diff --git a/packages/react/src/components/MultiSelect/FilterableMultiSelect.tsx b/packages/react/src/components/MultiSelect/FilterableMultiSelect.tsx
index 66d2ebebeafe..6b6bd8f25038 100644
--- a/packages/react/src/components/MultiSelect/FilterableMultiSelect.tsx
+++ b/packages/react/src/components/MultiSelect/FilterableMultiSelect.tsx
@@ -518,8 +518,6 @@ const FilterableMultiSelect = React.forwardRef(function FilterableMultiSelect<
         return changes;
       case InputBlur:
       case InputKeyDownEscape:
-        setInputFocused(false);
-        setInputValue('');
         setIsOpen(false);
         return changes;
       case FunctionToggleMenu:
@@ -714,6 +712,10 @@ const FilterableMultiSelect = React.forwardRef(function FilterableMultiSelect<
         }
       },
       onFocus: () => setInputFocused(true),
+      onBlur: () => {
+        !isOpen && setInputFocused(false);
+        setInputValue('');
+      },
     })
   );
   const menuProps = getMenuProps({}, { suppressRefError: true });
diff --git a/packages/react/src/components/MultiSelect/__tests__/FilterableMultiSelect-test.js b/packages/react/src/components/MultiSelect/__tests__/FilterableMultiSelect-test.js
index 433debc08b1d..a9f02f2329a0 100644
--- a/packages/react/src/components/MultiSelect/__tests__/FilterableMultiSelect-test.js
+++ b/packages/react/src/components/MultiSelect/__tests__/FilterableMultiSelect-test.js
@@ -170,6 +170,20 @@ describe('FilterableMultiSelect', () => {
     expect(screen.getByPlaceholderText('test')).toHaveDisplayValue(3);
   });
 
+  it('should clear input value when clicking on cross button', async () => {
+    render(<FilterableMultiSelect {...mockProps} placeholder="test" />);
+    await openMenu();
+
+    await userEvent.type(screen.getByPlaceholderText('test'), '3');
+
+    const clearButton = screen.getByRole('button', {
+      name: 'Clear selected item',
+    });
+    await userEvent.click(clearButton);
+
+    expect(screen.getByPlaceholderText('test')).toHaveDisplayValue('');
+  });
+
   it('should respect slug prop', async () => {
     const { container } = render(
       <FilterableMultiSelect {...mockProps} slug={<Slug />} />