diff --git a/.changeset/tasty-spies-spend.md b/.changeset/tasty-spies-spend.md
new file mode 100644
index 0000000000..76894fbc20
--- /dev/null
+++ b/.changeset/tasty-spies-spend.md
@@ -0,0 +1,6 @@
+---
+"@gradio/dropdown": patch
+"gradio": patch
+---
+
+fix:Retain dropdown value if choices have been changed
diff --git a/js/dropdown/dropdown.test.ts b/js/dropdown/dropdown.test.ts
index e9b53620c2..e27b7a4eab 100644
--- a/js/dropdown/dropdown.test.ts
+++ b/js/dropdown/dropdown.test.ts
@@ -124,8 +124,6 @@ describe("Dropdown", () => {
 		const item: HTMLInputElement = getByLabelText(
 			"Dropdown"
 		) as HTMLInputElement;
-		const change_event = listen("change");
-		const select_event = listen("select");
 
 		item.focus();
 		await event.keyboard("other");
@@ -135,7 +133,7 @@ describe("Dropdown", () => {
 		const { getByLabelText, listen } = await render(Dropdown, {
 			show_label: true,
 			loading_status,
-			value: "default",
+			value: "new ",
 			label: "Dropdown",
 			max_choices: undefined,
 			allow_custom_value: true,
@@ -156,7 +154,7 @@ describe("Dropdown", () => {
 		await event.keyboard("kevin");
 		await item.blur();
 
-		assert.equal(item.value, "kevin");
+		assert.equal(item.value, "new kevin");
 		assert.equal(change_event.callCount, 1);
 	});
 
@@ -407,4 +405,37 @@ describe("Dropdown", () => {
 		await item.blur();
 		expect(item.value).toBe("apple");
 	});
+
+	test("updating choices should keep the dropdown focus-able and change the choice name", async () => {
+		const { getByLabelText, component } = await render(Dropdown, {
+			show_label: true,
+			loading_status,
+			value: "apple_internal_value",
+			allow_custom_value: false,
+			label: "Dropdown",
+			choices: [
+				["apple_choice", "apple_internal_value"],
+				["zebra_choice", "zebra_internal_value"]
+			],
+			filterable: true,
+			interactive: true
+		});
+
+		const item: HTMLInputElement = getByLabelText(
+			"Dropdown"
+		) as HTMLInputElement;
+
+		await expect(item.value).toBe("apple_choice");
+
+		component.$set({
+			choices: [
+				["apple_new_choice", "apple_internal_value"],
+				["zebra_new_choice", "zebra_internal_value"]
+			]
+		});
+
+		await item.focus();
+		await item.blur();
+		await expect(item.value).toBe("apple_new_choice");
+	});
 });
diff --git a/js/dropdown/shared/Dropdown.svelte b/js/dropdown/shared/Dropdown.svelte
index 19b009b11e..0a5d7861ec 100644
--- a/js/dropdown/shared/Dropdown.svelte
+++ b/js/dropdown/shared/Dropdown.svelte
@@ -8,8 +8,9 @@
 
 	export let label: string;
 	export let info: string | undefined = undefined;
-	export let value: string | number | (string | number)[] | undefined = [];
-	let old_value: string | number | (string | number)[] | undefined = [];
+	export let value: string | number | (string | number)[] | undefined =
+		undefined;
+	let old_value: string | number | (string | number)[] | undefined = undefined;
 	export let value_is_output = false;
 	export let choices: [string, string | number][];
 	let old_choices: [string, string | number][];
@@ -92,9 +93,19 @@
 	}
 
 	$: {
-		if (choices !== old_choices || input_text !== old_input_text) {
-			filtered_indices = handle_filter(choices, input_text);
+		if (choices !== old_choices) {
+			set_input_text();
 			old_choices = choices;
+			filtered_indices = handle_filter(choices, input_text);
+			if (!allow_custom_value && filtered_indices.length > 0) {
+				active_index = filtered_indices[0];
+			}
+		}
+	}
+
+	$: {
+		if (input_text !== old_input_text) {
+			filtered_indices = handle_filter(choices, input_text);
 			old_input_text = input_text;
 			if (!allow_custom_value && filtered_indices.length > 0) {
 				active_index = filtered_indices[0];