diff --git a/packages/grafana-ui/src/components/Forms/RadioButtonGroup/RadioButtonGroup.tsx b/packages/grafana-ui/src/components/Forms/RadioButtonGroup/RadioButtonGroup.tsx
index dacd001a8a1..17134a109e7 100644
--- a/packages/grafana-ui/src/components/Forms/RadioButtonGroup/RadioButtonGroup.tsx
+++ b/packages/grafana-ui/src/components/Forms/RadioButtonGroup/RadioButtonGroup.tsx
@@ -9,6 +9,7 @@ import { useStyles2 } from '../../../themes';
 
 export interface RadioButtonGroupProps<T> {
   value?: T;
+  id?: string;
   disabled?: boolean;
   disabledOptions?: T[];
   options: Array<SelectableValue<T>>;
@@ -28,6 +29,7 @@ export function RadioButtonGroup<T>({
   disabled,
   disabledOptions,
   size = 'md',
+  id,
   className,
   fullWidth = false,
   autoFocus = false,
@@ -52,8 +54,9 @@ export function RadioButtonGroup<T>({
     },
     [onClick]
   );
-  const id = uniqueId('radiogroup-');
-  const groupName = useRef(id);
+
+  const internalId = id ?? uniqueId('radiogroup-');
+  const groupName = useRef(internalId);
   const styles = useStyles2(getStyles);
 
   const activeButtonRef = useRef<HTMLInputElement | null>(null);
@@ -76,7 +79,7 @@ export function RadioButtonGroup<T>({
             aria-label={o.ariaLabel}
             onChange={handleOnChange(o)}
             onClick={handleOnClick(o)}
-            id={`option-${o.value}-${id}`}
+            id={`option-${o.value}-${internalId}`}
             name={groupName.current}
             description={o.description}
             fullWidth={fullWidth}
diff --git a/pkg/tsdb/prometheus/time_series_query.go b/pkg/tsdb/prometheus/time_series_query.go
index b38ffd33d8b..a4d1b57e168 100644
--- a/pkg/tsdb/prometheus/time_series_query.go
+++ b/pkg/tsdb/prometheus/time_series_query.go
@@ -39,6 +39,8 @@ const (
 	varRateIntervalAlt = "${__rate_interval}"
 )
 
+const legendFormatAuto = "__auto"
+
 type TimeSeriesQueryType string
 
 const (
@@ -137,11 +139,14 @@ func (s *Service) executeTimeSeriesQuery(ctx context.Context, req *backend.Query
 }
 
 func formatLegend(metric model.Metric, query *PrometheusQuery) string {
-	var legend string
+	var legend = metric.String()
 
-	if query.LegendFormat == "" {
-		legend = metric.String()
-	} else {
+	if query.LegendFormat == legendFormatAuto {
+		// If we have labels set legend to empty string to utilize the auto naming system
+		if len(metric) > 0 {
+			legend = ""
+		}
+	} else if query.LegendFormat != "" {
 		result := legendFormat.ReplaceAllFunc([]byte(query.LegendFormat), func(in []byte) []byte {
 			labelName := strings.Replace(string(in), "{{", "", 1)
 			labelName = strings.Replace(labelName, "}}", "", 1)
@@ -335,8 +340,12 @@ func matrixToDataFrames(matrix model.Matrix, query *PrometheusQuery, frames data
 		timeField.Name = data.TimeSeriesTimeFieldName
 		timeField.Config = &data.FieldConfig{Interval: float64(query.Step.Milliseconds())}
 		valueField.Name = data.TimeSeriesValueFieldName
-		valueField.Config = &data.FieldConfig{DisplayNameFromDS: name}
 		valueField.Labels = tags
+
+		if name != "" {
+			valueField.Config = &data.FieldConfig{DisplayNameFromDS: name}
+		}
+
 		frames = append(frames, newDataFrame(name, "matrix", timeField, valueField))
 	}
 
diff --git a/pkg/tsdb/prometheus/time_series_query_test.go b/pkg/tsdb/prometheus/time_series_query_test.go
index fc50c3fb78f..f98d7484a8f 100644
--- a/pkg/tsdb/prometheus/time_series_query_test.go
+++ b/pkg/tsdb/prometheus/time_series_query_test.go
@@ -52,6 +52,30 @@ func TestPrometheus_timeSeriesQuery_formatLeged(t *testing.T) {
 
 		require.Equal(t, `{job="grafana"}`, formatLegend(metric, query))
 	})
+
+	t.Run("When legendFormat = __auto and no labels", func(t *testing.T) {
+		metric := map[p.LabelName]p.LabelValue{}
+
+		query := &PrometheusQuery{
+			LegendFormat: legendFormatAuto,
+			Expr:         `{job="grafana"}`,
+		}
+
+		require.Equal(t, `{job="grafana"}`, formatLegend(metric, query))
+	})
+
+	t.Run("When legendFormat = __auto with labels", func(t *testing.T) {
+		metric := map[p.LabelName]p.LabelValue{
+			p.LabelName("app"): p.LabelValue("backend"),
+		}
+
+		query := &PrometheusQuery{
+			LegendFormat: legendFormatAuto,
+			Expr:         `{job="grafana"}`,
+		}
+
+		require.Equal(t, "", formatLegend(metric, query))
+	})
 }
 
 func TestPrometheus_timeSeriesQuery_parseTimeSeriesQuery(t *testing.T) {
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.test.tsx b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.test.tsx
new file mode 100644
index 00000000000..ac6b5132951
--- /dev/null
+++ b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.test.tsx
@@ -0,0 +1,76 @@
+import React from 'react';
+import { render, screen } from '@testing-library/react';
+import { PromQuery } from '../../types';
+import { getQueryWithDefaults } from '../types';
+import { CoreApp } from '@grafana/data';
+import { PromQueryBuilderOptions } from './PromQueryBuilderOptions';
+import { selectOptionInTest } from '@grafana/ui';
+
+describe('PromQueryBuilderOptions', () => {
+  it('Can change query type', async () => {
+    const { props } = setup();
+
+    screen.getByTitle('Click to edit options').click();
+    expect(screen.getByLabelText('Range')).toBeChecked();
+
+    screen.getByLabelText('Instant').click();
+
+    expect(props.onChange).toHaveBeenCalledWith({
+      ...props.query,
+      instant: true,
+      range: false,
+      exemplar: false,
+    });
+  });
+
+  it('Legend format default to Auto', async () => {
+    setup();
+    expect(screen.getByText('Legend: Auto')).toBeInTheDocument();
+  });
+
+  it('Can change legend format to verbose', async () => {
+    const { props } = setup();
+
+    screen.getByTitle('Click to edit options').click();
+
+    let legendModeSelect = screen.getByText('Auto').parentElement!;
+    legendModeSelect.click();
+
+    await selectOptionInTest(legendModeSelect as HTMLElement, 'Verbose');
+
+    expect(props.onChange).toHaveBeenCalledWith({
+      ...props.query,
+      legendFormat: '',
+    });
+  });
+
+  it('Can change legend format to custom', async () => {
+    const { props } = setup();
+
+    screen.getByTitle('Click to edit options').click();
+
+    let legendModeSelect = screen.getByText('Auto').parentElement!;
+    legendModeSelect.click();
+
+    await selectOptionInTest(legendModeSelect as HTMLElement, 'Custom');
+
+    expect(props.onChange).toHaveBeenCalledWith({
+      ...props.query,
+      legendFormat: '{{label_name}}',
+    });
+  });
+});
+
+function setup(queryOverrides: Partial<PromQuery> = {}) {
+  const props = {
+    query: {
+      ...getQueryWithDefaults({ refId: 'A' } as PromQuery, CoreApp.PanelEditor),
+      queryOverrides,
+    },
+    onRunQuery: jest.fn(),
+    onChange: jest.fn(),
+  };
+
+  const { container } = render(<PromQueryBuilderOptions {...props} />);
+  return { container, props };
+}
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.tsx b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.tsx
index 64f1a5ea653..33bcc9ae8e4 100644
--- a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.tsx
+++ b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryBuilderOptions.tsx
@@ -6,6 +6,7 @@ import { QueryOptionGroup } from '../shared/QueryOptionGroup';
 import { PromQuery } from '../../types';
 import { FORMAT_OPTIONS, INTERVAL_FACTOR_OPTIONS } from '../../components/PromQueryEditor';
 import { getQueryTypeChangeHandler, getQueryTypeOptions } from '../../components/PromExploreExtraField';
+import { getLegendModeLabel, PromQueryLegendEditor } from './PromQueryLegendEditor';
 
 export interface Props {
   query: PromQuery;
@@ -15,18 +16,11 @@ export interface Props {
 }
 
 export const PromQueryBuilderOptions = React.memo<Props>(({ query, app, onChange, onRunQuery }) => {
-  const formatOption = FORMAT_OPTIONS.find((option) => option.value === query.format) || FORMAT_OPTIONS[0];
-
   const onChangeFormat = (value: SelectableValue<string>) => {
     onChange({ ...query, format: value.value });
     onRunQuery();
   };
 
-  const onLegendFormatChanged = (evt: React.FocusEvent<HTMLInputElement>) => {
-    onChange({ ...query, legendFormat: evt.currentTarget.value });
-    onRunQuery();
-  };
-
   const onChangeStep = (evt: React.FocusEvent<HTMLInputElement>) => {
     onChange({ ...query, interval: evt.currentTarget.value });
     onRunQuery();
@@ -46,15 +40,14 @@ export const PromQueryBuilderOptions = React.memo<Props>(({ query, app, onChange
     onRunQuery();
   };
 
+  const formatOption = FORMAT_OPTIONS.find((option) => option.value === query.format) || FORMAT_OPTIONS[0];
+  const queryTypeValue = getQueryTypeValue(query);
+  const queryTypeLabel = queryTypeOptions.find((x) => x.value === queryTypeValue)!.label;
+
   return (
     <EditorRow>
-      <QueryOptionGroup title="Options" collapsedInfo={getCollapsedInfo(query, formatOption)}>
-        <EditorField
-          label="Legend"
-          tooltip="Series name override or template. Ex. {{hostname}} will be replaced with label value for hostname."
-        >
-          <Input placeholder="auto" defaultValue={query.legendFormat} onBlur={onLegendFormatChanged} />
-        </EditorField>
+      <QueryOptionGroup title="Options" collapsedInfo={getCollapsedInfo(query, formatOption.label!, queryTypeLabel)}>
+        <PromQueryLegendEditor query={query} onChange={onChange} onRunQuery={onRunQuery} />
         <EditorField
           label="Min step"
           tooltip={
@@ -73,12 +66,16 @@ export const PromQueryBuilderOptions = React.memo<Props>(({ query, app, onChange
             defaultValue={query.interval}
           />
         </EditorField>
-
         <EditorField label="Format">
           <Select value={formatOption} allowCustomValue onChange={onChangeFormat} options={FORMAT_OPTIONS} />
         </EditorField>
         <EditorField label="Type">
-          <RadioButtonGroup options={queryTypeOptions} value={getQueryTypeValue(query)} onChange={onQueryTypeChange} />
+          <RadioButtonGroup
+            id="options.query.type"
+            options={queryTypeOptions}
+            value={queryTypeValue}
+            onChange={onQueryTypeChange}
+          />
         </EditorField>
         {shouldShowExemplarSwitch(query, app) && (
           <EditorField label="Exemplars">
@@ -114,20 +111,17 @@ function getQueryTypeValue(query: PromQuery) {
   return query.range && query.instant ? 'both' : query.instant ? 'instant' : 'range';
 }
 
-function getCollapsedInfo(query: PromQuery, formatOption: SelectableValue<string>): string[] {
+function getCollapsedInfo(query: PromQuery, formatOption: string, queryType: string): string[] {
   const items: string[] = [];
 
-  if (query.legendFormat) {
-    items.push(`Legend: ${query.legendFormat}`);
-  }
-
-  items.push(`Format: ${formatOption.label}`);
+  items.push(`Legend: ${getLegendModeLabel(query.legendFormat)}`);
+  items.push(`Format: ${formatOption}`);
 
   if (query.interval) {
     items.push(`Step ${query.interval}`);
   }
 
-  items.push(`Type: ${getQueryTypeValue(query)}`);
+  items.push(`Type: ${queryType}`);
 
   if (query.exemplar) {
     items.push(`Exemplars: true`);
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryCodeEditor.tsx b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryCodeEditor.tsx
index 10d6403d62d..6d76ce7d793 100644
--- a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryCodeEditor.tsx
+++ b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryCodeEditor.tsx
@@ -2,18 +2,37 @@ import React from 'react';
 import { PromQueryEditorProps } from '../../components/types';
 import PromQueryField from '../../components/PromQueryField';
 import { testIds } from '../../components/PromQueryEditor';
+import { useStyles2 } from '@grafana/ui';
+import { css } from '@emotion/css';
+import { GrafanaTheme2 } from '@grafana/data';
 
 export function PromQueryCodeEditor({ query, datasource, range, onRunQuery, onChange, data }: PromQueryEditorProps) {
+  const styles = useStyles2(getStyles);
+
   return (
-    <PromQueryField
-      datasource={datasource}
-      query={query}
-      range={range}
-      onRunQuery={onRunQuery}
-      onChange={onChange}
-      history={[]}
-      data={data}
-      data-testid={testIds.editor}
-    />
+    <div className={styles.wrapper}>
+      <PromQueryField
+        datasource={datasource}
+        query={query}
+        range={range}
+        onRunQuery={onRunQuery}
+        onChange={onChange}
+        history={[]}
+        data={data}
+        data-testid={testIds.editor}
+      />
+    </div>
   );
 }
+
+const getStyles = (theme: GrafanaTheme2) => {
+  return {
+    // This wrapper styling can be removed after the old PromQueryEditor is removed.
+    // This is removing margin bottom on the old legacy inline form styles
+    wrapper: css`
+      .gf-form {
+        margin-bottom: 0;
+      }
+    `,
+  };
+};
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryEditorSelector.test.tsx b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryEditorSelector.test.tsx
index 16c73bfe641..1b7acc5667a 100644
--- a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryEditorSelector.test.tsx
+++ b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryEditorSelector.test.tsx
@@ -85,7 +85,6 @@ describe('PromQueryEditorSelector', () => {
     expect(onChange).toBeCalledWith({
       refId: 'A',
       expr: defaultQuery.expr,
-      instant: false,
       range: true,
       editorMode: QueryEditorMode.Builder,
     });
@@ -100,7 +99,6 @@ describe('PromQueryEditorSelector', () => {
     expect(onChange).toBeCalledWith({
       refId: 'A',
       expr: defaultQuery.expr,
-      instant: false,
       range: true,
       editorMode: QueryEditorMode.Builder,
       editorPreview: true,
@@ -122,7 +120,6 @@ describe('PromQueryEditorSelector', () => {
     expect(onChange).toBeCalledWith({
       refId: 'A',
       expr: defaultQuery.expr,
-      instant: false,
       range: true,
       editorMode: QueryEditorMode.Code,
     });
@@ -134,7 +131,6 @@ describe('PromQueryEditorSelector', () => {
     expect(onChange).toBeCalledWith({
       refId: 'A',
       expr: defaultQuery.expr,
-      instant: false,
       range: true,
       editorMode: QueryEditorMode.Explain,
     });
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryLegendEditor.tsx b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryLegendEditor.tsx
new file mode 100644
index 00000000000..3a9ba54a9a4
--- /dev/null
+++ b/public/app/plugins/datasource/prometheus/querybuilder/components/PromQueryLegendEditor.tsx
@@ -0,0 +1,112 @@
+import React, { useRef } from 'react';
+import { EditorField } from '@grafana/experimental';
+import { SelectableValue } from '@grafana/data';
+import { Input, Select } from '@grafana/ui';
+import { LegendFormatMode, PromQuery } from '../../types';
+
+export interface Props {
+  query: PromQuery;
+  onChange: (update: PromQuery) => void;
+  onRunQuery: () => void;
+}
+
+const legendModeOptions = [
+  {
+    label: 'Auto',
+    value: LegendFormatMode.Auto,
+    description: 'Only includes unique labels',
+  },
+  { label: 'Verbose', value: LegendFormatMode.Verbose, description: 'All label names and values' },
+  { label: 'Custom', value: LegendFormatMode.Custom, description: 'Provide a naming template' },
+];
+
+/**
+ * Tests for this component are on the parent level (PromQueryBuilderOptions).
+ */
+export const PromQueryLegendEditor = React.memo<Props>(({ query, onChange, onRunQuery }) => {
+  const mode = getLegendMode(query.legendFormat);
+  const inputRef = useRef<HTMLInputElement | null>(null);
+
+  const onLegendFormatChanged = (evt: React.FocusEvent<HTMLInputElement>) => {
+    let legendFormat = evt.currentTarget.value;
+    if (legendFormat.length === 0) {
+      legendFormat = LegendFormatMode.Auto;
+    }
+    onChange({ ...query, legendFormat });
+    onRunQuery();
+  };
+
+  const onLegendModeChanged = (value: SelectableValue<LegendFormatMode>) => {
+    switch (value.value!) {
+      case LegendFormatMode.Auto:
+        onChange({ ...query, legendFormat: LegendFormatMode.Auto });
+        break;
+      case LegendFormatMode.Custom:
+        onChange({ ...query, legendFormat: '{{label_name}}' });
+        setTimeout(() => {
+          inputRef.current?.focus();
+          inputRef.current?.setSelectionRange(2, 12, 'forward');
+        }, 10);
+        break;
+      case LegendFormatMode.Verbose:
+        onChange({ ...query, legendFormat: '' });
+        break;
+    }
+    onRunQuery();
+  };
+
+  return (
+    <EditorField
+      label="Legend"
+      tooltip="Series name override or template. Ex. {{hostname}} will be replaced with label value for hostname."
+    >
+      <>
+        {mode === LegendFormatMode.Custom && (
+          <Input
+            id="legendFormat"
+            width={22}
+            placeholder="auto"
+            defaultValue={query.legendFormat}
+            onBlur={onLegendFormatChanged}
+            ref={inputRef}
+          />
+        )}
+        {mode !== LegendFormatMode.Custom && (
+          <Select
+            inputId="legend.mode"
+            isSearchable={false}
+            placeholder="Select legend mode"
+            options={legendModeOptions}
+            width={22}
+            onChange={onLegendModeChanged}
+            value={legendModeOptions.find((x) => x.value === mode)}
+          />
+        )}
+      </>
+    </EditorField>
+  );
+});
+
+PromQueryLegendEditor.displayName = 'PromQueryLegendEditor';
+
+function getLegendMode(legendFormat: string | undefined) {
+  // This special value means the new smart minimal series naming
+  if (legendFormat === LegendFormatMode.Auto) {
+    return LegendFormatMode.Auto;
+  }
+
+  // Missing or empty legend format is the old verbose behavior
+  if (legendFormat == null || legendFormat === '') {
+    return LegendFormatMode.Verbose;
+  }
+
+  return LegendFormatMode.Custom;
+}
+
+export function getLegendModeLabel(legendFormat: string | undefined) {
+  const mode = getLegendMode(legendFormat);
+  if (mode !== LegendFormatMode.Custom) {
+    return legendModeOptions.find((x) => x.value === mode)?.label;
+  }
+  return legendFormat;
+}
diff --git a/public/app/plugins/datasource/prometheus/querybuilder/types.ts b/public/app/plugins/datasource/prometheus/querybuilder/types.ts
index 5b284d635db..0bd71d3a093 100644
--- a/public/app/plugins/datasource/prometheus/querybuilder/types.ts
+++ b/public/app/plugins/datasource/prometheus/querybuilder/types.ts
@@ -1,5 +1,5 @@
 import { CoreApp } from '@grafana/data';
-import { PromQuery } from '../types';
+import { LegendFormatMode, PromQuery } from '../types';
 import { VisualQueryBinary } from './shared/LokiAndPromQueryModellerBase';
 import { QueryBuilderLabelFilter, QueryBuilderOperation, QueryEditorMode } from './shared/types';
 
@@ -69,7 +69,7 @@ export function getQueryWithDefaults(query: PromQuery, app: CoreApp | undefined)
   }
 
   if (query.expr == null) {
-    result = { ...result, expr: '' };
+    result = { ...result, expr: '', legendFormat: LegendFormatMode.Auto };
   }
 
   // Default to range query
@@ -78,12 +78,8 @@ export function getQueryWithDefaults(query: PromQuery, app: CoreApp | undefined)
   }
 
   // In explore we default to both instant & range
-  if (query.instant == null && query.range == null) {
-    if (app === CoreApp.Explore) {
-      result = { ...result, instant: true };
-    } else {
-      result = { ...result, instant: false, range: true };
-    }
+  if (query.instant == null && app === CoreApp.Explore) {
+    result = { ...result, instant: true };
   }
 
   return result;
diff --git a/public/app/plugins/datasource/prometheus/types.ts b/public/app/plugins/datasource/prometheus/types.ts
index 08a27ffe2d8..629028914ca 100644
--- a/public/app/plugins/datasource/prometheus/types.ts
+++ b/public/app/plugins/datasource/prometheus/types.ts
@@ -153,3 +153,14 @@ export interface PromLabelQueryResponse {
   };
   cancelled?: boolean;
 }
+
+/**
+ * Auto = query.legendFormat == '__auto'
+ * Verbose = query.legendFormat == null/undefined/''
+ * Custom query.legendFormat.length > 0 && query.legendFormat !== '__auto'
+ */
+export enum LegendFormatMode {
+  Auto = '__auto',
+  Verbose = '__verbose',
+  Custom = '__custom',
+}