diff --git a/packages/grafana-ui/src/components/Combobox/Combobox.tsx b/packages/grafana-ui/src/components/Combobox/Combobox.tsx
index 6a338006b08..6a18da04294 100644
--- a/packages/grafana-ui/src/components/Combobox/Combobox.tsx
+++ b/packages/grafana-ui/src/components/Combobox/Combobox.tsx
@@ -15,6 +15,7 @@ import { Stack } from '../Layout/Stack/Stack';
 import { Portal } from '../Portal/Portal';
 import { ScrollContainer } from '../ScrollContainer/ScrollContainer';
 
+import { itemFilter, itemToString } from './filter';
 import { getComboboxStyles, MENU_OPTION_HEIGHT, MENU_OPTION_HEIGHT_DESCRIPTION } from './getComboboxStyles';
 import { useComboboxFloat } from './useComboboxFloat';
 import { StaleResultError, useLatestAsyncCall } from './useLatestAsyncCall';
@@ -86,28 +87,6 @@ export type AutoSizeConditionals =
 
 type ComboboxProps<T extends string | number> = ComboboxBaseProps<T> & AutoSizeConditionals & ClearableConditionals<T>;
 
-export function itemToString<T extends string | number>(item?: ComboboxOption<T> | null) {
-  if (!item) {
-    return '';
-  }
-  if (item.label?.includes('Custom value: ')) {
-    return item.value.toString();
-  }
-  return item.label ?? item.value.toString();
-}
-
-function itemFilter<T extends string | number>(inputValue: string) {
-  const lowerCasedInputValue = inputValue.toLowerCase();
-
-  return (item: ComboboxOption<T>) => {
-    return (
-      !inputValue ||
-      item.label?.toLowerCase().includes(lowerCasedInputValue) ||
-      item.value?.toString().toLowerCase().includes(lowerCasedInputValue)
-    );
-  };
-}
-
 const noop = () => {};
 const asyncNoop = () => Promise.resolve([]);
 
diff --git a/packages/grafana-ui/src/components/Combobox/MultiCombobox.tsx b/packages/grafana-ui/src/components/Combobox/MultiCombobox.tsx
index 0af00d221e2..81abe9f6a00 100644
--- a/packages/grafana-ui/src/components/Combobox/MultiCombobox.tsx
+++ b/packages/grafana-ui/src/components/Combobox/MultiCombobox.tsx
@@ -13,15 +13,10 @@ import { Spinner } from '../Spinner/Spinner';
 import { Text } from '../Text/Text';
 import { Tooltip } from '../Tooltip';
 
-import {
-  ComboboxOption,
-  ComboboxBaseProps,
-  AutoSizeConditionals,
-  itemToString,
-  VIRTUAL_OVERSCAN_ITEMS,
-} from './Combobox';
+import { ComboboxOption, ComboboxBaseProps, AutoSizeConditionals, VIRTUAL_OVERSCAN_ITEMS } from './Combobox';
 import { OptionListItem } from './OptionListItem';
 import { ValuePill } from './ValuePill';
+import { itemFilter, itemToString } from './filter';
 import { getComboboxStyles, MENU_OPTION_HEIGHT, MENU_OPTION_HEIGHT_DESCRIPTION } from './getComboboxStyles';
 import { getMultiComboboxStyles } from './getMultiComboboxStyles';
 import { useComboboxFloat } from './useComboboxFloat';
@@ -48,8 +43,11 @@ export const MultiCombobox = <T extends string | number>(props: MultiComboboxPro
   }, [value, options, isAsync]);
 
   const styles = useStyles2(getComboboxStyles);
+  const [inputValue, setInputValue] = useState('');
 
-  const [items, baseSetItems] = useState(isAsync ? [] : options);
+  const [baseItems, baseSetItems] = useState(isAsync ? [] : options);
+
+  const items = useMemo(() => baseItems.filter(itemFilter(inputValue)), [baseItems, inputValue]);
 
   // TODO: Improve this with async
   useEffect(() => {
@@ -73,8 +71,6 @@ export const MultiCombobox = <T extends string | number>(props: MultiComboboxPro
     [selectedItems]
   );
 
-  const [inputValue, setInputValue] = useState('');
-
   const { getSelectedItemProps, getDropdownProps, removeSelectedItem } = useMultipleSelection({
     selectedItems, //initally selected items,
     onStateChange: ({ type, selectedItems: newSelectedItems }) => {
@@ -120,7 +116,6 @@ export const MultiCombobox = <T extends string | number>(props: MultiComboboxPro
         case useCombobox.stateChangeTypes.InputBlur:
           setInputValue('');
           setIsOpen(false);
-          return changes;
         default:
           return changes;
       }
diff --git a/packages/grafana-ui/src/components/Combobox/filter.ts b/packages/grafana-ui/src/components/Combobox/filter.ts
new file mode 100644
index 00000000000..09ab4653051
--- /dev/null
+++ b/packages/grafana-ui/src/components/Combobox/filter.ts
@@ -0,0 +1,23 @@
+import { ComboboxOption } from './Combobox';
+
+export function itemToString<T extends string | number>(item?: ComboboxOption<T> | null) {
+  if (!item) {
+    return '';
+  }
+  if (item.label?.includes('Custom value: ')) {
+    return item.value.toString();
+  }
+  return item.label ?? item.value.toString();
+}
+
+export function itemFilter<T extends string | number>(inputValue: string) {
+  const lowerCasedInputValue = inputValue.toLowerCase();
+
+  return (item: ComboboxOption<T>) => {
+    return (
+      !inputValue ||
+      item.label?.toLowerCase().includes(lowerCasedInputValue) ||
+      item.value?.toString().toLowerCase().includes(lowerCasedInputValue)
+    );
+  };
+}