diff --git a/docs/components/content/examples/SelectMenuExampleCreatable.vue b/docs/components/content/examples/SelectMenuExampleCreatable.vue
index 6d81079997..1a867d9c6f 100644
--- a/docs/components/content/examples/SelectMenuExampleCreatable.vue
+++ b/docs/components/content/examples/SelectMenuExampleCreatable.vue
@@ -23,6 +23,7 @@ const labels = computed({
 
       // In a real app, you would make an API call to create the label
       const response = {
+        id: options.value.length + 1,
         name: label.name,
         color: generateColorFromString(label.name)
       }
diff --git a/docs/components/content/examples/SelectMenuExampleCreatableAlways.vue b/docs/components/content/examples/SelectMenuExampleCreatableAlways.vue
new file mode 100644
index 0000000000..df50b680f8
--- /dev/null
+++ b/docs/components/content/examples/SelectMenuExampleCreatableAlways.vue
@@ -0,0 +1,53 @@
+<script setup>
+const options = ref([
+  { id: 1, name: 'bug' },
+  { id: 2, name: 'documentation' },
+  { id: 3, name: 'duplicate' },
+  { id: 4, name: 'enhancement' },
+  { id: 5, name: 'good first issue' },
+  { id: 6, name: 'help wanted' },
+  { id: 7, name: 'invalid' },
+  { id: 8, name: 'question' },
+  { id: 9, name: 'wontfix' }
+])
+
+const selected = ref([])
+
+const labels = computed({
+  get: () => selected.value,
+  set: async (labels) => {
+    const promises = labels.map(async (label) => {
+      if (label.id) {
+        return label
+      }
+
+      // In a real app, you would make an API call to create the label
+      const response = {
+        id: options.value.length + 1,
+        name: label.name
+      }
+
+      options.value.push(response)
+
+      return response
+    })
+
+    selected.value = await Promise.all(promises)
+  }
+})
+</script>
+
+<template>
+  <USelectMenu
+    v-model="labels"
+    by="id"
+    name="labels"
+    :options="options"
+    option-attribute="name"
+    multiple
+    searchable
+    creatable
+    show-create-option-when="always"
+    placeholder="Select labels"
+  />
+</template>
diff --git a/docs/content/3.forms/4.select-menu.md b/docs/content/3.forms/4.select-menu.md
index 5c47db9f43..c31451b918 100644
--- a/docs/content/3.forms/4.select-menu.md
+++ b/docs/content/3.forms/4.select-menu.md
@@ -117,6 +117,8 @@ componentProps:
 
 By default, the search query will be kept after the menu is closed. To clear it on close, set the `clear-search-on-close` prop.
 
+You can also configure this globally through the `ui.selectMenu.default.clearSearchOnClose` config. Defaults to `false`.
+
 ::component-card
 ---
 baseProps:
@@ -158,6 +160,20 @@ componentProps:
 ---
 ::
 
+However, if you want to create options despite search query (apart from exact match), you can set the `show-create-option-when` prop to `'always'`.
+
+You can also configure this globally through the `ui.selectMenu.default.showCreateOptionWhen` config. Defaults to `empty`.
+
+Try to search for something that exists in the example below, but not an exact match.
+
+::component-example
+---
+component: 'select-menu-example-creatable-always'
+componentProps:
+  class: 'w-full lg:w-48'
+---
+::
+
 ## Popper
 
 Use the `popper` prop to customize the popper instance.
diff --git a/src/runtime/components/forms/SelectMenu.vue b/src/runtime/components/forms/SelectMenu.vue
index dfc9dc967b..e87abcab96 100644
--- a/src/runtime/components/forms/SelectMenu.vue
+++ b/src/runtime/components/forms/SelectMenu.vue
@@ -98,11 +98,11 @@
               </li>
             </component>
 
-            <component :is="searchable ? 'HComboboxOption' : 'HListboxOption'" v-if="creatable && queryOption && !filteredOptions.length" v-slot="{ active, selected }" :value="queryOption" as="template">
+            <component :is="searchable ? 'HComboboxOption' : 'HListboxOption'" v-if="creatable && createOption" v-slot="{ active, selected }" :value="createOption" as="template">
               <li :class="[uiMenu.option.base, uiMenu.option.rounded, uiMenu.option.padding, uiMenu.option.size, uiMenu.option.color, active ? uiMenu.option.active : uiMenu.option.inactive]">
                 <div :class="uiMenu.option.container">
-                  <slot name="option-create" :option="queryOption" :active="active" :selected="selected">
-                    <span :class="uiMenu.option.create">Create "{{ queryOption[optionAttribute] }}"</span>
+                  <slot name="option-create" :option="createOption" :active="active" :selected="selected">
+                    <span :class="uiMenu.option.create">Create "{{ createOption[optionAttribute] }}"</span>
                   </slot>
                 </div>
               </li>
@@ -247,7 +247,7 @@ export default defineComponent({
     },
     clearSearchOnClose: {
       type: Boolean,
-      default: () => configMenu.default.clearOnClose
+      default: () => configMenu.default.clearSearchOnClose
     },
     debounce: {
       type: Number,
@@ -257,6 +257,10 @@ export default defineComponent({
       type: Boolean,
       default: false
     },
+    showCreateOptionWhen: {
+      type: String as PropType<'always' | 'empty'>,
+      default: () => configMenu.default.showCreateOptionWhen
+    },
     placeholder: {
       type: String,
       default: null
@@ -438,8 +442,21 @@ export default defineComponent({
       })
     })
 
-    const queryOption = computed(() => {
-      return query.value === '' ? null : { [props.optionAttribute]: query.value }
+    const createOption = computed(() => {
+      if (query.value === '') {
+        return null
+      }
+      if (props.showCreateOptionWhen === 'empty' && filteredOptions.value.length) {
+        return null
+      }
+      if (props.showCreateOptionWhen === 'always') {
+        const existingOption = filteredOptions.value.find(option => ['string', 'number'].includes(typeof option) ? option === query.value : option[props.optionAttribute] === query.value)
+        if (existingOption) {
+          return null
+        }
+      }
+
+      return ['string', 'number'].includes(typeof props.modelValue) ? query.value : { [props.optionAttribute]: query.value }
     })
 
     function clearOnClose () {
@@ -494,7 +511,7 @@ export default defineComponent({
       trailingIconClass,
       trailingWrapperIconClass,
       filteredOptions,
-      queryOption,
+      createOption,
       query,
       onUpdate
     }
diff --git a/src/runtime/ui.config/forms/selectMenu.ts b/src/runtime/ui.config/forms/selectMenu.ts
index 9751d0091b..4add7aa878 100644
--- a/src/runtime/ui.config/forms/selectMenu.ts
+++ b/src/runtime/ui.config/forms/selectMenu.ts
@@ -22,7 +22,8 @@ export default {
   },
   default: {
     selectedIcon: 'i-heroicons-check-20-solid',
-    clearOnClose: false
+    clearSearchOnClose: false,
+    showCreateOptionWhen: 'empty'
   },
   arrow: {
     ...arrow,