diff --git a/public/app/features/datasources/hooks.test.ts b/public/app/features/datasources/hooks.test.ts
new file mode 100644
index 00000000000..a36f8ac2e8b
--- /dev/null
+++ b/public/app/features/datasources/hooks.test.ts
@@ -0,0 +1,114 @@
+import { renderHook, act } from '@testing-library/react';
+
+import { TestDataSettings } from '../query/state/mocks/mockDataSource';
+
+import { useRecentlyUsedDataSources } from './hooks';
+
+// Mock react-use's useLocalStorage
+jest.mock('react-use', () => ({
+  useLocalStorage: jest.fn(),
+}));
+
+const mockUseLocalStorage = jest.requireMock('react-use').useLocalStorage;
+
+describe('useRecentlyUsedDataSources', () => {
+  let mockSetStorage: jest.Mock;
+
+  beforeEach(() => {
+    jest.clearAllMocks();
+    mockSetStorage = jest.fn();
+
+    // Default mock implementation
+    mockUseLocalStorage.mockReturnValue([[], mockSetStorage]);
+  });
+
+  describe('basic functionality', () => {
+    it('should return an array and a function', () => {
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+
+      expect(Array.isArray(result.current[0])).toBe(true);
+      expect(typeof result.current[1]).toBe('function');
+    });
+
+    it('should return stored values from local storage', () => {
+      const storedValues = ['uid1', 'uid2', 'uid3'];
+      mockUseLocalStorage.mockReturnValue([storedValues, mockSetStorage]);
+
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+
+      expect(result.current[0]).toEqual(storedValues);
+    });
+  });
+
+  describe('adding data sources', () => {
+    it('should add a new data source to an empty list', () => {
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+      const dataSource = { ...TestDataSettings, uid: 'test-uid' };
+
+      act(() => {
+        result.current[1](dataSource);
+      });
+
+      expect(mockSetStorage).toHaveBeenCalledWith(['test-uid']);
+    });
+
+    it('should add a new data source to the end of existing list', () => {
+      const existingValues = ['uid1', 'uid2'];
+      mockUseLocalStorage.mockReturnValue([existingValues, mockSetStorage]);
+
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+      const dataSource = { ...TestDataSettings, uid: 'test-uid' };
+
+      act(() => {
+        result.current[1](dataSource);
+      });
+
+      expect(mockSetStorage).toHaveBeenCalledWith(['uid1', 'uid2', 'test-uid']);
+    });
+
+    it('should not store built-in data sources', () => {
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+      const builtInDataSource = { ...TestDataSettings, meta: { ...TestDataSettings.meta, builtIn: true } };
+
+      act(() => {
+        result.current[1](builtInDataSource);
+      });
+
+      expect(mockSetStorage).not.toHaveBeenCalled();
+    });
+  });
+
+  describe('duplicate handling', () => {
+    it('should move existing data source to the end when adding duplicate', () => {
+      const existingValues = ['uid1', 'test-uid', 'uid3'];
+      mockUseLocalStorage.mockReturnValue([existingValues, mockSetStorage]);
+
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+      const dataSource = { ...TestDataSettings, uid: 'test-uid' };
+
+      act(() => {
+        result.current[1](dataSource);
+      });
+
+      // uid2 should be moved to the end, others should maintain order
+      expect(mockSetStorage).toHaveBeenCalledWith(['uid1', 'uid3', 'test-uid']);
+    });
+  });
+
+  describe('maximum items limit', () => {
+    it('should limit the array to 5 items when adding to a full list', () => {
+      const existingValues = ['uid1', 'uid2', 'uid3', 'uid4', 'uid5'];
+      mockUseLocalStorage.mockReturnValue([existingValues, mockSetStorage]);
+
+      const { result } = renderHook(() => useRecentlyUsedDataSources());
+      const dataSource = { ...TestDataSettings, uid: 'test-uid' };
+
+      act(() => {
+        result.current[1](dataSource);
+      });
+
+      // Should remove the first item and add new one at the end
+      expect(mockSetStorage).toHaveBeenCalledWith(['uid2', 'uid3', 'uid4', 'uid5', 'test-uid']);
+    });
+  });
+});
diff --git a/public/app/features/datasources/hooks.ts b/public/app/features/datasources/hooks.ts
index 3a08d716cb2..73c356c4ff8 100644
--- a/public/app/features/datasources/hooks.ts
+++ b/public/app/features/datasources/hooks.ts
@@ -28,7 +28,12 @@ export function useRecentlyUsedDataSources(): [string[], (ds: DataSourceInstance
         );
         setStorage([...value, ds.uid]);
       } else {
-        setStorage([...value, ds.uid].slice(1, 6));
+        const newArray = [...value, ds.uid];
+        if (newArray.length > 5) {
+          setStorage(newArray.slice(1, 6));
+        } else {
+          setStorage(newArray);
+        }
       }
     },
     [value, setStorage]