diff --git a/package.json b/package.json
index 2192d65b7d4..05f503f820c 100644
--- a/package.json
+++ b/package.json
@@ -112,6 +112,7 @@
     "@types/react-beautiful-dnd": "12.1.2",
     "@types/react-dom": "16.9.9",
     "@types/react-grid-layout": "1.1.1",
+    "@types/react-highlight-words": "^0.16.2",
     "@types/react-redux": "7.1.7",
     "@types/react-router-dom": "^5.1.7",
     "@types/react-select": "4.0.13",
@@ -277,7 +278,7 @@
     "react-diff-viewer": "^3.1.1",
     "react-dom": "17.0.1",
     "react-grid-layout": "1.2.0",
-    "react-highlight-words": "0.16.0",
+    "react-highlight-words": "0.17.0",
     "react-inlinesvg": "2.3.0",
     "react-loadable": "5.5.0",
     "react-popper": "2.2.4",
diff --git a/packages/grafana-data/src/text/text.ts b/packages/grafana-data/src/text/text.ts
index 567b85094f1..5b98ba11a6a 100644
--- a/packages/grafana-data/src/text/text.ts
+++ b/packages/grafana-data/src/text/text.ts
@@ -13,10 +13,14 @@ export function findHighlightChunksInText({
   searchWords,
   textToHighlight,
 }: {
-  searchWords: string[];
+  searchWords: Array<string | RegExp>;
   textToHighlight: string;
 }) {
-  return searchWords.reduce((acc: any, term: string) => [...acc, ...findMatchesInText(textToHighlight, term)], []);
+  const chunks: TextMatch[] = [];
+  for (const term of searchWords) {
+    chunks.push(...findMatchesInText(textToHighlight, term as string));
+  }
+  return chunks;
 }
 
 const cleanNeedle = (needle: string): string => {
diff --git a/packages/grafana-ui/src/components/Forms/Label.tsx b/packages/grafana-ui/src/components/Forms/Label.tsx
index ace084e48ad..746f1d389db 100644
--- a/packages/grafana-ui/src/components/Forms/Label.tsx
+++ b/packages/grafana-ui/src/components/Forms/Label.tsx
@@ -7,7 +7,7 @@ import { Icon } from '../Icon/Icon';
 export interface LabelProps extends React.LabelHTMLAttributes<HTMLLabelElement> {
   children: React.ReactNode;
   description?: React.ReactNode;
-  category?: string[];
+  category?: React.ReactNode[];
 }
 
 export const getLabelStyles = stylesFactory((theme: GrafanaTheme2) => {
diff --git a/packages/grafana-ui/src/components/Logs/LogRowMessage.tsx b/packages/grafana-ui/src/components/Logs/LogRowMessage.tsx
index 134cc7a6688..4bd3cf868e0 100644
--- a/packages/grafana-ui/src/components/Logs/LogRowMessage.tsx
+++ b/packages/grafana-ui/src/components/Logs/LogRowMessage.tsx
@@ -106,7 +106,7 @@ class UnThemedLogRowMessage extends PureComponent<Props> {
             {needsHighlighter ? (
               <Highlighter
                 textToHighlight={entry}
-                searchWords={highlights}
+                searchWords={highlights ?? []}
                 findChunks={findHighlightChunksInText}
                 highlightClassName={highlightClassName}
               />
diff --git a/packages/grafana-ui/src/components/Typeahead/TypeaheadItem.tsx b/packages/grafana-ui/src/components/Typeahead/TypeaheadItem.tsx
index 042dff4f05c..c2cde3dbd39 100644
--- a/packages/grafana-ui/src/components/Typeahead/TypeaheadItem.tsx
+++ b/packages/grafana-ui/src/components/Typeahead/TypeaheadItem.tsx
@@ -90,7 +90,7 @@ export const TypeaheadItem: React.FC<Props> = (props: Props) => {
           highlightParts={item.highlightParts}
         ></PartialHighlighter>
       ) : (
-        <Highlighter textToHighlight={label} searchWords={[prefix]} highlightClassName={highlightClassName} />
+        <Highlighter textToHighlight={label} searchWords={[prefix ?? '']} highlightClassName={highlightClassName} />
       )}
     </li>
   );
diff --git a/public/app/features/dashboard/components/PanelEditor/OptionsPaneCategoryDescriptor.tsx b/public/app/features/dashboard/components/PanelEditor/OptionsPaneCategoryDescriptor.tsx
index 3e595286af7..a71447ec788 100644
--- a/public/app/features/dashboard/components/PanelEditor/OptionsPaneCategoryDescriptor.tsx
+++ b/public/app/features/dashboard/components/PanelEditor/OptionsPaneCategoryDescriptor.tsx
@@ -37,7 +37,7 @@ export class OptionsPaneCategoryDescriptor {
     return this;
   }
 
-  render(isSearching?: boolean) {
+  render(searchQuery?: string) {
     if (this.props.customRender) {
       return this.props.customRender();
     }
diff --git a/public/app/features/dashboard/components/PanelEditor/OptionsPaneItemDescriptor.tsx b/public/app/features/dashboard/components/PanelEditor/OptionsPaneItemDescriptor.tsx
index 292b1df8b68..ba34c989657 100644
--- a/public/app/features/dashboard/components/PanelEditor/OptionsPaneItemDescriptor.tsx
+++ b/public/app/features/dashboard/components/PanelEditor/OptionsPaneItemDescriptor.tsx
@@ -1,6 +1,7 @@
 import { selectors } from '@grafana/e2e-selectors';
 import { Field, Label } from '@grafana/ui';
 import React, { ReactNode } from 'react';
+import Highlighter from 'react-highlight-words';
 import { OptionsPaneCategoryDescriptor } from './OptionsPaneCategoryDescriptor';
 
 export interface OptionsPaneItemProps {
@@ -21,10 +22,10 @@ export class OptionsPaneItemDescriptor {
 
   constructor(public props: OptionsPaneItemProps) {}
 
-  getLabel(isSearching?: boolean): ReactNode {
+  getLabel(searchQuery?: string): ReactNode {
     const { title, description } = this.props;
 
-    if (!isSearching) {
+    if (!searchQuery) {
       // Do not render label for categories with only one child
       if (this.parent.props.title === title) {
         return null;
@@ -33,24 +34,30 @@ export class OptionsPaneItemDescriptor {
       return title;
     }
 
-    const categories: string[] = [];
+    const categories: React.ReactNode[] = [];
 
     if (this.parent.parent) {
-      categories.push(this.parent.parent.props.title);
+      categories.push(this.highlightWord(this.parent.parent.props.title, searchQuery));
     }
 
     if (this.parent.props.title !== title) {
-      categories.push(this.parent.props.title);
+      categories.push(this.highlightWord(this.parent.props.title, searchQuery));
     }
 
     return (
-      <Label description={description} category={categories}>
-        {title}
+      <Label description={description && this.highlightWord(description, searchQuery)} category={categories}>
+        {this.highlightWord(title, searchQuery)}
       </Label>
     );
   }
 
-  render(isSearching?: boolean) {
+  highlightWord(word: string, query: string) {
+    return (
+      <Highlighter textToHighlight={word} searchWords={[query]} highlightClassName={'search-fragment-highlight'} />
+    );
+  }
+
+  render(searchQuery?: string) {
     const { title, description, render, showIf, skipField } = this.props;
     const key = `${this.parent.props.id} ${title}`;
 
@@ -64,7 +71,7 @@ export class OptionsPaneItemDescriptor {
 
     return (
       <Field
-        label={this.getLabel(isSearching)}
+        label={this.getLabel(searchQuery)}
         description={description}
         key={key}
         aria-label={selectors.components.PanelEditor.OptionsPane.fieldLabel(key)}
diff --git a/public/app/features/dashboard/components/PanelEditor/OptionsPaneOptions.tsx b/public/app/features/dashboard/components/PanelEditor/OptionsPaneOptions.tsx
index 79ed40cf366..52661333999 100644
--- a/public/app/features/dashboard/components/PanelEditor/OptionsPaneOptions.tsx
+++ b/public/app/features/dashboard/components/PanelEditor/OptionsPaneOptions.tsx
@@ -139,9 +139,9 @@ function renderSearchHits(
         key="Normal options"
         forceOpen={1}
       >
-        {optionHits.map((hit) => hit.render(true))}
+        {optionHits.map((hit) => hit.render(searchQuery))}
       </OptionsPaneCategory>
-      {overrideHits.map((override) => override.render(true))}
+      {overrideHits.map((override) => override.render(searchQuery))}
     </div>
   );
 }
@@ -152,6 +152,11 @@ const getStyles = (theme: GrafanaTheme2) => ({
     display: flex;
     flex-direction: column;
     flex: 1 1 0;
+
+    .search-fragment-highlight {
+      color: ${theme.colors.warning.text};
+      background: transparent;
+    }
   `,
   searchBox: css`
     display: flex;
diff --git a/yarn.lock b/yarn.lock
index 951f9eed252..13046a4fef9 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -5894,6 +5894,13 @@
   dependencies:
     "@types/react" "*"
 
+"@types/react-highlight-words@^0.16.2":
+  version "0.16.2"
+  resolved "https://registry.yarnpkg.com/@types/react-highlight-words/-/react-highlight-words-0.16.2.tgz#c196d1016db7519c607997699f51cb262789fc90"
+  integrity sha512-l9HsbTTLGUQB6CwrI6/e89QDdnkTjLZt0K1MVAYyrzwVbWUNR6FiwwUpECwPoOcAg0iJjYf2uqonSuurdE91oQ==
+  dependencies:
+    "@types/react" "*"
+
 "@types/react-icon-base@*":
   version "2.1.3"
   resolved "https://registry.yarnpkg.com/@types/react-icon-base/-/react-icon-base-2.1.3.tgz#0faf840b854a9dbc3fa6fe1935c7c40eb4153114"
@@ -20742,6 +20749,15 @@ react-highlight-words@0.16.0:
     memoize-one "^4.0.0"
     prop-types "^15.5.8"
 
+react-highlight-words@0.17.0:
+  version "0.17.0"
+  resolved "https://registry.yarnpkg.com/react-highlight-words/-/react-highlight-words-0.17.0.tgz#e79a559a2de301548339d7216264d6cd0f1eed6f"
+  integrity sha512-uX1Qh5IGjnLuJT0Zok234QDwRC8h4hcVMnB99Cb7aquB1NlPPDiWKm0XpSZOTdSactvnClCk8LOmVlP+75dgHA==
+  dependencies:
+    highlight-words-core "^1.2.0"
+    memoize-one "^4.0.0"
+    prop-types "^15.5.8"
+
 react-hook-form@7.2.3:
   version "7.2.3"
   resolved "https://registry.yarnpkg.com/react-hook-form/-/react-hook-form-7.2.3.tgz#a4be9214cab3a6e6358f95d342da2e7ded37e3f0"