match<Item> = (
+  search: string,
+  items: Item[],
+  itemToString: (item: Item | null) => string
+) => Item[];
+
 const defaultMatch = <Item,>(
   search: string,
   items: Array<Item>,
@@ -112,7 +118,7 @@ const useFilter = <Item,>({
 }: {
   items: Array<Item>;
   itemToString: (item: Item | null) => string;
-  match?: typeof defaultMatch;
+  match?: Match<Item>;
 }) => {
   const [filteredItems, setFilteredItems] = useState<Array<Item>>(items);
   const cachedItems = useRef(items);
@@ -152,7 +158,8 @@ type UseComboboxProps<Item> = UseDownshiftComboboxProps<Item> & {
     state: DownshiftState<Item>,
     changes: UseComboboxStateChangeOptions<Item>
   ) => Partial<UseComboboxStateChangeOptions<Item>>;
-  match?: typeof defaultMatch;
+  match?: Match<Item>;
+  defaultHighlightedIndex?: number;
 };
 
 export const comboboxStateChangeTypes = useDownshiftCombobox.stateChangeTypes;
@@ -167,6 +174,7 @@ export const useCombobox = <Item,>({
   onItemHighlight,
   stateReducer = (state, { changes }) => changes,
   match,
+  defaultHighlightedIndex = -1,
   ...rest
 }: UseComboboxProps<Item>) => {
   const [isOpen, setIsOpen] = useState(false);
@@ -184,7 +192,7 @@ export const useCombobox = <Item,>({
   const downshiftProps = useDownshiftCombobox({
     ...rest,
     items: filteredItems,
-    defaultHighlightedIndex: -1,
+    defaultHighlightedIndex,
     selectedItem: selectedItem ?? null, // Prevent downshift warning about switching controlled mode
     isOpen,