diff --git a/lib/components/SInputDropdown.vue b/lib/components/SInputDropdown.vue
index dcaf29b2..8d69ab3b 100644
--- a/lib/components/SInputDropdown.vue
+++ b/lib/components/SInputDropdown.vue
@@ -71,7 +71,7 @@ const inlineActiveIndex = ref(-1)
 
 const dropdownId = useId()
 
-const { isOpen, open } = useFlyout(container)
+const { isOpen, open, close } = useFlyout(container)
 const { inset, update: updatePosition } = useManualDropdownPosition(container, () => props.position)
 
 const isInlineSearch = computed(() => props.search === 'inline')
@@ -256,6 +256,20 @@ function handleInlineKeydown(event: KeyboardEvent) {
     return
   }
 
+  if (event.key === 'Escape') {
+    if (inlineQuery.value) {
+      inlineQuery.value = ''
+      inlineActiveIndex.value = -1
+      event.preventDefault()
+      event.stopPropagation()
+    } else {
+      close()
+      event.preventDefault()
+      event.stopPropagation()
+    }
+    return
+  }
+
   if (event.key === 'ArrowDown') {
     event.preventDefault()
     event.stopPropagation()
diff --git a/tests/components/SInputDropdown.spec.ts b/tests/components/SInputDropdown.spec.ts
index 1cadc994..d0ef583b 100644
--- a/tests/components/SInputDropdown.spec.ts
+++ b/tests/components/SInputDropdown.spec.ts
@@ -128,4 +128,111 @@ describe('components/SInputDropdown', () => {
       expect(box.attributes('aria-activedescendant')).toBeUndefined()
     })
   })
+
+  describe('Escape key handling for inline search', () => {
+    it('should clear search query when Escape is pressed with text', async () => {
+      const wrapper = mount(SInputDropdown, {
+        props: {
+          search: 'inline',
+          options: [
+            { label: 'Option 1', value: 1 },
+            { label: 'Option 2', value: 2 },
+            { label: 'Option 3', value: 3 }
+          ],
+          modelValue: []
+        }
+      })
+
+      // Open dropdown
+      await wrapper.find('.box').trigger('click')
+      await nextTick()
+
+      const input = wrapper.find('.inline-input')
+
+      // Type to create a search query
+      await input.setValue('Option')
+      await nextTick()
+
+      // Verify query exists
+      expect((input.element as HTMLInputElement).value).toBe('Option')
+
+      // Press Escape
+      await input.trigger('keydown', { key: 'Escape' })
+      await nextTick()
+
+      // Query should be cleared
+      expect((input.element as HTMLInputElement).value).toBe('')
+
+      // Dropdown should still be open
+      const box = wrapper.find('.box')
+      expect(box.attributes('aria-expanded')).toBe('true')
+    })
+
+    it('should close dropdown when Escape is pressed with empty query', async () => {
+      const wrapper = mount(SInputDropdown, {
+        props: {
+          search: 'inline',
+          options: [
+            { label: 'Option 1', value: 1 },
+            { label: 'Option 2', value: 2 }
+          ],
+          modelValue: []
+        }
+      })
+
+      // Open dropdown
+      await wrapper.find('.box').trigger('click')
+      await nextTick()
+
+      const box = wrapper.find('.box')
+      expect(box.attributes('aria-expanded')).toBe('true')
+
+      const input = wrapper.find('.inline-input')
+
+      // Press Escape with empty query
+      await input.trigger('keydown', { key: 'Escape' })
+      await nextTick()
+
+      // Dropdown should be closed
+      expect(box.attributes('aria-expanded')).toBe('false')
+    })
+
+    it('should clear query then close dropdown on consecutive Escape presses', async () => {
+      const wrapper = mount(SInputDropdown, {
+        props: {
+          search: 'inline',
+          options: [
+            { label: 'Option 1', value: 1 },
+            { label: 'Option 2', value: 2 }
+          ],
+          modelValue: []
+        }
+      })
+
+      // Open dropdown
+      await wrapper.find('.box').trigger('click')
+      await nextTick()
+
+      const input = wrapper.find('.inline-input')
+
+      // Type to create a search query
+      await input.setValue('Opt')
+      await nextTick()
+
+      const box = wrapper.find('.box')
+
+      // First Escape: clear query
+      await input.trigger('keydown', { key: 'Escape' })
+      await nextTick()
+
+      expect((input.element as HTMLInputElement).value).toBe('')
+      expect(box.attributes('aria-expanded')).toBe('true')
+
+      // Second Escape: close dropdown
+      await input.trigger('keydown', { key: 'Escape' })
+      await nextTick()
+
+      expect(box.attributes('aria-expanded')).toBe('false')
+    })
+  })
 })