diff --git a/public/app/features/users/UsersActionBar.test.tsx b/public/app/features/users/UsersActionBar.test.tsx
index 65cc7ffff49..eee54c936d7 100644
--- a/public/app/features/users/UsersActionBar.test.tsx
+++ b/public/app/features/users/UsersActionBar.test.tsx
@@ -65,9 +65,10 @@ describe('Render', () => {
     expect(screen.getByRole('link', { name: 'someUrl' })).toHaveAttribute('href', 'some/url');
   });
 
-  it('should not show invite button when externalUserMngInfo is set', () => {
+  it('should not show invite button when externalUserMngInfo is set and disableLoginForm is true', () => {
     const originalExternalUserMngInfo = config.externalUserMngInfo;
     config.externalUserMngInfo = 'truthy';
+    config.disableLoginForm = true;
 
     setup({
       canInvite: true,
@@ -77,4 +78,30 @@ describe('Render', () => {
     // Reset the disableLoginForm mock to its original value
     config.externalUserMngInfo = originalExternalUserMngInfo;
   });
+
+  it('should show invite button when externalUserMngInfo is not set and disableLoginForm is true', () => {
+    config.externalUserMngInfo = '';
+    config.disableLoginForm = true;
+
+    setup({
+      canInvite: true,
+    });
+
+    expect(screen.getByRole('link', { name: 'Invite' })).toHaveAttribute('href', 'org/users/invite');
+    // Reset the disableLoginForm mock to its original value
+    config.disableLoginForm = false;
+  });
+
+  it('should show invite button when externalUserMngInfo is set and disableLoginForm is false', () => {
+    const originalExternalUserMngInfo = config.externalUserMngInfo;
+    config.externalUserMngInfo = 'truthy';
+
+    setup({
+      canInvite: true,
+    });
+
+    expect(screen.getByRole('link', { name: 'Invite' })).toHaveAttribute('href', 'org/users/invite');
+    // Reset the disableLoginForm mock to its original value
+    config.externalUserMngInfo = originalExternalUserMngInfo;
+  });
 });
diff --git a/public/app/features/users/UsersActionBar.tsx b/public/app/features/users/UsersActionBar.tsx
index 78a3478f7fa..92c5805f06b 100644
--- a/public/app/features/users/UsersActionBar.tsx
+++ b/public/app/features/users/UsersActionBar.tsx
@@ -49,8 +49,10 @@ export const UsersActionBarUnconnected = ({
     { label: `Pending Invites (${pendingInvitesCount})`, value: 'invites' },
   ];
   const canAddToOrg: boolean = contextSrv.hasAccess(AccessControlAction.OrgUsersAdd, canInvite);
-  // Hide Invite button in case users are managed externally
-  const showInviteButton: boolean = canAddToOrg && !config.externalUserMngInfo;
+  // Show invite button in the following cases:
+  // 1) the instance is not a hosted Grafana instance (!config.externalUserMngInfo)
+  // 2) new basic auth users can be created for this instance (!config.disableLoginForm).
+  const showInviteButton: boolean = canAddToOrg && !(config.disableLoginForm && config.externalUserMngInfo);
 
   return (
     <div className="page-action-bar" data-testid="users-action-bar">