diff --git a/packages/grafana-schema/src/schema/dashboard/v2_examples.ts b/packages/grafana-schema/src/schema/dashboard/v2_examples.ts
index 651d858e799..4186fccd0ce 100644
--- a/packages/grafana-schema/src/schema/dashboard/v2_examples.ts
+++ b/packages/grafana-schema/src/schema/dashboard/v2_examples.ts
@@ -327,6 +327,7 @@ export const handyTestingSchema: Spec = {
         query: 'option1, option2',
         skipUrlSync: false,
         allowCustomValue: true,
+        valuesFormat: 'csv',
       },
     },
     {
diff --git a/public/app/features/dashboard-scene/serialization/DashboardSceneSerializer.test.ts b/public/app/features/dashboard-scene/serialization/DashboardSceneSerializer.test.ts
index 9914559093a..a0d723a5edc 100644
--- a/public/app/features/dashboard-scene/serialization/DashboardSceneSerializer.test.ts
+++ b/public/app/features/dashboard-scene/serialization/DashboardSceneSerializer.test.ts
@@ -844,6 +844,7 @@ describe('DashboardSceneSerializer', () => {
               query: 'app1',
               skipUrlSync: false,
               allowCustomValue: true,
+              valuesFormat: 'csv',
             },
           },
         ]);
diff --git a/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModel.test.ts.snap b/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModel.test.ts.snap
index f119b3c611c..fb6d2b8d259 100644
--- a/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModel.test.ts.snap
+++ b/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModel.test.ts.snap
@@ -294,6 +294,7 @@ exports[`Given a scene with custom quick ranges should save quick ranges to save
         "options": [],
         "query": "a, b, c",
         "type": "custom",
+        "valuesFormat": "csv",
       },
       {
         "current": {
@@ -679,6 +680,7 @@ exports[`transformSceneToSaveModel Given a scene with rows Should transform back
         "options": [],
         "query": "A,B,C,D,E,F,E,G,H,I,J,K,L",
         "type": "custom",
+        "valuesFormat": "csv",
       },
       {
         "current": {
@@ -697,6 +699,7 @@ exports[`transformSceneToSaveModel Given a scene with rows Should transform back
         "options": [],
         "query": "Bob : 1, Rob : 2,Sod : 3, Hod : 4, Cod : 5",
         "type": "custom",
+        "valuesFormat": "csv",
       },
     ],
   },
@@ -1019,6 +1022,7 @@ exports[`transformSceneToSaveModel Given a simple scene with custom settings Sho
         "options": [],
         "query": "a, b, c",
         "type": "custom",
+        "valuesFormat": "csv",
       },
       {
         "current": {
@@ -1378,6 +1382,7 @@ exports[`transformSceneToSaveModel Given a simple scene with variables Should tr
         "options": [],
         "query": "a, b, c",
         "type": "custom",
+        "valuesFormat": "csv",
       },
       {
         "current": {
diff --git a/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModelSchemaV2.test.ts.snap b/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModelSchemaV2.test.ts.snap
index 6bddc68fb09..ddffb97ab42 100644
--- a/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModelSchemaV2.test.ts.snap
+++ b/public/app/features/dashboard-scene/serialization/__snapshots__/transformSceneToSaveModelSchemaV2.test.ts.snap
@@ -208,6 +208,7 @@ exports[`transformSceneToSaveModelSchemaV2 should transform scene to save model
         ],
         "query": "option1, option2",
         "skipUrlSync": false,
+        "valuesFormat": "csv",
       },
     },
     {
diff --git a/public/app/features/dashboard-scene/serialization/sceneVariablesSetToVariables.test.ts b/public/app/features/dashboard-scene/serialization/sceneVariablesSetToVariables.test.ts
index 8772646b496..63d73994624 100644
--- a/public/app/features/dashboard-scene/serialization/sceneVariablesSetToVariables.test.ts
+++ b/public/app/features/dashboard-scene/serialization/sceneVariablesSetToVariables.test.ts
@@ -390,6 +390,7 @@ describe('sceneVariablesSetToVariables', () => {
       ],
       "query": "test,test1,test2",
       "type": "custom",
+      "valuesFormat": "csv",
     }
     `);
   });
@@ -1180,6 +1181,7 @@ describe('sceneVariablesSetToVariables', () => {
         ],
         "query": "test,test1,test2",
         "skipUrlSync": false,
+        "valuesFormat": "csv",
       },
     }
     `);
diff --git a/public/app/features/dashboard-scene/settings/variables/components/CustomVariableForm.test.tsx b/public/app/features/dashboard-scene/settings/variables/components/CustomVariableForm.test.tsx
index 924f9fa5702..34c06aea3ed 100644
--- a/public/app/features/dashboard-scene/settings/variables/components/CustomVariableForm.test.tsx
+++ b/public/app/features/dashboard-scene/settings/variables/components/CustomVariableForm.test.tsx
@@ -1,4 +1,5 @@
-import { render, fireEvent } from '@testing-library/react';
+import { fireEvent, render, screen } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
 
 import { selectors } from '@grafana/e2e-selectors';
 
@@ -130,4 +131,71 @@ describe('CustomVariableForm', () => {
     expect(onMultiChange).not.toHaveBeenCalled();
     expect(onIncludeAllChange).not.toHaveBeenCalled();
   });
+
+  describe('JSON values format', () => {
+    test('should render the form fields correctly', async () => {
+      const { getByTestId, queryByTestId } = render(
+        <CustomVariableForm
+          query="query"
+          valuesFormat="json"
+          multi={true}
+          allowCustomValue={true}
+          includeAll={true}
+          allValue="custom value"
+          onQueryChange={onQueryChange}
+          onMultiChange={onMultiChange}
+          onIncludeAllChange={onIncludeAllChange}
+          onAllValueChange={onAllValueChange}
+          onAllowCustomValueChange={onAllowCustomValueChange}
+        />
+      );
+
+      await userEvent.click(screen.getByText('Object values in a JSON array'));
+
+      const multiCheckbox = getByTestId(
+        selectors.pages.Dashboard.Settings.Variables.Edit.General.selectionOptionsMultiSwitch
+      );
+      const allowCustomValueCheckbox = queryByTestId(
+        selectors.pages.Dashboard.Settings.Variables.Edit.General.selectionOptionsAllowCustomValueSwitch
+      );
+      const includeAllCheckbox = getByTestId(
+        selectors.pages.Dashboard.Settings.Variables.Edit.General.selectionOptionsIncludeAllSwitch
+      );
+      const allValueInput = queryByTestId(
+        selectors.pages.Dashboard.Settings.Variables.Edit.General.selectionOptionsCustomAllInput
+      );
+
+      expect(multiCheckbox).toBeInTheDocument();
+      expect(multiCheckbox).toBeChecked();
+      expect(includeAllCheckbox).toBeInTheDocument();
+      expect(includeAllCheckbox).toBeChecked();
+
+      expect(allowCustomValueCheckbox).not.toBeInTheDocument();
+      expect(allValueInput).not.toBeInTheDocument();
+    });
+
+    test('should display validation error', async () => {
+      const validationError = new Error('Ooops! Validation error.');
+
+      const { findByText } = render(
+        <CustomVariableForm
+          query="query"
+          valuesFormat="json"
+          queryValidationError={validationError}
+          multi={false}
+          includeAll={false}
+          onQueryChange={onQueryChange}
+          onMultiChange={onMultiChange}
+          onIncludeAllChange={onIncludeAllChange}
+          onAllValueChange={onAllValueChange}
+          onAllowCustomValueChange={onAllowCustomValueChange}
+        />
+      );
+
+      await userEvent.click(screen.getByText('Object values in a JSON array'));
+
+      const errorEl = await findByText(validationError.message);
+      expect(errorEl).toBeInTheDocument();
+    });
+  });
 });
diff --git a/public/app/features/dashboard-scene/utils/variables.test.ts b/public/app/features/dashboard-scene/utils/variables.test.ts
index e627bd01866..e8126023fc9 100644
--- a/public/app/features/dashboard-scene/utils/variables.test.ts
+++ b/public/app/features/dashboard-scene/utils/variables.test.ts
@@ -103,6 +103,7 @@ describe('when creating variables objects', () => {
       text: 'a',
       type: 'custom',
       value: 'a',
+      valuesFormat: 'csv',
       hide: 0,
     });
   });